General Fair deal rate vs private rate

Discussion in 'Health Insurance and healthcare costs' started by hydrocarbon, Jun 10, 2018.

  1. hydrocarbon

    hydrocarbon New Member

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    Many nursing homes have both a "fair deal rate" and a "private rate", which can be up to €200/week higher.

    The fair deal scheme allows for someone to apply for the loan ('ancillary state support') even if not eligible for any subsidy ('state support').

    This would seem to imply that there is an incentive to apply for the loan just in order to avail of the fair deal rate instead of the private rate, saving up to €10,000 a year (if not eligible for any subsidy).

    Does anyone have any experience or views on this?
     
  2. twofor1

    twofor1 Frequent Poster

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    Last edited: Jun 11, 2018
    One is either in the Nursing Home under Fair Deal or privately, though you can change from one to the other.

    If you are in under Fair Deal, what you get is the Fair Deal package and the nursing home gets paid the Fair Deal rate that has been agreed for that home. This covers nursing and personal care, basic aids and appliances, bed, board, laundry. Anything else (In private nursing homes anyway) is extra and is not covered by Fair Deal.

    Usually for Fair Deal residents the nursing home also applies a compulsory activity charge which varies from home to home but is typically €50 – €100 weekly, which is not covered by Fair Deal.

    Private rates are higher but usually include the activity charge. As you say some nursing homes (Not All) are up to €200 weekly more than the Fair Deal rate (I know of one which is up to €400 weekly more) For the additional payment you get extras or premium packages as they are sometimes referred to and can include some or all of; a larger room, Wi-Fi and Satellite Tv with all channels in your room, scenic view from room, hairdressing, newspapers, toiletries etc.

    Fair Deal residents whether they apply for the loan or not do not get the benefit of these private resident extras. They can of course get these extras, but Fair Deal won’t pay for them.
     
    Last edited: Jun 11, 2018
  3. hydrocarbon

    hydrocarbon New Member

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    9
    Thanks for that - the whole "additional charges" issue is a topic by itself, and there seems quite a range between different nursing homes on this.

    Let me give a specific example of using the loan to get the 'fair deal' rate:

    - Fair Deal rate: €1200/wk
    - Private rate: €1400/wk
    - Assessed weekly means: €1300/wk = 850 (house) + 300 (pension) + 150 (cash assets)

    Now as the assessed weekly means is greater than the fair deal rate the subsidy is €0 and so the person pays the private rate of €1400/wk. As the cash assets are run down the assessed weekly means will reduce and the person will likely qualify for the fair deal rate over time.

    However if that person at the start applied for the loan to cover the assessed contribution due to the house (€850/wk) then that person would be eligible for the fair deal rate and so the person would initially pay a total of €1200/wk consisting of €350/wk paid from own funds + €850/wk paid by the HSE. Assuming inflation stays low, then this is likely to work out cheaper overall, I think, when the loan is paid back, as the person never has to pay the higher €1400/wk rate.

    I was wondering if the scenario outlined above was feasible/made sense.
     
  4. twofor1

    twofor1 Frequent Poster

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    The assessed amount of €300 weekly on pension and €150 weekly on cash assets would suggest this person has a weekly income of €375 and cash assets of €104K.

    This person cannot afford €1,400 weekly for private nursing home care, the €104K savings would be gone in less than 2 years.

    Surely the only way to go in this case is to apply for Fair Deal and avail of the loan.
     
  5. hydrocarbon

    hydrocarbon New Member

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    In this scenario the cash assets are €36K higher, taking the exemption into account. As you say these savings would run out after about 2 years and then the loan would be needed. If the loan was taken out at the start I think it would save money.

    The same principle applies even if there were more savings and the cash didn't run out in the first three years e.g. with cash assets of €210K:

    Assesed weekly means: €1400 = 850 (house) + 300 (pension) + 250 (cash assets)

    I think the person would still save money by applying for the loan even if not needed for cash flow purposes.