Planning long-term care
Ensuring the care is there.
Most Canadians believe the government will take care of them in their old age. With an increasingly overburdened health care system, seniors may need help from their families to make their later years comfortable. So the earlier you start planning, the better their quality of life will be.
A recent Council on Aging of Ottawa report states that 43% of Canadians aged 65 will spend time in a nursing home or long-term care facility for an average of three to four years at some point in their lives. Of those, one in five will stay for more than five years. Surprisingly, about 40% of care recipients are people under the age of 65 who have suffered an accident or illness.
If this were to happen to one of your parents today, could they cover the costs? Or would you and your family have to carry the financial burden? The time to put a plan together is now, while they're healthy.
Long-term care insurance. Ongoing peace of mind.
If your parents do not have the financial means to comfortably afford long-term care, you might consider helping them purchase long-term care insurance†, perhaps sharing the cost of premiums with your siblings. You and your spouse may also want to think about a long-term care insurance plan for yourselves. Eligibility begins at age 40, and generally the younger you are, the lower your premiums will be.
Long-term care insurance plans provide coverage and deliver benefits in different ways, so it's a good idea to talk to your insurance specialist to find the plan that best suits your family situation. Some policies provide coverage from one to five years while others provide a pool of money which can be drawn over a lifetime. Coverage includes homecare, an assisted living facility and a nursing home as well as adult day programs and respite care.
There are three ways long-term care insurance can contribute:
- Reimbursement is usually the least expensive option, where the company pays all or some of the out-of-pocket costs up to a designated daily, weekly or monthly limit.
- Indemnity pays out a designated daily, weekly or monthly amount for qualified expenses. Proof of care is required.
- Income pays the designated daily, weekly or monthly limit, regardless of whether services were received. This is usually the most expensive option.
In-home or out?
The government's mandate going forward is to promote care "in-place" as much as possible. To this end, it supports the delivery of in-home services, providing assistance with daily needs like bathing, dressing and light household chores. There is also a tax credit for any renovations needed for seniors to stay at home. While relatively inexpensive, home care doesn't cover other necessities such as grocery shopping or transportation. Live-in care can also escalate costs. Much of the expense not covered by the government can be usually covered by long-term health insurance.
It should be about living, not waiting.
Assisted living is a strong option geared for people who are still relatively healthy and mentally competent but need help with food preparation and prefer the social aspect of having others around. A portion of the cost is often tax deductible. Many assisted living facilities are now being built with a "campus of care" philosophy, where graduated services are offered from independent and assisted living through 24-hour care. This model eases the transition between changing care needs.
The ideal scenario would involve you and your parents reviewing care options and facilities before they’re needed. Most facilities welcome visitors and it will helpful to preview a facility without a parent to get a feel for whether there will be a fit. It's important to choose a place where they have the opportunity to feel part of a larger community and that helps them stay engaged.
Full-time care? Where?
At some point, full-time care may be necessary for one of both parents, perhaps not in the same facility. For example, one may have dementia while the other is still relatively healthy. Again, preplanning will be essential to get on waiting lists at the right time and to ensure a funding balance between government plans, private income and insurance.