Income Support: Protected Payments for HIE Recipients
Issue
Further to the introduction of the Income Support (IS) system on 28 January 2008, the Minister is considering transitional support arrangements for some previous recipients of Health Insurance Exception (HIE) whose eligibility for previous benefits was at a level above their Income Support entitlement. HIE recipients within the Income Support system were automatically awarded an additional component specifically to help with GP fees.
Unlike other legacy benefits which resulted in a fixed payment to the recipients, HIE did not result in a direct payment to the recipient, but a variable entitlement paid direct to the general practitioner (GP) or pharmacist. The value was dependent upon the frequency of GP consultations and the quantity and type of medicine prescribed.
HIE was a poorly targeted benefit, not necessarily based on medical need and awarded on a family basis, whereas Income Support ensures that money goes to individuals who have identified ongoing medical problems through a direct payment to the Household for GP costs.
In order to allow for as smooth a transition as possible for recipients from the legacy benefit systems into the Income Support scheme, a system of transition payments which protected, on a phased basis, payments equivalent to legacy benefit entitlement have been introduced. No such protected payment, equivalent to HIE, was introduced given the variable value of that benefit.
It is now proposed to introduce a fixed transition payment rate to protect those previously in receipt of HIE and deliver this through the Household Medical Account (HMA).
Background
HIE was an additional subsidy for certain families prescribed under the Health Insurance Law towards the cost of visits to the GP. It has been succeeded by the Clinical Cost Element (CCE) of the Impairment Component of the Income Support scheme which targets additional subsidies to individuals with identified ongoing health problems.
In recognition that some families would find it difficult to save/budget for doctor’s bills, particularly for unexpected bouts of ill health, the HMA was devised. A family or individual receiving Income Support (who previously received HIE) can save some of their benefit each week into the HMA to cover the cost of GP visits.
As long as regular savings are made into the HMA, then the GP’s bill will be paid even if there is insufficient money in the account at the time. However, if a negative balance continues, then an Income Support Adviser will contact the claimant: It may be that savings need to increase, or the individual would be entitled to a higher award of benefit either through the CCE or a special payment, because their health has deteriorated or they have suffered an acute incident. As part of the claim process the Department obtains consent to contact the claimant’s doctor and will continue to liaise with the doctor as appropriate.
By paying money into the HMA account, the money is in-effect, ring-fenced for health care purposes.
The Need for a Household Medical Account (HMA)
To help people move into the new IS system and provide them with time to adjust to the changes, Protected Payments have been made to those who were eligible for previous benefits, at a level above their Income Support entitlement.
For all HIE recipients (as at 27 January 2008) assessed under the Income Support criteria, a transition award of the Clinical Cost Element (CCE) of the Impairment Component is included. However, due to the generosity of the means assessment for entitlement to HIE, some families have not qualified for an Income Support benefit, and so the Department has been unable to set up an HMA for such families.
The Department had foreseen that some families would be in this situation, but would be able to use the Special Payment route for any additional help required. (Families whose income is no more than 10% above the Income Support level may be eligible for special payments). However, it is now apparent that this group would prefer to utilise the HMA route which is more convenient for them and improves access to the GPs as well as resulting in reduced administration.
To achieve this, it is proposed that an additional Protected Payment be introduced for previous HIE recipients. This payment would be included as part of the existing transitional arrangements under Income Support.
Protected Payment Proposal
Eligibility for the HIE scheme was not based on clinical criteria, so little is known by the Department about the health status of many previous HIE claimants. However, it is likely that some individuals may qualify for further subsidies under the Impairment Component of IS. Awarding a Protected Payment allows time to review all claims and target subsidies accordingly.
In addition to helping claimants save, the HMA mechanism provides a method of direct payments to the doctor from the family’s HMA. When claims are reviewed, a decision can be taken as to whether to continue the HMA. The decision taken must be advantageous for the individual: some may use the Protected Payments to keep the HMA going; others will receive the money and pay directly for their doctor’s fees.
It is proposed that the Protected Payment is set at £1.96 per person per week. This is based on the sum estimated as required to pay the co-payment (on average) of four surgery visits per annum per household member.
Costs
Approximately 1,000 households will benefit from this additional Protected Payment. The full annual cost estimate is £150,000 which can be accommodated from existing budgets.
There will still be some further cost through the award of special payments as some people may need more visits to the doctor. However, this is as anticipated, and an element of the Income Support budget has been set aside for such circumstances.
Conclusions
This proposal allows people access to GP services and gives them the security of saving towards payment of their GP fees, through the HMA mechanism.
The cost of the Protected Payments can be met from provisions made within the existing budget available for transitional and Income Support payments.
Recommendations:
It is recommended that the Minister:
- Amend the Income Support (Transitional Provisions) (Jersey) Order 2008 to include a specific Protected Payment of £1.96 per week to individuals who were in receipt of HIE immediately prior to 28 January 2008 (who have applied for Income Support and continue to meet the eligibility criteria for HIE as the legacy benefit), with effect from 28 January 2008.
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