2017 Tune Review of the Living Longer, Living Better Aged Care reform agenda

As the government moves (slowly) towards a consumer-driven model of aged care and away from a regulated system there needs to be a better understanding of the demand for aged care services so that government can estimate what services will be demanded, what the costs involved will be and how those costs will be met. There is little doubt that a larger proportion of the costs will fall on the consumer in future but how this will be achieved is still unclear.

Currently 90,000 home care packages are available but this will increase to 140,000 within the next 5 years, and more high-level packages will be demanded. At present there are 4 levels of package and the review suggests the introduction of a level 5 package to support those with high-level needs to stay at home. The demand for respite care also exceed the supply and is expected to increase.

The review indicates that using the age of 70+ as a basis for planning aged care needs is obsolete as the average age of people using aged care services is in the 80 years and over bracket, and the baby boomers will put pressure on the system as it is currently configured. The review suggests changing the base to 75+.

With government now funding 75% of aged care, there is pressure to transfer more of this cost to consumers.
The review makes 38 recommendations. The key ones are:
5 – increase the proportion of high home care packages
7 – introduce a level 5 home care package to allow people with high level needs to stay in their homes longer.
9 – changes the aged care provision ratio to 75 years.
13 – the full value of residential homes be included for residential care (currently capped at $162,815)
15- annual and lifetime caps be abolished for income tested fees for home care and residential aged care (currently $26,566 annual and $63,760 lifetime cap in residential aged care).
16 – introduce mandatory standardised contributions to the CHSP program.
17 – provide consumers information about the value of the government subsidy they receive.
18 – improve transparency of fees by getting providers to report them on the My Aged Care web site.
19 – increase the amount of the maximum accommodation payments to $750,000 before government approval needs to be sought.
37 – that more training be provided for aged care workers including an aged care nursing specialisation.

The government has said it will consider the recommendations but has ruled out adopting recommendations 13 (including the full value of the home in assets assessed) and 15 (abolishing annual and lifetime caps). This puts the ball firmly in the government’s court as to how it will fund the increased demand for aged care services without adversely affecting both the quality and quantity of aged care services.

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