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The Real Costs of Long-Term Care - and The Cost of Doing Nothing by Michel Grignon and Nicole Bernier
The Real Costs of Long-Term Care - and The Cost of Doing Nothing by Michel Grignon and Nicole Bernier
public, universal, compulsory and standardized insurance coverage. In other words, a public long-term care insurance plan, along the lines of what medicare already does for medical care in Canada, is the most desirable option. Public long-term care insurance is the best option for two reasons. First, insurance is essential because private savings is not an efficient way for individuals to provide for their potential future care needs, as we have already stated. It makes good sense to have the lucky ones (those who can live independently) transfer resources to those needing care. Second, insurance must be public, and not a mixture of public and private, or private. Private and public insurance cannot be combined because if there was a public means-tested program there would be no incentive for individuals to purchase private insurance. Hence a private-public mix would fail to produce universal coverage. Private insurance alone will not result in universal coverage either. Data from the OECD indicate that private long-term care insurance is not widespread in wealthy countries. Less than 1% of Canadians and less than 10 percent of Americans have long-term care insurance contracts. There are many possible reasons for this: perhaps people do not think they will require long-term care 20 or 30 years in advance of the need, and perhaps the premiums charged for long-term care coverage are too high because companies need to balance systemic risk (the significant time lapse between premiums collected and payouts). So the best option is a public insurance scheme with a single payer that provides benefits based on a standardized evaluation of care needs. This would ensure that all Canadians have better care and that access to long-term care services is more equitable. With a universal public insurance plan transaction costs and loading fees would be lower, so it would also be less expensive than private insurance. Overall, a universal public insurance plan would be far better than the fragmentary systems we have at present, which poorly serve those Canadians who need them most, often at the greatest cost. Michel Grignon is an expert advisor with EvidenceNetwork.ca, an associate professor with the departments of Economics and Health, Aging & Society and McMaster University and Director of the Centre for Health Economics and Policy Analysis (CHEPA). Nicole F. Bernier is the research director of the Faces of Aging program at the Institute for Research on Public Policy.