A vast majority of older Canadians would not be able to afford the potentially steep costs associated with long-term care, and yet few are using insurance to prepare for the potential expense, according to a survey commissioned by The Canadian Life and Health Insurance Association (CLHIA).
The survey by Leger Marketing gathered responses from 500 Canadians age 60-74 and 500 Canadians age 75-plus. It reveals that 56% of Canadians are unaware of the costs of long-term care in their province, and most are unprepared for the prospect of incurring such costs.
When told that the average cost of in-home long-term care per month is $5,100, 82% of women and 73% of men indicated that they would not be able to afford it.
Two-thirds of those surveyed said they do not have a financial plan to cover the costs of ongoing long-term care, and only 10% of respondents plan to use long-term care insurance.
“We need to acknowledge that we are facing a looming crisis in this country. Many older Canadians are on the verge of sticker shock when they inevitably come up against the need to pay for long-term care services,” says CLHIA president Frank Swedlove.
Women appear to be somewhat less financially prepared than men, with 70% of women saying they do not have a financial plan to cover the costs associated with possible long-term care needs, compared to 62% of men. CLHIA notes that this is especially troublesome considering that women have a longer life expectancy.
The lack of preparedness could have significant consequences for some seniors’ finances. Two in five seniors surveyed said they would use their savings or sell their home and move to somewhere more affordable in order to pay for long-term care services.
Altogether, CLHIA calculates that the baby-boomer generation will require $1.2 trillion to meet their long-term care needs. The association estimates that currently available government programs would only cover about half of the amount required to meet the needs of this population.
The survey results indicate that Canadians would like to see the government take action on this issue. Nearly two-thirds respondents said they would likely put money aside for long-term care if the government matched dollars they saved, similar to the Registered Education Savings Plan (RESP), or if tax credits were available. Half of respondents said they would prefer the government take the lead and add to the long-term care programs it offers, even if it means higher taxes.
“It is in the national interest that all levels of government and Canadians begin working together immediately to find solutions that will close the gap on what services are currently provided and what people can afford,” says Swedlove.