Price shock concerns for older residents with Australian aged care changes days away: 'Silver tsunami'
Older Australians are being warned they could soon be paying more for their aged care support after this weekend. On November 1, the at-home system, dubbed Support at Home will be updated and it will likely see providers charge more per hour for their services.
That's because the government is putting a cap on the amount that providers can charge in admin fees. At the moment, that fee can be up to 35 per cent, but from Saturday, the maximum will be 10 per cent.
Trilogy Care CEO Luke Traini told Yahoo Finance that some providers might try to recoup those costs through more expensive services.
"Some of the accounting firms that specialise in this sector have been suggesting the hourly rates for services are likely to go up by 30-40 per cent," he said.
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He said a service that might be billed at $100 per hour could be jacked up to $130 per hour seemingly overnight even though there's been no real change in the actual care-giving.
While some providers will just be trying to balance their finances, others might "try and take advantage of the change that's caused by the legislation" and increase their prices anyway, Traini worried.
"When you have a fixed bucket of money, the higher you pay per hour, the fewer number of hours that you can afford," he said.
"We don't want to see older Australians having to choose between having a shower each day and putting a meal on the table, or choosing between physiotherapy and having their home cleaned because the number of hours of care has been reduced by higher prices."
Traini said the changes are necessary to help providers remain "sustainable" and grapple with the huge expected increase in people needing care in the coming years, a concept he dubbed the "silver tsunami".
He dubbed the November 1 overhaul as a "once-in-a-generation" update that will go a long way in keeping up with demand.
How will the November 1 changes to aged care affect me?
This will all depend on when a person started at-home aged care support (or when they intend to) and the type of services they might need.
The government first announced these changes back on September 12 last year.
Anyone who was already receiving or had organised at-home care before that date won't be affected by the changes kicking in on Saturday and will have their current funding arrangements grandfathered.
Anyone who entered care or hadn't organised a plan after that date will be affected.
While they won't have to pay for any clinical care, like nursing or physiotherapy, they will have to fork out for independence and everyday costs. Independence services can be for aspects like showering and other personal care, while everyday costs are related to gardening, cleaning and other needs.
People signing up to Support at Home will have to go through a Services Australia means test to determine how much they will have to pay from their own pocket, with the maximum co-payment being 80 per cent.
While those with grandfathered arrangements won't have to endure co-payments, they won't be immune from the hike in hourly service costs.
How can I reduce price hikes from aged care changes on November 1?
This will also depend on whether a person is receiving care from a full-service provider or a self-managed system.
The former sees providers offer every type of service an older Aussie might need, whereas the self-managed system sees people pick and choose services from different providers.
Traini told Yahoo Finance the latter setup allows people to keep their costs low because they can shop around.
"By exerting choice and control, you can negotiate your own price," he said. "Make yourself very informed and comfortable about the services that you need and the price that you want to pay."
He explained that some providers can charge more than double per hour than others, so people should do their homework to find out if the service is worth the extra money.
The Trilogy Care CEO added that it's not too late if a person has signed up to a certain service.
"There are no exit costs, there are no barriers that providers can put up. It is a very much a free system where the older Australian person can choose to move," he said.
"The sign up process is administratively pretty straightforward. You provide your My Aged Care code, and the operator can then take it from there and onboard you as a client and do the clinical reviews and then get all your services organised for you."
He urged people to pay close attention to hourly service costs over the coming days and weeks to see if they've changed due to the November 1 update.
