Fifty-eight years ago, Prime Minister Lester Pearson and nine premiers agreed to create the Canada Pension Plan, modelled on a plan crafted by the Quebec government. The CPP, flanked by Old Age Security and the Guaranteed Income Supplement, transformed life for millions of elderly Canadians, giving this country an old-age poverty rate almost half that of the United States.
Six decades later, it’s time for a new plan, one that a number of other countries have already adopted: a Canada Long-Term Care Insurance Plan, to provide a guaranteed quality of life for the elderly who are frail.
Like most other developed societies, Canada’s fertility rate is well below the level needed to sustain a population. Societies with low fertility rates and increasing longevity become old. Statistics Canada projects that over the next 25 years, the number of Canadians over the age of 85 could triple, to almost 2.5-million people.
In low-fertility societies, each generation is smaller than the one that came before, increasing the burden on the young to care for the old, and intergenerational tension.
Public long-term care insurance (LTCI) can relieve that tension and the burden on the young. Several European countries, Japan and South Korea already have some version of the program; several American states have implemented or are considering plans of their own. A Canadian version might look something like this.
Starting at age 18, workers and employers would each contribute the equivalent of 1.5 per cent of the worker’s wage to a long-term care insurance fund. Governments would draw from the fund to provide universal, accessible long-term care services based exclusively on need: equipping a home with mobility aids, providing meals and nursing services, paying the cost of assisted living, nursing-home and palliative care.
The advantages are many, but the greatest is reassurance: knowing that your late-in-life needs will be taken care of because of contributions you made while working.
Asking workers and employers to contribute to a dedicated fund would ensure that money is available when needed in the future, whatever the state of government revenues. The way CPP money is managed would be a useful model. It is run independently from the federal government by the CPP Investment Board and the money is invested in a diversified portfolio.
There is plenty of evidence that long-term care insurance promotes better care, and ultimately saves the government money, by increasing the years people are able to live in their homes in older age and reducing the time spent in nursing homes and hospitals.
LTCI reduces the burden on families – especially on women – caring for older relatives. Some programs even provide an income for family caregivers. A sliding scale of co-payments might be required, and individuals with resources could pay for enhanced care.
The program would promote social harmony. The young would know the needs of the elderly are being met, just as their needs will be met when they are old.
There are downsides.
Long-term care contributions would add to the tax burden of individuals and businesses, and would increase cost of adding employees. Ottawa will need to find other ways to offset that burden.
A universal public long-term care system would inevitably create a bureaucracy – officials coming into your home and deciding whether you are entitled to meal delivery or just a safety bar for the shower.
And there is a strong argument that people should take responsibility for planning for their final years.
But similar complaints attended another social program from the 1960s: universal public health care. Whatever its challenges today, most Canadians strongly prefer medicare to private health insurance. And a key benefit of LTCI cannot be understated: funding for long-term care would be placed beyond the reach of the government of the day.
There will be plenty to debate over what needs should be borne by long-term care insurance, by general government revenues and by personal assets. Federal-provincial negotiations will go on for years.
The challenges are daunting. But we have faced and overcome similar challenges – which is why we have unemployment insurance, public health care, and public pensions.