Who Will Pay for Long-Term Care in the UK? Projections Linking Macro- and Micro-Simulation Models
The long-term care funding system continues to attract much debate in the UK. We produce projections of state and private long-term care expenditure and analyse the distributional impact of state-financed care, through innovative linking of macro- and micro-simulation models. Variant assumptions abo...
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| Published in | Fiscal studies Vol. 24; no. 4; pp. 387 - 426 |
|---|---|
| Main Authors | , , , |
| Format | Journal Article |
| Language | English |
| Published |
London, UK
The Institute for Fiscal Studies
01.12.2003
Institute for Fiscal Studies Blackwell Publishing Ltd |
| Subjects | |
| Online Access | Get full text |
| ISSN | 0143-5671 1475-5890 |
| DOI | 10.1111/j.1475-5890.2003.tb00089.x |
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| Abstract | The long-term care funding system continues to attract much debate in the UK. We produce projections of state and private long-term care expenditure and analyse the distributional impact of state-financed care, through innovative linking of macro- and micro-simulation models. Variant assumptions about life expectancy, dependency and care costs are examined and the impact of universal state-financed ('free') personal care, based on need but not ability to pay, is investigated. We find that future long-term care expenditure is subject to considerable uncertainty and is particularly sensitive to assumed future trends in real input costs. On a central set of assumptions, free personal care would, by 2051, increase public spending on long-term care from 1.1 per cent of GDP to 1.3 per cent, or more if it generated an increase in demand. Among the care-home population aged 85 or over, the immediate beneficiaries of free personal care would be those with relatively high incomes. |
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| AbstractList | The long‐term care funding system continues to attract much debate in the UK. We produce projections of state and private long‐term care expenditure and analyse the distributional impact of state‐financed care, through innovative linking of macro‐ and micro‐simulation models. Variant assumptions about life expectancy, dependency and care costs are examined and the impact of universal state‐financed (‘free’) personal care, based on need but not ability to pay, is investigated. We find that future long‐term care expenditure is subject to considerable uncertainty and is particularly sensitive to assumed future trends in real input costs. On a central set of assumptions, free personal care would, by 2051, increase public spending on long‐term care from 1.1 per cent of GDP to 1.3 per cent, or more if it generated an increase in demand. Among the care‐home population aged 85 or over, the immediate beneficiaries of free personal care would be those with relatively high incomes. The long-term care funding system continues to attract much debate in the UK. We produce projections of state and private long-term care expenditure and analyze the distributional impact of state-financed care, through innovative linking of macro- and micro-simulation models. Variant assumptions about life expectancy, dependency and care costs are examined and the impact of universal state-financed ('free') personal care, based on need but not ability to pay, is investigated. We find that future long-term-care expenditure is subject to considerable uncertainty and is particularly sensitive to assumed future trends in real input costs. On a central set of assumptions, free personal care would, by 2051, increase public spending on long-term care from 1.1% of GDP to 1.3%, or more if it generated an increase in demand. Among the care-home population aged 85 or over, the immediate beneficiaries of free personal care would be those with relatively high incomes. [PUBLICATION ABSTRACT] |
| Author | Comas-Herrera, Adelina Hancock, Ruth Wittenberg, Raphael Pickard, Linda |
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| Cites_doi | 10.1017/S0020268100020084 10.1017/S0144686X01007978 10.1017/S0047279400016615 10.1093/geronb/57.5.S285 10.1016/S0277-9536(98)00351-7 10.51952/WFIL8942 |
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| Notes | istex:6BEFE944008D345BE140B39B7A38A6A7AE2998BF ark:/67375/WNG-ZGGKR54J-N ArticleID:FISC387 This paper arises from research financed by the Institute for Public Policy Research and uses models developed with the financial support of the Department of Health (PSSRU model) and the Nuffield Foundation (NCCSU model). Material from the Family Resources Survey and the General Household Survey is crown copyright, made available by the Office for National Statistics via the UK Data Archive and used with permission. All responsibility for the analysis and views expressed in this paper rests with the authors. SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 14 ObjectType-Article-2 content type line 23 |
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| References_xml | – reference: McNamee, P., Gregson, B. A., Buck, D., Bamford, C. H., Bond, J. and Wright, K. (1999), 'Costs of formal care for frail older people in England: the resource implications study of the MRC cognitive function and ageing study (RIS MRC CFAS)', Social Science and Medicine, vol. 48, pp. 331-41. – reference: Department of Health (2000), Community Care Statistics 2000: Residential Personal Social Services for Adults, England, Statistical Bulletin 2000/28, London : Department of Health. – reference: Care Development Group (2001), Fair Care for Older People, Edinburgh : The Stationery Office. – reference: Wistow, G., Knapp, M., Hardy, B., Forder, J., Kendall, J. and Manning, R. (1996), Social Care Markets: Progress and Prospects, Buckingham : Open University Press. – reference: Royal Commission on Long Term Care (1999), With Respect to Old Age, Cm. 4192, London : The Stationery Office. – reference: Thompson, P. and Wright, F. (2000), All My Worldly Goods...A Study of the Operation of the 'Liable Relative Rules' when a Spouse Goes into Residential or Nursing Home Care, London : Age Concern England. – reference: Pickard, L., Wittenberg, R., Comas-Herrera, A., Davies, B. and Darton, R. (2000), 'Relying on informal care in the new century? Informal care for elderly people in England to 2031', Ageing and Society, vol. 20, pp. 745-72. – reference: Government Actuary's Department (2001), National Population Projections: 2000-Based, London : The Stationery Office; or see www.gad.gov.uk. – reference: Department for Work and Pensions (2001), Family Resources Survey for Great Britain 1999-2000, Leeds : Corporate Document Services. – reference: National Assembly for Wales (2001), Social Services Statistics Wales 2000, Cardiff : NAW. – reference: Wittenberg, R., Pickard, L., Comas-Herrera, A., Davies, B. and Darton, R. 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(2002), Calculating Operating Costs for Care Homes, Findings no. 612, York : Joseph Rowntree Foundation. – reference: Tinker, A., Wright, F., McCreadie, C., Askham, J., Hancock, R. and Holmans, A. (1999), Alternative Models of Care for Older People, Supporting Evidence to the Royal Commission on Long Term Care for the Elderly, Research Volume 2, London : The Stationery Office. – reference: Wittenberg, R., Pickard, L., Comas-Herrera, A., Davies, B. and Darton, R. (2001), 'Demand for long-term care for older people in England to 2031', Health Statistics Quarterly, vol. 12, pp. 5-17. – reference: Davies, B., Bebbington, A. and Charnley, H. (2002), The Pensioners' Income Series 2000/1, London : DWP Information and Analysis Directorate. – reference: Forrest, R., Leather, P. and Pantazis, C. (1996), Home Ownership in Old Age: The Future of Owner Occupation in an Ageing Society, London : Anchor Housing Trust. – reference: Netten, A., Darton, R. and Curtis, L. 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(1994), 'Financing long-term care in Great Britain', Journal of the Institute of Actuaries, vol. 121, part 1, pp. 1-68. – reference: Secretary of State for Health (2000), The NHS Plan: The Government's Response to the Royal Commission on Long Term Care, Cm. 4818-II, London : The Stationery Office. – volume: 48 start-page: 331 year: 1999 end-page: 41 article-title: Costs of formal care for frail older people in England: the resource implications study of the MRC cognitive function and ageing study (RIS MRC CFAS) publication-title: Social Science and Medicine – start-page: 24 year: 1994 end-page: 32 – start-page: 37 year: 2001 end-page: 46 – volume: 121 start-page: 1 year: 1994 end-page: 68 article-title: Financing long‐term care in Great Britain publication-title: Journal of the Institute of Actuaries – start-page: 4 year: 2000 end-page: 12 – year: 2002 – year: 2001 – start-page: 7 year: 1999 end-page: 17 – year: 2000 – year: 1996 – volume: vol. 57B start-page: S285 year: 2002 end-page: 93 article-title: The effect of older people's economic resources on care home entry under the United Kingdom's long‐term care financing system publication-title: Journal of Gerontology: Social Sciences – volume: 20 start-page: 745 year: 2000 end-page: 72 article-title: Relying on informal care in the new century? Informal care for elderly people in England to 2031 publication-title: Ageing and Society – volume: 12 start-page: 5 year: 2001 end-page: 17 article-title: Demand for long‐term care for older people in England to 2031 publication-title: Health Statistics Quarterly – year: 1990 – volume: 17 start-page: 153 year: 1988 end-page: 75 article-title: Gender, household composition and receipt of domiciliary services by elderly disabled people publication-title: Journal of Social Policy – year: 1994 – start-page: 23 year: 1999 end-page: 32 – year: 1998 – year: 1999 – ident: e_1_2_1_23_1 doi: 10.1017/S0020268100020084 – ident: e_1_2_1_32_1 – volume-title: Home Ownership in Old Age: The Future of Owner Occupation in an Ageing Society year: 1996 ident: e_1_2_1_11_1 – volume-title: Scottish Community Care Statistics 2000 year: 2000 ident: e_1_2_1_27_1 – volume-title: Family Resources Survey for Great Britain 1999–2000 year: 2001 ident: e_1_2_1_8_1 – volume-title: Resources, Needs and Outcomes in Community‐Based Care: A Comparative Study of the Production of Welfare for Elderly People in Ten Local Authorities in England and Wales year: 1990 ident: e_1_2_1_7_1 – volume-title: All My Worldly Goods…A Study of the Operation of the ‘Liable Relative Rules’ when a Spouse Goes into Residential or Nursing Home Care year: 2000 ident: e_1_2_1_34_1 – volume-title: Alternative Models of Care for Older People year: 1999 ident: e_1_2_1_35_1 – volume-title: Fair Care for Older People year: 2001 ident: e_1_2_1_6_1 – volume-title: Care of Elderly People Market Survey 2001 year: 2001 ident: e_1_2_1_17_1 – volume-title: ‘Poverty, disability and the use of long‐term care services’, in Royal Commission on Long Term Care of the Elderly year: 1999 ident: e_1_2_1_2_1 – volume-title: People Aged 65 and Over: Results of an Independent Study Carried Out on Behalf of the Department of Health as Part of the 1998 General Household Survey year: 2000 ident: e_1_2_1_4_1 – volume-title: The NHS Plan: The Government's Response to the Royal Commission on Long Term Care year: 2000 ident: e_1_2_1_28_1 – ident: e_1_2_1_29_1 – volume-title: survey of care homes for elderly people year: 1998 ident: e_1_2_1_20_1 – volume: 12 start-page: 5 year: 2001 ident: e_1_2_1_41_1 article-title: Demand for long‐term care for older people in England to 2031 publication-title: Health Statistics Quarterly – ident: e_1_2_1_31_1 – volume-title: With Respect to Old Age year: 1999 ident: e_1_2_1_26_1 – ident: e_1_2_1_24_1 doi: 10.1017/S0144686X01007978 – volume-title: Quality in Later Life: Rights, Rhetoric and Reality year: 2001 ident: e_1_2_1_25_1 – ident: e_1_2_1_3_1 doi: 10.1017/S0047279400016615 – ident: e_1_2_1_14_1 doi: 10.1093/geronb/57.5.S285 – ident: e_1_2_1_18_1 doi: 10.1016/S0277-9536(98)00351-7 – volume-title: Self‐Funded Admissions to Care Homes: A Report of Research Carried Out by the Personal Social Services Research Unit, University of Kent on Behalf of the Department for Work and Pensions year: 2002 ident: e_1_2_1_21_1 – volume-title: Unit Costs of Health & Social Care 2001 year: 2001 ident: e_1_2_1_22_1 – volume-title: Social Services Statistics Wales 2000 year: 2001 ident: e_1_2_1_19_1 – volume-title: Calculating Operating Costs for Care Homes year: 2002 ident: e_1_2_1_16_1 – volume-title: A New Contract for Retirement year: 2002 ident: e_1_2_1_5_1 doi: 10.51952/WFIL8942 – volume-title: The Pensioners' Income Series 2000/1 year: 2002 ident: e_1_2_1_9_1 – volume-title: Securing Our Future Health: Taking a Long‐Term View year: 2002 ident: e_1_2_1_36_1 – volume-title: Demand for Long‐Term Care: Projections of Long‐Term Care Finance for Elderly People year: 1998 ident: e_1_2_1_40_1 – ident: e_1_2_1_30_1 – ident: e_1_2_1_33_1 – ident: e_1_2_1_13_1 – volume-title: Sharing the Burden: Strategies for Public and Private Long‐Term Care Insurance year: 1994 ident: e_1_2_1_37_1 – volume-title: Social Care Markets: Progress and Prospects year: 1996 ident: e_1_2_1_38_1 – volume-title: A New Contract for Retirement: Modelling Policy Options to 2050 year: 2002 ident: e_1_2_1_39_1 – volume-title: Community Care Statistics 2000: Residential Personal Social Services for Adults, England year: 2000 ident: e_1_2_1_10_1 – volume-title: National Population Projections: 2000‐Based year: 2001 ident: e_1_2_1_12_1 – volume-title: Long‐Term Care Finance: Memorandum of Evidence year: 1996 ident: e_1_2_1_15_1 |
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| Snippet | The long-term care funding system continues to attract much debate in the UK. We produce projections of state and private long-term care expenditure and... The long‐term care funding system continues to attract much debate in the UK. We produce projections of state and private long‐term care expenditure and... |
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| SubjectTerms | Ability to pay Age groups Beneficiaries Costs Dependency Economic models elderly Expenditures Fees Finance Fiscal policy Funding Government spending H51 H53 Health care Health care expenditures Health care policy Health economics Health policy Health services Homes Hospitalization Housing I38 Institutional care J14 J18 Life expectancy Long term Long term care insurance Long term health care Long-term care Macroeconomics Modeling Nursing care Nursing homes Older adults Older people Personal grooming Projections Simulation state provision Studies Taxation Trends Uncertainty Unit costs United Kingdom |
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| Title | Who Will Pay for Long-Term Care in the UK? Projections Linking Macro- and Micro-Simulation Models |
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