The alternatives when paying for healthcare – and much else – are doing so individually or collectively (i.e: pooling risk in some way).
The main objection to a system based on individual payments is that it is unjust: why should I have to shell out a lot of money on healthcare because of the sheer bad luck of falling ill, the argument runs, while my healthier and thus more fortunate neighbour gets away without paying a penny?
The main objection to a system based on risk-pooling, if based on compulsion, is also that it is unjust: why should I, who have worked hard and saved, have to fork out a lot of money for the feckless and improvident who can’t be bothered to do either?
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These starting-points are worth bearing in mind when it comes to considering Theresa May’s Conservative manifesto proposal for social care.
Any plan for reform, based either on individual or compulsory collective payments, was bound to have been met by a furious thumbs-down from potential losers.
But the Downing Street manifesto team would not have viewed the task set them in an electoral or, so to speak, philosophical context alone. They will also have done what any detective is usually wise to do: i.e – followed the money.
In other words, they will have considered the potential cost to the Treasury of a new compulsory collective scheme – i.e: funding social care out of taxation, as the NHS is funded, or through a social insurance scheme.
(Downing Street will surely also have probed collective schemes that are not based on compulsion, such as private insurance, but presumably concluded that these are incapable of solving the problem that they want to address.)
And the pitch of the manifesto team to May will surely have been roughly as follows.
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“Well, Prime Minister, we’ve had a look at this. Obviously, any compulsory risk-pooling scheme has to cover the have-nots – it would be politically impossible for it not to so do.
“So any such plan would basically mean extending the NHS to social care. And the lesson of the NHS is that costs always run ahead of what the taxpayer is prepared to stump up – so the Treasury has to fill the gap.
“Obviously, that, in turn, means higher taxes in the long-term. And the tax burden is already approaching its highest for 30 years.
“The Chancellor won’t be inclined to borrow the money instead; after all, we’ve just pushed the date for clearing the deficit back yet again.
“All in all, then, a scheme based on individual payments will make a lot of voters very angry. But we’ve got one here that will save the Treasury more than £1.3 billion a year, protect poorer people, be neutral between care in the home and outside it, and allow anyone to keep £100,000 worth of savings.
“In conclusion, if you want the biggest majority possible, Prime Minister, then drop the whole business.
“But if you want to trade off a lower majority against a mandate for reform, then this is the scheme we suggest.”
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Five concluding points: