Themed Section on the Costs of Long-Term Care for Older People
Winners and Losers: Assessing the Distributional Effects of Long-Term Care Funding Regimes
Ruth Hancock a1, Ariadna Juarez-Garcia a2, Adelina Comas-Herrera a3, Derek King a3, Juliette Malley a3, Linda Pickard a3andRaphael Wittenberg a3 a1 Department of Health and Human Sciences, University of Essex E-mail firstname.lastname@example.org a2 Health Services Management Centre, University of Birmingham a3 Personal Social Services Research Unit, LSE Health and Social Care, London School of Economics
Using two linked simulation models, we examine the public expenditure costs and distributional effects of potential reforms to long-term care funding in the UK. Changes to the means tests for user contributions to care costs are compared with options for the abolition of these means tests (‘free’ personal care). The latter generally cost more than the former and benefit higher income groups more than those on lower incomes (measuring income in relation to the age-specific income distribution). Reforms to the means tests target benefits towards those on lower incomes. However, the highest income group are net losers if free personal care is financed by a higher tax rate on higher incomes and the effect on the whole population considered.