How does the interaction of formal and informal care shape reform of long-term care funding?
Any reform of long-term care funding inevitably also affects the balance of formal and informal care across society. However, the link between informal care and policy debate on reform of funding long-term care runs much deeper than this.
Households have shown consistent disinterest in insuring against the risk of needing paid care, whether via taxation (such as a levy on estates), social insurance schemes or private insurance.
A key reason may be that because many individuals would prefer to receive informal care rather than paid ‘formal’ care. In fact, individuals are far more likely to receive informal care, but this may impose considerable financial and personal costs on a family carer, such that households opt to conserve savings in order to ‘insure’ at the ‘household-level’ against the potential costs that come with informal care.
This suggests that getting the ‘offer’ to informal carers right is essential if a new settlement on long-term care funding is to achieve wide support and participation, and to persuade households to insure at the ‘population-level’.
This discussion paper explores these dilemmas with reference to current informal care policy, the long-term care funding system and the effective ‘offer’ to carers that results, particularly around the unpredictability and variability of support to carers. It examines how, building on the current system, a new offer for carers could be developed that is communicable, guaranteed and personalised.
Given the continued difficulty in engaging the public in thinking about the potential risk (and costs) of needing care, the report argues that attaching an improved offer for carers to a new settlement on care funding – effectively inviting households to insure against the burdens that can be associated with high levels of informal care provision – may be the key to unlocking public support for reform.
Author: James Lloyd, Strategic Society Centre
Download the report: Toward a New Co-Production of Care