Senior couple planning a holiday

Canada should consider publicly funded long-term care (LTC) insurance to address the economic realities of the country’s aging population, suggests a new report from Toronto Metropolitan University’s National Institute on Ageing (NIA).

The report, released on Thursday, outlined how the aging population is leading to mounting LTC costs, requiring a viable solution.

Based on Statistics Canada data, Canadians aged 65 years and older will account for nearly 27% of the country’s total population by 2048, and the number of Canadians aged 85 and older is expected to triple in the same period — to as many as 2.8 million people.

In 2019, Canadian households spent $9.4 billion out of their own pockets to access additional LTC services beyond those that are publicly funded, according to the Organization for Economic Co-operation and Development, cited in the report.

Private insurers struggle to offer affordable LTC insurance premiums because of the small selection pool and high probability that the insured will require services, the report said.

“Establishing a national LTC insurance program in Canada 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,” it said.

Such a program could also help standardize care.

“A national LTC insurance program could present a chance to establish a national definition of LTC services, creating common standards for eligibility, benefits and the quality of care that Canada wants to commit to providing,” the report said.

The NIA examined LTC insurance programs currently offered by five countries and one U.S. state: Japan, Germany, South Korea, Taiwan, the Netherlands and Washington.

Each program varies in eligibility, benefits and user choice, and programs were financed through varying combinations of taxation, social contributions and out-of-pocket spending. The NIA applied its findings to the consideration of a national LTC insurance program in Canada.

For example, the potential program could support seniors to age in place by allocating LTC funding to more home and community care, instead of institutional care.

The program could also leverage Canada’s established network of public and private LTC home and community care providers, the NIA said. Establishing employees who work at a local level as care plan managers could help ensure that seniors receive appropriate, timely care based on their needs, the report suggested.

It also suggested using social insurance contributions as the program’s primary funding mechanism, supplemented by general taxation revenues. This would subsidize and redistribute costs across the entire Canadian population, which could lead to a more “equitable and sustainable” national program, the report said.

A national LTC program represents an opportunity to “reduce fragmentation, guarantee all Canadians
a basic level of service and financial coverage for LTC services, and create a more consistent and sustainable level of funding for LTC for future older Canadians,” it said.