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A new report from a Toronto Metropolitan University think tank has proposed that public insurance for long-term care services could be a “financial lifeline” for Canada’s aging population.
Researchers at the National Institute on Ageing looked at six jurisdictions with established public long-term care insurance programs, and considered how the model could be applied in a Canadian context.
Their paper, published Thursday, said a potential insurance program would likely require some contributions from Canadians through wages or taxation, similar to how the Canada Pension Plan and national health insurance program are funded. In return, people would receive a guaranteed level of financial coverage and long-term care, including home care and long-term care home services.
The report noted that nationalized long-term care insurance wouldn’t lower the overall costs of long-term care, but it would ensure older Canadians have access to basic coverage for their future care needs.
“Establishing a national LTC insurance program could present a unique opportunity to re-imagine Canada’s social contract and better align its provision of LTC services to the needs and preferences of older Canadians,” Dr. Samir Sinha, director of health policy research for the institute, said in a news release.
COSTS OF LONG-TERM CARE
He noted that the level of public funding currently available has not met Canadian’s long-term care needs, and the paper highlighted the financial burden long-term care can place on households.
In-home services can cost up to $3,500 per month, and 24-hour support can reach $25,000 per month, the report said. The report added that those prices tags can be “crippling” for older adults, who now live about 22 years past the age of 65.
The report also explained that private insurance for long-term care is currently available in Canada but at high premiums, making it difficult to attract customers.
Washington State, the first U.S. jurisdiction to establish a public long-term care program, did so in part because its population was aging, but few residents were able to afford services, the report said. That program is set to start collecting premiums this year and make benefits available in 2026.
Germany and Japan, two of the countries studied in the report, implemented long-term care insurance programs when they had similar demographic pictures to Canada’s, where about 19 per cent of the population is now aged 65 or older.
Those countries brought in their programs to help alleviate the financial burden of paying for long-term care, while other countries like the Netherlands and South Korea began their programs earlier in their demographic transitions.
The report said Canada would need to consider its objectives for a long-term care insurance program, as many older adults want to age in their homes, and wait lists for long-term care homes already stretch into the tens of thousands.
POTENTIAL CARE IMPROVEMENTS
Thousands of Canadian seniors died in long-term care homes during the COVID-19 pandemic, and the crisis highlighted the need for improved living and care standards in the facilities.
The report said public long-term care insurance might serve to improve the quality of care people receive, as well as see improvements in governance and resource allocation, because the program would have to set definitions for the services and standards people are entitled to.
It could also “greatly reduce fragmentation and lead to more equitable service coverage and financial protection,” the report said.
The case studies researchers looked at funded their programs through social insurance contributions or taxation, as well as some premiums collected at the point of service. There were also some contributions from employers, insurance programs and various levels of government.
Taiwan was the only jurisdiction that funded its program primarily through revenue from taxation on items like tobacco, and along with South Korea, that country exempts lower-income and high-risk people from paying premiums on services.
The researchers laid out several suggestions for how Canada could implement a long-term care insurance program, first by establishing an individual’s contributions and the benefits they would receive later on.
Canada’s existing network of long-term care providers could be leveraged to set up the program, they said, and “care managers” working at local levels could ensure people’s specific needs are being met.
The paper recommended social contributions as a primary funding mechanism, and suggested that the program could be used as an opportunity to reallocate funding towards home and community care options, as well as establish standards for care.