It's not a topic that most people want to think about, but as Canada's population ages it's inevitable that some of us will need long-term care, and paying for it could be an issue.
Long-term care is the term used to describe the type of care required for people who may have ongoing physical or mental impairments and require daily assistance or support over many years. This support can be provided in the home or in an institutional setting. Often, those requiring long-term care are elderly.
Three quarters of Canadians (74 per cent) admit they have no financial plan to pay for long-term care if they need it, according to a poll by Leger Marketing conducted on behalf of the Canadian Life and Health Insurance Association (CLHIA).
"So many of us have not adequately prepared for future long-term care needs," says Frank Swedlove, president of the CLHIA." Baby boomers are aging and unless action is taken now, they will fall well short in funding their long-term care."
The CLHIA estimates that it will cost almost $1.2 trillion to provide long-term care to the baby boomer generation as they pass through old age, and that current government programs and funding will only cover about half of this. The resulting $590 billion funding shortfall is equal to about 95 per cent of all individual registered savings plans in Canada today.
"Not only does the current system not have adequate capacity for our future needs, but patient care also suffers because all too often, care is not provided in the most appropriate settings," adds Swedlove. The Leger poll also showed that 77 per cent would prefer to receive care in their own homes.
Governments can help close the funding gap by being more efficient and effective in how long-term care is currently delivered, and by providing incentives to Canadians to take responsibility to protect themselves from possible high long-term care costs. One such possibility would be to introduce an RESP-type savings vehicle targeted at long-term care costs or provide tax incentives for the purchase of long-term care insurance.
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