Social Policy in Ontario

Canadians close their eyes to the staggering cost of elder care

Posted on February 27, 2013 in Child & Family Policy Context

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TheStar.com – opinion/editorialopinion – No one has to clue how to pay for elder care as the population ages and families stagger under the load.
Feb 27 2013. By: Carol Goar, Editorial Board

Every table was packed. Graham Fox, president of the Institute for Research on Public Policy, knew the luncheon panel would be a sellout.

He introduced the topic — Paying for Elder Care — and invited the three speakers directly to the podium.

The first was David Baker, assistant vice-president of Sun Life Financial. He made the case for private long-term care insurance.

The gist of his speech was a wake-up call to baby boomers. Too few recognize they are on “declining trajectory” he said. “People need a more realistic expectation of what retirement might look like — it’s not all cruise ships and golf courses.”

When consumers stop deceiving themselves, the market for long-term care insurance will improve, Baker said.

For a knowledgeable audience, his presentation offered little insight.

The second panellist was Michel Grignon, director of the Centre for Health Economics and Policy at McMaster University. He made the case for a universal public insurance plan to cover long-term care.

His address, backed up by a 27-page study, was meticulously researched. He examined all of the options — private, public, a mixture of both — and concluded a new taxpayer-funded plan would be fairest and most efficient way of providing elder care.

The problem with Grignon’s argument was his blithe assumption that Canadians would willingly pay for the program. “You can use sales taxes or value-added taxes, not just income taxes,” he said, as if that somehow made the price tag — an estimated $1.2 trillion over the next 35 years — more palatable.

For those working in the field, a grand scheme without a credible funding mechanism amounts to a pipe dream.

The final speaker was Michael Decter, a Harvard-trained economist who spent half of his career in the public sector, serving as Ontario’s deputy minister of health, chair of the Canadian Institute for Health Information and chair of the Health Council of Canada; and the other half as chief executive officer of an investment management firm.

Sensing the mood in the room, he pulled no punches. “It’s a terrible time to talk about big new spending plans,” he acknowledged. “But we have to retool the programs we’ve put in place. We’re living longer, but we haven’t adjusted our hospital insurance or pension plans.”

The challenge is not insurmountable, he assured the audience. Germany has done it. Several other nations — Japan, Korea, the Netherlands and Luxembourg — are following the same path. But it will require a mix of public and private funding.

He envisages a framework like the Canada Pension Plan into which workers and employers would contribute. Ottawa would administer it and the provinces would ensure that home care and long-term care were there for Canadians as they aged.

He also believes unpaid caregivers should be eligible for cash benefits. “Within family structures, there’s often someone who is dragged into providing care at no cost.”

Not only would this be more equitable than a plan covering only institutionalized care (which 80 per cent of Canadians will never need); it would give contributors a reasonable expectation of getting something back for their money.

The leadership, Decter suggested, would probably have to come from one of the provinces. “Quebec usually plays that role, but it’s financially strapped right now.”

What all three speakers agreed on was that it is critical to get Canadians thinking and talking about this issue. The existing elder care system is breaking under the strain — the waiting list for a spot in a nursing home is approximately 20,000 in Ontario alone — and the baby boom hasn’t even hit its heavy-need years. Home care is severely underfunded. And hospitals, the most expensive option, can’t accommodate an influx of frail, elderly patients.

The red flags were obvious to everyone in the room. Outside, people went about their business, assuming the elder care system would be there when they needed it.

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Tags: budget, disabilities, jurisdiction, pensions, standard of living

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