By Ty Burke
Photos by Lindsay Ralph
Canada’s population is aging rapidly. The oldest baby boomers are now in their late seventies, and their large numbers pose a major challenge for our long-term care systems.
“A tidal wave is coming, and it’s big,” says Frances Woolley, a professor of economics at Carleton University.
Prof. Frances Woolley
“Most of the baby boomers are still pretty healthy, but over the next 20 years, a very large number of people will hit what is often called old-old age, and will need things like dementia care. Our systems are already barely coping with the long-term care needs of the population.”
Long-term care consists of assistance with day-to-day living for those who aren’t able to look after themselves. It can include help with household chores, keeping someone company or looking after their mental well-being. It is a lot more amorphous than regular medical care, and has flown under the radar as a policy issue, partly because many people assume their care will be covered. But most long-term care is not paid for by provincial health insurance plans.
“Our systems need more resources,” Woolley argues in a study on long-term care financing published by the Institute for Research in Public Policy. “But the question is, how do we find them? How will we find the wherewithal to provide care for so many people, and what basic principles will guide this spending in an equitable way.”
Who Should Foot the Bill for Long-Term Care Costs?
Many funding proposals centre on taxing younger generations. But in our current societal context, that won’t cut it, Wooley argues. Young people are already struggling with the high cost of living, and the wealth generated by rising house prices has primarily benefitted older generations.
“You need to find ways to share the burden among older folks, and not just put it on younger people,” says Woolley.
“That could mean asking people to pay more if they can afford it. Take into account wealth as well as income; we don’t need to be raising money to make sure that people can preserve their estate and pass money to their heirs.”
Woolley looks to Australia as one potential model. There, an individual’s real estate wealth is factored into what they must contribute.
“If you have substantial assets, you contribute part of your wealth to accommodation and care costs,” says Woolley. “For most people, housing makes up the bulk of their financial assets, and people in Australia contribute a portion of their home equity.”
In practice, that means when a person needs long-term care, some of the value of their home is used to pay for it. It is a little like a reverse mortgage, with the government taking an equity stake in an individual’s home, which is paid off later.
“It is not the entire value of the home, but a limited amount of home equity,” says Woolley.
“And there is a principle of protecting assets for surviving spouses and dependents.”
Another strength of the Australian system is its transparency. Benefit levels are clearly defined and can be determined using online calculators. That is very different from the model in place in most Canadian provinces, where people are assigned a caseworker and negotiate with them on a case-by-case basis.
“It is very hard to find out what you’re entitled to,” says Woolley. “The caseworkers are doing their best, but they’ve got a budget, and ten places to put every dollar. It’s very ad hoc, and hard on people who don’t have strong advocates.”
More Resources Needed to Support Seniors Aging at Home
There could also be considerable benefits in improving access to home care.
“There is a huge disparity between how we fund institutional care and home care. And if we’re going to say that we don’t have enough resources to go around, we need to think about how to distribute the resources we do have more equitably,” says Woolley.
Canada puts most long-term care resources into publicly-funded long-term care institutions, but those living at home have much less access. And the growth of institutional care, which requires investment in additional infrastructure, already isn’t keeping pace with the population’s needs.
“The province of Ontario has made many announcements about new beds, but the numbers they’re announcing are less than the number of people on the waiting list,” says Woolley.
“We’re attempting to patch a system that isn’t meeting people’s needs. You can imagine it like a dam, and it’s starting to get some leaks, and we’re patching them, but there is a tidal wave coming. It’s not going to cut it. You need to think about a fundamental policy redesign, and it needs to be guided by the principles of equity neutrality, transparency, risk-sharing and adequacy.”
Thursday, December 7, 2023 in Economics, Health, IWD 2024, Research
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