A noose around the neck: why ‘user pays’ can no longer afford to be kicked down the road

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A user pays system remains the only sensible solution for funding the future aged care system, as the Baby Boomers blow out the costs of services.

StewartBrown’s latest Aged Care Financial Performance Survey forecasts that over half of residential aged care operators will still be making losses in FY2021-22 and FY2022-23 as COVID-19 subsidies wear off.

The AN-ACC funding model will be introduced in 12 months’ time.

But there is still uncertainty amongst providers about whether it will deliver sufficient funding as expenses continue to rise.

The sector also needs more staff – and those staff need salaries that are comparable with health services.

This leaves three options for a way forward: greater Government funding from Consolidated Revenue, an aged care specific levy, or more user pays or a combination of user pays and increased taxpayer funding.

“The Government is not going to keep throwing billions of dollars at the sector,” said Provectus Care CEO Dr Shane Moran.

“We can’t have free aged care. People have to be prepared to pay for it, unless they want a very basic, simple facility.”

Catholic Health Australia CEO Pat Garcia says such a system could be developed based on people’s capacity to pay.

“Contributions should be linked to capacity to pay. In return for increased contributions, aged care consumers should have choice and control over timely access to quality aged care services and who provides the services,” he said.

“In determining capacity to pay, all forms of wealth and income should be taken into account, and there should be appropriate safety nets for people with lesser means.”

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