Panel calls for state-run LTC insurance

(July 28, 2005) In what could be seen as a threat to the long-term care insurance industry, a Quebec task force on health care is calling for implementation of a state-run “loss-of-independence insurance plan” to bridge the gap between current healthcare insurance and the costs incurred by the elderly in a nursing care setting.

“The most effective way to ensure that younger generations do not have to bear the high costs related to the baby boomers’ loss of independence is to share the burden and fully fund the cost, with due regard for the factors of age and income level,” said L. Jacques Ménard, chairman of the Working Committee on the Sustainability of the Quebec Health Care and Social Services System.

The committee points to France, Germany and Japan as examples of how the system could work, and suggests their programs could be modeled and customized to augment the Canada Health Act.

Canada’s long-term care facilities are already operating at full capacity and the massive baby boomer generation has yet to enter the system.

The committee is calling for a plan that would operate separately from medical and hospitalization insurance plans. The goal would be to allow aging individuals to stay in their own homes longer before entering palliative care.

“Eligible persons would be free to receive the planned benefits in cash or in kind, and in the former case, to choose the supplier themselves, including informal caregivers certified by the responsible agencies,” Ménard said. “The amount of assistance would vary according to pre-established loss-of-independence levels,”

If the plan were instituted tomorrow, for example, those who are nearest to entering the long-term care system would pay the highest premiums. Younger people covered by the plan would pay much lower premiums which would increase through annual indexing.

“It would be irresponsible of us not to take advantage of the short time that remains to give ourselves the means of dealing with the significant and unavoidable increase in the demand for services in this area,” said Ménard. “It is essential that, as soon as possible, the government carry out the additional studies necessary to specify the terms and conditions of the plan best suited to the Quebec reality.”

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com