Q & A: Fair Deal Nursing Home Scheme
What is the Fair Deal?It replaced nursing home subventions in October 2009 and it is supposed to help pay for the care required by people entering public and private nursing homes.
A key element of the scheme allowed applicants to defer the cost of their care until after their death by putting a lien (a form of security) on the value of their home at a rate of 5 per cent a year for a maximum of three years.
Why is it in the news?
Its budget is capped each year and this year’s funding has already run out, less than five months into the year. At the end of last month, more than 22,000 older people were receiving financial support under the scheme – up more than 2,000 on the number when the scheme was first launched.
There is no allowance under the regulations for any increase in funding once the allocated sum is gone, and the HSE has said no new applications will be granted this year unless the regulations change.
How could the funding have run out so quickly?
It is hard to say. It is most likely due to a combination of a greater than anticipated demand for the service, the fact that older people funded under the scheme are on average living longer than anticipated and increases in the cost of care.
The HSE says the cost of private nursing homes has increased by about 4 per cent this year. Another likely factor is the property collapse – the scheme was linked to the value of property but just as house prices have fallen by about 50 per cent, so too have the liens and the potential revenue for the State.
Last night the HSE said it was “difficult to quantify” the effect of the collapsing property market but “lower incomes and lower property values would have reduced the amount payable by the applicant towards the cost of their care”.
Is the agreed funding for people already in the scheme under threat?
Absolutely not. Minister for Health James Reilly said yesterday he wanted to assure people already in long-term care that they were “safe and secure” and would continue to have their care funded in full.
What about people whose applications are currently being processed?
People who were due to go into nursing homes as soon as this week have been told that unless they can cover the costs themselves, they will not get a place.
While Dr Reilly has told the HSE to continue to accept applications and department officials have been instructed to prepare proposals on how future applications will be processed, the HSE has warned that money will be granted only if and when it becomes available.
What will be the consequences of the funding shortfall?
Until the funding issues can be resolved, it will reduce access to residential care for older people.
This could have a knock-on effect which will significantly increase the number of acute hospital beds taken up by older people who would be better suited to residential care.
The logjam in hospital admissions will result in longer trolley waits in emergency departments and put more pressure on the health service.
What happens next?
Things remain very much up in the air. The HSE says it is working with the Department of Health to explore options to meet the increased demand within the resources available. The 5 per cent lien could be increased to raise revenue, which would be one way of getting over the problems caused by the collapse in property prices.
Colm McCarthy, in his Bord Snip Nua report, recommended as much and said the lien should go up to 7.5 per cent. Given the collapse in the property market, however, such an increase would not be sufficient to make up the shortfall.
Another issue Dr Reilly wants addressed is nursing home costs. The cost of a bed in a private nursing home a week is €875, the cost in the public system is €1,245. It is a gap Dr Reilly believes should be narrowed.