The aged care royal commissioners were notably split on a number of key issues, but on one principle they were united. Older Australians should not be required to contribute to their cost of care, nor should care be means tested.
Instead, commissioner Tony Pagone wrote, every Australian should “contribute towards the financing of the aged care system through their working life” through a Medicare-style levy, therefore guaranteeing each of us the right to aged care when we eventually need it. The commissioners diverged on the nature of the levy, but agreed on the principle that a visible levy would, as commissioner Lynelle Briggs argued, “help taxpayers hold the government to account as it implements reforms”.
The royal commission’s aged care levy recommendation has now been rejected out of hand by the government’s Aged Care Taskforce Final Report – delayed for three months before its release on Tuesday – which has recommended that rather than a politically unpalatable levy of approximately 1% of taxable income, aged care ought to be means tested, enhancing the user pays aspect of our present system and placing greater impetus on older Australians with means to contribute more to their daily living costs. The cost of medical care, the taskforce recommends, should still fall to the government.
The taskforce has also recommended that upfront lump sum payments in the form of refundable accommodation deposits (RADs) ultimately be phased out over time and a rental model be adopted in which aged care residents would need to make increased, nonrefundable co-contributions to their daily living costs. It is not yet clear from the taskforce’s report what provisions will be put in place so that unreasonable increases in such rental payments – rife elsewhere in the general community – will not be levelled against aged care residents once they are in place in their new homes, nor what the overall financial implications of doing away with RADs will be for providers.
Undoubtedly, Australia’s ailing aged care sector needs a massive injection of funding – subject to greater financial reporting obligations and transparency measures – to lift the quality of care, increase staffing and address widespread issues of neglect and abuse for current residents. Newly legislated minimum staffing requirements are presently not being met in many instances due to both a lack of funding and a lack of qualified staff.
These issues will only be exacerbated in coming decades, when Australia’s rapidly ageing population will place significant strain on our system. Over the next 40 years, the number of older Australians over the age of 80 will more than triple and the number of centenarians is set to increase sixfold.
The taskforce, comprising industry insiders including aged care providers as well as healthcare and economics experts, emphasises that it has been focused on seeking “sustainable” solutions to aged care funding arrangements. However, given that the taskforce’s report includes no costings, nor a response from the government, it’s impossible to ascertain how viable or sustainable its alternate model of funding is.
In arguing for its changes, the taskforce prosecutes an equity argument, holding that a levy would not be fair on a shrinking taxpayer base in coming decades, and ultimately placing an undue burden on younger Australians to pay for the cost of care. This is a valid concern, especially given the generational shifts that will lead to vastly increased numbers of people accessing aged care in coming decades and the existing financial pressures younger Australians are enduring at present.
Yet the taskforce’s proposed model places the onus to pay for aged care solely on the proportion of Australians who end up using the system, rather than on all Australians. A user-pays system is likely to generate less funding overall than a universal levy, and drastically reduces the number of possible contributors to an exorbitantly expensive system.
Individualists will argue that this is reasonable (why pay for a system you may not even end up using?) but the social contract underpinning other aspects of Australia’s health system holds that we are all collectively responsible for investing in quality care, and to care for each other in our vulnerability. The taskforce has failed to mount a convincing argument why the same principles that underpin Medicare – a modest contribution across a lifetime in exchange for a guarantee of care, should we need it – should not extend to aged care.
After a bruising royal commission which revealed the horrifying depth of neglect of older Australians at the time of their greatest vulnerability, one thing is clear: we all need to invest more effort, energy and attention into advocating for our elders in aged care. The universal levy proposed by the royal commission is a clear way of ensuring all Australians are equally invested in our aged care system – and equally ready to hold the government to account.