Can healthcare provide intergenerational equity?

The Institute and Faculty of Actuaries (IFoA) has today (13 October 2017) published the third and final bulletin in its series on intergenerational fairness. This bulletin seeks to inform the debate around health and social care by looking at the way some of the issues can be seen through an intergenerational lens. As the ageing population puts increased strain on health and care services, we have asked a range of experts to examine the implications for older, younger and future generations.

Health and social care spending is going up as people live longer, suffer from more complex conditions related to old-age, and receive more treatment. This has been apparent for some time, but there is still no clear answer to the difficult question of who will pay for this increased cost, given that government funding alone will not be sufficient. Any changes to the healthcare funding model need to acknowledge that the incomes of the retired population are now higher than those of the working population for the first time [2].

Jules Constantinou, President-elect at the IFoA, said:

“We believe actuaries can provide crucial long-term analysis needed to inform this debate. Our report emphasises the major disparity in the current distribution of wealth. Younger generations are dealing with a number of financial challenges such as falling wages, university debts and higher housing and living costs. Meanwhile, the over-65s are provided with a range of financial support including winter fuel payments and free prescriptions, as well has having significant housing wealth, final salary pensions and a guaranteed uprating of the State Pension.

“One solution put forward by the Intergenerational Foundation amongst others is to ask the older generations, who use the service the most and hold a larger proportion of the national wealth, to make a greater contribution to the increased costs of healthcare. This is certainly controversial but we need to avoid short-termism and have honest and open discussions about how to create a long-term solution that works for all generations”.

The bulletin also considers the way that the ageing population will change the structure of our workforce. Research from the Centre of Ageing Better shows that older workers want the same as their younger counterparts: to make a meaningful contribution to an interesting role. But one major difference is that people aged 50 and over are more likely to suffer from health conditions.

Patrick Thomson at the Centre of Ageing Better, said:

“Currently, less than half of people are still in work the year before they reach State Pension age, and ill health is the single biggest factor that pushes older workers out. Without flexible or preventive measures in place, it becomes increasingly likely that this group of people will continue to be pushed out.”

Employers have a role to play, offering flexible working and supporting good health in the workplace. This will help to reap the benefits of an intergenerational workforce.

The IFoA will be holding an event to launch the bulletin today (Friday 13 October) at Staple Inn Hall, High Holborn, London, WC1V 7QJ. Our panel of thought leaders will discuss the issues policymakers need to take into account if we are going to meet today’s needs, without putting younger or future generations at a disadvantage.

Speakers include:

• Patrick Thomson, Senior Programme Manager at the Centre for Ageing Better
• Joseph Ahern, Policy Advisor at the Association of British Insurers
• Angus Hanton, Co-Founder of the Intergenerational Foundation

If you are interested in attending the event at Staple Inn or would like a copy of the Intergenerational Fairness Bulletin on Health and Social Care, please contact Sonia Sequeira, Media Relations Manager.

Editorial notes:

1. Intergenerational Fairness Bulletin from the Institute and Faculty of Actuaries. Health & Care. October 2017.

2. Institute for Fiscal Studies Lecture, 20 October 2015

About the Institute and Faculty of Actuaries

The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body.

Research undertaken by the IFoA is not commercial.  As a learned society, research helps us to fulfil our royal charter requirements to further actuarial science and serve the public interest. 

Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.

Members of the IFoA have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.

Members are governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of actuaries in society.

The IFoA is available to provide independent expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.