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Centre for Health Economics and Policy Analysis


Long-term care should be financed by a public insurance program: study

29 Jun 2012

Canada should implement a public insurance program to finance long-term care, concludes research conducted for the Institute for Research on Public Policy (IRPP) by CHEPA director Michel Grignon and Nicole F. Bernier, research director for the IRPP’s Faces of Aging program.

The conclusions of their study, Financing Long-Term Care in Canada, have been widely cited by media outlets.

As Canada’s population ages, a growing number of frail seniors will require long-term care services to help them perform daily activities such as eating, dressing or bathing. However, access to long-term care and its cost to individuals vary depending on the region where they live and whether they are still at home or in a residential facility. Ensuring that adequate care is accessible to every Canadian who needs it and financing it in a transparent way should be a national priority, Grignon and Bernier say.

Based on a review of the literature (including empirical evidence from other countries), and after examining the pros and cons of the main options for financing long-term care: private savings, private insurance and universal social insurance, they conclude that the Canadian government should adopt a universal public insurance scheme for long-term care. It is the only efficient way to raise revenues to cover the highly uncertain costs of long-term care, they argue, and it would ensure better equity among dependent Canadians by covering care services provided in both residential facilities and at home.

The authors conclude that governments would be well-advised to adopt a new  universal public insurance plan that provides full coverage based on an
evaluation of care needs and be financed by an earmarked sales tax to be placed in a dedicated fund.

Michel Grignon is director of the Centre for Health Economics and Policy, and he is an associate professor in the Departments of Economics and of Health, Aging and Society at McMaster University. He is also an adjunct scientist at the Institute for Health Economics in Paris, France. Before joining McMaster in July 2004, he worked at the Institut de Recherche, d’Etudes et de Documentation en Economie de la Santé (IRDES) in Paris. He obtained his master’s equivalent at the National School for Statistics and Economics in Paris, and his PhD at
Ecole de Hautes Etudes en Sciences Sociales, also in Paris. He has extensive experience at the international level in research projects and activities in the areas of health economics, health-related policies, health insurance and aging. His current research is on how an aging society impacts health care expenditures in Canada and in France and inequities in health care utilization and health policy in Canada.

Nicole F. Bernier is the research director for the IRPP’s Faces of Aging program. She holds a doctorate in political science and specializes in health and social policies. For over 20 years, she has had a keen interest in Canadian and Quebec public policy, during which time she worked in the field of communications, as a university researcher and teacher, and as a journalist.



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