Role of Private Finance in Paying for Long Term Care

An ageing population and increased longevity means that long term care will become progressively more expensive. In 2009 the Government published a Green Paper on future funding options and a White Paper in 2010. This article considers the role of private finance products under the ‘Partnership'...

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Bibliographic Details
Published in:	The Economic journal (London) Vol. 120; no. 548; pp. F478 - F504
Main Authors:	Mayhew, Les, Karlsson, Martin, Rickayzen, Ben
Format:	Journal Article
Language:	English
Published:	Oxford, UK Blackwell Publishing Ltd 01-11-2010 Blackwell Publishing Oxford University Press
Subjects:	Access to health care Activities of daily living Age Annuities Asset income Care of the aged Disabilities Entitlement programs Financing methods Funding Health care Health care expenditures Health economics Health expenditure Health inequality Health policy Housing Income Long term health care Long-term care Older adults Personal finance Population ageing Private sector Savings Studies United Kingdom Wealth United States > US
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Summary:	An ageing population and increased longevity means that long term care will become progressively more expensive. In 2009 the Government published a Green Paper on future funding options and a White Paper in 2010. This article considers the role of private finance products under the ‘Partnership' option. It finds that few households are able to pay for LTC based on income and savings but the number increases if housing assets are included. We show that products can be devised for a range of circumstances, although state support would need to continue. We propose a simplified means testing system based on a combination of income and assets.
Bibliography:	http://dx.doi.org/10.1111/j.1468-0297.2010.02388.x ark:/67375/WNG-CJ9SGD7W-M istex:175265876FE92FAD5A667C8C485408B826E34ACA ArticleID:ECOJ2388 Corresponding author: Les Mayhew, Faculty of Actuarial Science and Insurance, Cass Business School, 106 Bunhill Row, London, EC1 8TZ, UK. Email: lesmayhew@googlemail.com Re‐use of this article is permitted in accordance with the Terms and Conditions set out at We gratefully acknowledge the helpful comments of the two anonymous referees. This article is based, in part, on work undertaken at the formative stages of the 2009 Green Paper on behalf of Department of Health in 2008, and on subsequent research commissioned by the City of London and discussed at an event chaired by the Lord Mayor held at Mansion House in September 2009. http://wileyonlinelibrary.com/onlineopen#OnlineOpen_Terms . ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23
ISSN:	0013-0133 1468-0297
DOI:	10.1111/j.1468-0297.2010.02388.x