Matthew Hancock MP: Insurance that works - a solution to the pressing problem of social care

Matthew Hancock is the Member of Parliament for West Suffolk. Follow Matt on Twitter.

Many of us have personal experience of the injustices of social care. Yesterday, the progress towards a solution got an airing in the media, and today, the Commons will debate this issue.

It's a pressing, long term, problem. For decades, people have been forced to sell their homes to pay for care, and we have failed to ensure vulnerable people live out their years with dignity. It's a challenge facing developed countries across the world, as each deals with major demographic changes. The UK’s current system, designed in 1948, is inconsistent, and does not support people who work hard and save hard their whole lives, with some losing up to 80% of their savings. It is no longer suitable for the 21st century.

The key question is, of course, who pays? The Dilnot Commission came forward with a package to end the most egregious unfairness, but without a consensus on who should pay the price tag of £1.5bn to £2bn.

The problem is made worse because of uncertainty. No one knows how long they will live in need of care. Some people need none at all; other need decades of round the clock support.

This sort of uncertainty in other areas of life is met with insurance.

If you have the mind to do so, you can currently insure against almost any risk. Specialist underwriters, most of who are found in the Lloyds of London market, have insured a master butcher’s tongue for £1 million, celebrity body parts of every imaginable kind, and even £200,000 for the walrus moustache of one of the greatest cricketers of the 80s, Merv Hughes.

But despite this there is currently a failure in the insurance market to allow us to insure against the potential costs of care. This is a result of the ‘tail-end’ risk to insurers being extremely high; a small number of people will need exceptionally expensive care, to which the insurer would have unlimited exposure. Yet almost all of us play down risks in the distant future at the best of times. We don't like to think of just how much it might cost. After all, it probably won't.

The Dilnot Commission found that most people are completely unaware of how the care system works. If the Government can raise awareness of the potential costs and make attractive policies commercially viable then we can reduce the cost – a virtuous circle.

We are currently moving towards a solution. I welcome the draft bill in the Queen’s Speech. Now the Gvernment must come forward with a proposal that is fair, and affordable, on which political consensus can be built. Solving the injustice of social care can be a goal we can all be proud of.