If you're facing the prospect of navigating aged care services, there are quite a few things you need to consider. If you (or your loved one) aren't on the path to residential care, one of the potential options available to you will be a Home Care Package. These packages provide assistance for people to be able to stay at home, and like residential care, they're government funded. Packages are offered across four different care levels – ranging from level one (basic care needs) to four (high care needs).
Since July last year, all Home Care Packages must now be delivered on what's known as a Consumer-Directed Care (CDC) basis. The idea behind CDC is that government funded providers of Home Care Packages now need to give consumers more choice and flexibility in how they use their package and offer a transparent account of where the money in the package is being spent.
While this may not sound like a radical idea, it's a monumental shift from the way Home Care Packages have traditionally been delivered. Typically, home care providers would compete for government funding and then offer consumers bundled packages with little flexibility. Consumers would be in the dark as to how much the care they received was actually costing the provider, and may not have been given a choice about what services were on offer, when they were offered or which care worker delivered them.
The CDC concept turns this longstanding model on its head and gives consumers the ability to not only shop around for a provider that gives them the best value for money, but also one that allows them to have control over what services are provided, when they're provided and who provides them. If you want assistance to be able to go to bed at 10pm rather than 8pm, for example, then the provider should help you manage your package in order to accommodate that.
Ian Yates, CEO of the Council on the Ageing Australia (COTA), says we now have an opportunity in Australia to design a world-class system that's in the interest of consumers. While the future is looking up, the reality is the shift will take time. While there are some providers that have managed to implement CDC effectively, Yates says there are too many examples where providers don't understand what CDC is or are resistant.
Under CDC, providers now need to let consumers know how the funds available through their package are spent through an individualised budget and monthly statement. This increased transparency over the costs associated with providing care has left many consumers asking questions about the high admin and case management fees being charged by some providers.
Providers are allowed to charge administrative fees in order to cover the costs of overheads and operational costs, such as insurance, workers compensation, care co-ordination and travel costs, a federal health department spokesperson told CHOICE. However, these fees aren't regulated and can differ from provider to provider.
"Some providers are charging much higher admin fees than anyone would think is reasonable," says Yates. That means less money goes to actually providing care.
It's common for case management and admin fees to be around 40% of the package, an amount that even the former federal Assistant Minister for Social Services Mitch Fifield deemed to be "peculiar and not acceptable".
We even came across situations where the fees could suck up as much as 66% of the total package. And in one case we looked at, a home care recipient on a low-care level two package was charged $386.66 over a month for case management and admin fees when they only received 1.5 hours care costing $69.
Ideally this problem could be ironed out through some healthy competition between providers. But Paul Versteege, senior adviser research and advocacy at Combined Pensioners and Superannuants Association (CPSA), says there simply aren't enough packages to go around. "[CDC] is supposed to deliver choice but there isn't much. Once you're with a provider you're pretty much stuck with them," he says.
To find out whether or not you're eligible for a Home Care Package, and subsequently what level of care you qualify for, you'll need to go through the Aged Care Assessment Team (ACAT or ACAS in Victoria) which can be accessed on the myagedcare.gov.au portal.
Shortage of places
Currently providers of Home Care Packages are allocated a set amount of funding through an approvals process. To access services, consumers need to find a provider with packages available at the right care level. And that may not be easy. While there may be a number of providers in your area, it could be that only one or two of them have a place available. In fact, in June last year, CPSA found that providers' waitlists were as long as 24 months.
The good news is all this is set to change in February next year when package funding will start being assigned to the consumer rather than the provider. So instead of having to find an available place, consumers will be able to choose which provider they want to administer their package, ideally promoting more competition and resulting in better service and value for money.
The amount of money available to you will depend on your package level and whether or not you are eligible for any supplements. However, the basic package is made up of a daily government subsidy.
|Care eligibility||Weekly government subsidy*^||Total yearly subsidy*^|
|Home Care Level 1 (basic care needs)||$152.38||$7,924.15|
|Home Care Level 2 (low level care needs)||$277.26||$14,417.50|
|Home Care Level 3 (intermediate care needs)||$609.55||$31,696.60|
|Home Care Level 4 (high care needs)||$926.61||$48,183.65|
*Until 30 June 2016
^This may be higher if you are eligible for supplementary payments.
In order to receive the government funding, you'll have to make a co-contribution. Everyone receiving a package (no matter which package level you have) will be required to pay the basic fee, which is 17.5% of the single person aged pension rate, or $69.51 per week. If you earn over a certain amount, you may be required to contribute additional amounts. Beyond the basic fee payments you can't be asked to pay more than 50% of any income above the basic age pension rate. There are also annual caps and a lifetime cap of $61,754.55 in your lifetime (these caps will be indexed and increase over time). You can find out exactly how much you may need to contribute by using the Home Care Fee Estimator on the My Aged Care website.
Even after February 2017, your package will still need to be administered through an approved provider. While the old system typically saw providers offering all-in-one services (case management and service provision), under the new system you should have more negotiation power to include subcontracted services or be able to choose an alternate provider. It's likely that over time services will begin to be unbundled, which will provide consumers with more choice and that by July 2018 consumers will have some form of payment mechanism that will mean they can directly pay for services. This unbundling is already starting to happen. For example, Care Connect is an approved provider that receives the government funding but brokers out services rather than having its own workforce. Such a provider may then use a third-party service such as Better Caring, an innovative online platform that links up those seeking care directly with support workers.
While CDC is designed to offer you more care choices, it doesn't mean the funding can be spent on anything. Your spending will fall under four potential categories: administration; case management and advisory services; service and support provision and contingency (savings set aside for future use).
Determining how much each of these services should cost is tricky as there's no benchmark – it's really just whether or not you're happy with what you're getting. This means you'll need to shop around to find the provider that will offer you the best deal.
It's a good idea is to ask providers for their fee schedules before signing up so you can compare what different providers are offering. Yates' advice is to checkout a range of providers and if you're not happy with what you're getting, bargain.
Administration and case management
Case management fees are charged to cover the costs of developing an individualised care plan. While providers are entitled to charge case management fees, you can ask to take more control of managing the package and receive a reduction in these charges. If you're not happy with their response, you have the option to take your business elsewhere (although this may not be easy until February next year).
And as you now have more choice over who provides the care (provided certain requirements are met under the Aged Care Act 1997), it's worth comparing the hourly rate for services on the private market. Unfortunately, using a third-party service provider may not be as easy as it should be just yet. We spoke with one consumer who was trying to use a cheaper third party, but the provider is resistant.
Beyond admin and case management fees, some providers have also been "loading the hourly rate" they charge for care services, says Yates. Ultimately this affects the amount of care you're eligible to receive. We took a look at the fees of a number of providers, which tended to be fairly similar, and found the hourly rate charged by providers was usually around 1.5 to 2 times more than the casual hourly award wage for a home-care employee.
Stock images: Getty, unless otherwise stated.