Christmas has come early for home care providers after the government surprised the sector by announcing that price caps on services in the new Support at Home program will be staged.
This means that from July 1, 2025, home care providers will continue to set their own prices for Support at Home services, exactly like they do in the Home Care Packages (HCP) Program.
Then, from July 1, 2026, the government’s set price caps will apply.
The delay intends to support service continuity for providers and participants transitioning from the current home care setup to Support at Home.
Several consumer protections will be introduced to monitor prices and ensure pricing is fair during the transition year.
This will be in addition to existing Consumer Confidence Protections, including the lifetime cap of $130,000 on co-contributions, the banning of entry, exit and other hidden fees, the no worse-off principle and a strong financial safety net for people who cannot afford to make co-contributions to the cost of their aged care.
Responding to the news, Catholic Health Australia (CHA) welcomed the government’s decision to support more flexible pricing.
“By using pricing benchmarks instead of pricing caps, the sector can focus on delivering high-quality care that meets the preferences of older Australians using pricing that reflects the true cost of providing services in the home,” CHA Director of In-Home Support Alex Lynch said.
“This flexible approach will be more effective than the originally intended price caps in meeting the ambitious goals of the Aged Care Act to dramatically increase access to high-quality, in-home aged care services in the coming years.
“This flexibility will help ensure the sector can deliver on the Government’s vision for high-quality, sustainable aged care in a way that meets the needs and aspirations of older Australians themselves.”
The delay also affords the Independent Health and Aged Care Pricing Authority (IHACPA) more time to undertake further consultation and provide expert advice to inform these pricing arrangements. It will no longer have to guess the potential impact of the new Aged Care Act and Support at Home, rather, it can monitor it’s influence in real-time.
IHACPA completed a public consultation period in October. Before the government’s announcement, it said a public consultation report would be published in 2025 alongside its pricing advice.
What do these changes mean for providers?
The Department of Health and Aged Care will survey providers in early 2025 to seek information about their prices under Support at Home. More information is scheduled for publication in March.
Meanwhile, providers must continue to agree to any price changes with home care clients. The government expects providers to begin discussions with participants around service agreements for Support at Home, including pricing, from April 2025.
From 1 July 2025, providers will need to start sharing their Support at Home pricing information with the department, which will be published on My Aged Care, while also publishing their full schedule of prices on their website.
The department will monitor prices charged in the first year of the Support at Home program. Program assurance activities will include engagement with providers who charge prices that appear inappropriate to seek to understand the reasons why.
More information on provider expectations is available here.
Additionally, providers have more control over their prices to accommodate the reduced 10% care management fee. While this fee can be pooled to provide equitable outcomes, the reduction from 20% will be a shock to the system for many.
The ability to continue setting their own prices means home care operators can indicate to the government and IHACPA what sustainable prices look like. Providers will also be able to reflect wage claims in price increases.
Critically, older people accessing aged care services will receive continuity of care and enjoy more financial protections regardless of whether they are required to contribute more to their care or not.
More information on how these changes influence older people, families and carers is available here.
“CHA is supportive of common-sense measures to ensure that older Australians cannot be taken advantage of,” Mr Lynch added.
“It is important the transition to the new program is handled smoothly, otherwise there is a risk of disruption to patient care and gaps in service delivery. We must ensure we get this historic reform right.”
