The majority of Canadians aren’t financially prepared for long-term care needs. That’s the finding from a poll by the Canadian Life and Health Insurance Association (CLHIA), which found that 74% admit they have no financial plan to pay for long-term care should they need it.
“Canadians have not adequately prepared for their future long-term care needs,” said 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. Governments and Canadians have to work together to help close the gap by being more effective in how long-term care is provided.”
Boomers currently account for 33% of the population in Canada. There are currently about 14% of Canadians that are over the age of 65. An analysis of today’s demographics suggests that by the year 2036, 25% of the entire population will be over the age of 65. In addition, according to Statistics Canada, the chances of requiring long-term care are one in ten by age 55, three in ten by age 65 and five in ten by age 75.
The following examples illustrate the importance of age-related health issues and put the aging of the population in context. Currently:
- 225,000 Canadians turn 65 each year;
- about 7% of Canadians age 65 and over reside in health care institutions;
- one in 11 Canadians over the age of 65 is affected by Alzheimer’s disease or a related dementia; and
- about 50,000 strokes occur in Canada each year, with stroke being the leading cause of transfer from a hospital to long-term care.
The CLHIA estimates 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 the equivalent of about 95% of all individual registered savings plans in Canada today.
To address the issue, the CLHIA has released a paper, Improving the Accessibility, Quality and Sustainability of Long-Term Care in Canada, setting out recommendations to ensure that Canadians will have access to long-term care services through old age. Among its recommendations are the following:
- encouraging Canadians to save for long-term care through savings products and incentives;
- adopting a patient-centered approach to long-term care;
- restructuring of long-term care to recognize the continuum of care;
- ensuring sufficient capacity of long-term care; and
- encouraging health and wellness promotion.