What About Long Term Care Savings Plan?

Jeffrey Simpson, Globe and Mail

The Globe and Mail’s series this week on dementia illustrates one part of a wider challenge: Canadians and their country are not yet properly prepared for the aging of the population.

There are many ways in which preparation is lacking, but consider one of the implications for health care of the population’s aging.

The Globe’s series drew attention to a debilitating problem that disproportionately strikes older people. But many other chronic medical problems exist for older people, too. So the question becomes: As the population ages, and some of the population grows infirm or seriously ill for long periods, who is going to look after them? Where will they be cared for? And who will pay?

A decade ago, about 8 per cent of the Canadian population was over 70 years of age. Today, it’s about 9.5 per cent. Since a big bulge of the population – about 19 per cent – is between 50 and 65 years of age, the share over 70 will rise sharply down the road.

As a general rule, today’s seniors live longer and healthier lives. Many have saved for their retirement, including the nasty surprises and high costs that accompany long-term care. But it’s also true that many haven’t saved for acute-care, should they require it, either in an institution or at home. Nor have public institutions built enough institutional or home-care capacity to deal with today’s long-term care demands, let alone the bigger demands of tomorrow.

The older you get, the more likely you will spend some time in hospital. There, the costs are sobering. The per capita hospital costs for the public treasury for men in the 60-64 year-old age bracket is about $2,000 a year. In the 70-74 age bracket, it’s just over $4,000; in the 80- to 85-year-old bracket, it’s $7,000.

That’s the cost to the public treasury. In the private sector, the costs to families of placing an elderly loved one in a private health-care institution can be enormous. Many retirement homes are divided by floor and, as such, are partially health-care institutions. Some floors offer limited care and therefore cost less. Others floors offer more intensive services and accordingly cost much more.

And then there are diseases such as Alzheimer’s and others that require specialized and very expensive care, sometimes are home, often for difficult cases in institutions.

Presumably, a lot of Canadians assume that if they ever need long-term-care facilities of whatever kind – up to and including the most acute care – the state will provide. After all, we have medicare, right?

Take Ontario as an example, however. The province’s health council estimates that 15 per cent of all hospital beds are taken by people who do not need them but cannot find alternative arrangements in acute-care facilities. That’s the situation today. Imagine the situation a decade from now, unless a crash program of building and training staff starts very soon.

It was reported by Anne McIlroy in The Globe’s series that tests will be able to predict with reasonable accuracy those most likely to fall victim to Alzheimer’s. Whether people want to know about this information decades before the condition strikes them is one question. But if they did know, could they be encouraged to start saving for their eventual health-care needs?

Which leads to a question not being debated in Canada: Should governments encourage Canadians, while they are healthy, to save as a contingency for the possibility that later in life they might have to bear the costs of long-term, and possibly acute, care for themselves or their loved ones?

The answer would be no to that question if everyone could reasonably assume that the state would provide. But, to repeat, if the state is not, or cannot, provide now, imagine its more limited capabilities down the road when demand will be greater.

Our governments through the tax system encourage people to save for retirement (RRSPs), education (RESPs), for just about anything (TFSAs). Could we not also think about designing a tax savings plan or credit that would encourage people to put money aside for self or family in the eventuality that some day they will need money for their own long-term health needs?

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