The Hill Times: Who's going to pay for that?

The first step to making positive change is admitting that there is a problem. Unfortunately, the majority of aging Canadians still don’t realize that they will have to take personal financial responsibility for a significant portion of their long-term care. In the end, this lack of awareness is holding us back from the meaningful and urgent reform that is required. 

According to a Léger Marketing poll of Canadians aged 60 plus, conducted on behalf of the Canadian Life and Health Insurance Association Inc. (CLHIA), 56 per cent of Canadians are not familiar with the costs of long-term care in their province and two-thirds (67 per cent) do not have a financial plan to cover the costs of ongoing long-term care.

This is particularly alarming given the reality that there simply are not adequate government programs to cover the future costs of long-term care for the baby boomer generation as they pass through old age.  

In late 2012, the CLHIA conservatively estimated that the costs to support the long-term care needs for boomers over the next 35 years will be $1.2-trillion and that existing government programs will cover only about half of this. Where will the funds come from to cover the remainder? To provide a sense of the magnitude of this challenge, $600-billion is roughly equal to all the individual registered savings in Canada today.  

While it is not realistic to believe governments alone can meet this gap given fiscal restraints, there are three broad areas where governments can do more. First, they must become much more effective at utilizing their long-term care resources.  We estimate that if Canada transitioned the nearly 7,500 patients in acute-care hospitals who are waiting for a long-term care bed into a long-term care facility, and also provided adequate support to significantly increase the number of Canadians aging in the home, that governments would save $140-billion over the next 35 years. Not only does this type of reform result in significant savings, but we know that Canadians overwhelmingly prefer to age in their homes if at all possible. 

Secondly, these savings should be used to help Canadians take financial responsibility for their own long-term care needs. The CLHIA/Léger poll clearly shows that Canadians would welcome incentives by governments to help them save for possible long-term care costs.Two-thirds of Canadians aged 60 plus said they would put money aside for long-term care if the government matched dollars they saved, similar to the Registered Education Savings Plan.

Finally, we believe that both the public and private sector must work together to help address the shortages in the infrastructure and human resources required to care for baby boomers as they age. We know that, even today, there is a shortage of long-term care facilities and health-care professionals who specialize in assisting with the elderly. These shortages will only become worse going forward unless we take action in the short term to increase the supply of these specialized caregivers.

Considering the magnitude of the issue, as well as the current fiscal challenges, governments will not be able to provide all the funding for new facilities and staffing. It is critical, therefore, that the private sector be engaged to meet these needs.

Canadians do not understand how exposed they will be financially when it comes to their future long-term care needs. We need to urgently help individuals understand that they will have to take financial responsibility for their own care as they age. Governments need to play an active role in helping Canadians prepare financially for what lies ahead. They also need to undertake significant reforms in the short term, in order to help address the long-term care facility and human resources shortages. The time for action is now—the longer we wait, the more difficult addressing these issues will become. 

Frank Swedlove is president of the Canadian Life and Health Insurance Association having joined the association in July 2007. Mr. Swedlove is also the first chair of the Global Federation of Insurance Associations (GFIA). The federation was established in October 2012 and has as its members 32 associations representing 88 per cent of the insurance premiums worldwide.

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The Hill Times

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