• Home
  • Health & Wellness
  • Disclaimer
    • Terms of Use
    • Privacy Policy
    • DMCA Notice
  • Home
  • Health & Wellness
  • Disclaimer
    • Terms of Use
    • Privacy Policy
    • DMCA Notice
24/7 Health News
No Result
View All Result
Home Article

Older Canadians’ savings are shaped by their long-term care preferences

September 17, 2023
in Article
Older Canadians’ savings are shaped by their long-term care preferences
A recent study has found that Canadians are highly motivated to save money in preparation of long-term care. (Shutterstock)

Canada’s aging population is growing. According to the Organization for Economic Co-operation and Development, the proportion of Canadians aged 80 and older will surpass nine per cent by 2050, up from 4.3 per cent in 2021.

This demographic shift is happening in most developed nations, and will result in a greater demand for long-term care. Québec, for instance, anticipates that 600,000 people will need long-term care by 2050 — nearly double the current number.

Meanwhile, escalated care expenses in recent years, attributed to labour shortages and exacerbated by COVID-19, are a pressing concern.

Table of Contents

  • The costs of long-term care
  • Long-term care and savings
  • Long-term care insurance
  • Policy implications

The costs of long-term care

In Québec, the rates (before any income-based subsidy) for public nursing home accommodations are around $2,000 a month. But since public nursing homes have such long waiting lists, some choose private nursing homes instead. The costs of private nursing homes are estimated to be between $5,000 and $8,000 a month.

Home care — a preferred option for many — costs around $5,550 a month, excluding additional expenses like maintenance and food. Consequently, long-term care expenses present a substantial financial risk in old age, potentially motivating people to save for it ahead of time.

While both nursing homes and home care impose financial burdens, their distinct cost structures can influence precautionary savings in different ways.

Nursing homes bundle accommodation and food, offering limited additional services. In contrast, home care recipients can allocate savings for quality-of-life improvements like better food, home maintenance, etc. Additionally, people may inherently value spending more while at home.

Long-term care and savings

Our recent research project aimed to understand how preferences for home-based care versus nursing homes affect people’s savings, using both survey responses and a simulation study.

Our research is crucial for two reasons. First, even before the pandemic, a reluctance to be institutionalized — known as institutionalization aversion — was documented. Second, COVID-19 has further discouraged nursing home entry, possibly due to excess mortality in nursing homes, as has been documented in many countries.




Read more:
Inquiry into coronavirus nursing home deaths needs to include discussion of workers and race


To model savings in different care settings effectively, we needed to understand how individuals allocated their resources in those settings. To accomplish this, we developed a set of survey questions aimed at uncovering these preferences.

These survey questions were designed to prompt respondents to consider how they would allocate their resources depending on the long-term care setting in a well-defined, hypothetical scenario.

Survey respondents were randomly assigned to different long-term care settings (home care, semi-private room in a nursing home or a private room in a nursing home). Their resource allocation choices allowed us to examine how their preferences for savings varied based on the type of long-term care setting.

Our analysis of 3,000 survey responses shows that Canadians are highly motivated to save money to be better prepared for long-term care. This willingness to save was much larger when respondents expected to use home care; respondents anticipating home care allocated 38 per cent more resources to savings. This reflects the greater financial needs associated with home care.

Long-term care insurance

We used the results from our survey to calibrate a simulation study — a computer-based experiment using a combination of economic theories and survey evidence — to simulate how households and individuals make financial decisions.

Our simulation study examined two scenarios: one based on the Canadian system, which includes a universal subsidy that lowers nursing home costs, and one based on the U.S. Medicaid system, which features a purely means-tested subsidy that provides free long-term care and ensures a minimum standard of living for those without sufficient income.

Differences in individual preferences for various care settings largely explain the savings disparities. In the Canada-like system, the prospect of receiving long-term care at home substantially boosts savings. On average, individuals planning to use home care saved $25,000 (8.3 per cent) more by the age of 66, compared to those planning to use private nursing home rooms, and $29,000 (9.8 per cent) more compared to those opting for semi-private rooms.

Under the U.S.-like system, the impacts on savings of different care settings were much smaller. This is because, in the absence of public subsidies, the minimum costs of a room in a nursing home are much higher than those of home care. When comparing the savings of individuals opting for home care versus a private room in a nursing home, the difference in savings was almost null.

However, when comparing savings between those opting for home care versus a semi-private room in a nursing home, we found that the former saved 3.7 per cent more.

Policy implications

Assessing how individuals value additional public subsidies for each type of long-term care setting can provide policymakers with valuable insights about how to expand public long-term care insurance effectively.

Our research found that all subsidies are valued well beyond costs, with home care subsidies being more valued than nursing home subsidies. Under the Canada-like system, the average valuation for a home care subsidy was $2.98 per $1 spent, surpassing private ($2.72) and semi-private ($2.35) nursing home subsidies.

Middle-income individuals who aren’t eligible for means-tested programs, but who have limited savings, placed the highest value on these subsidies. This shows that expanding subsidies for home care can be an effective way to protect Canadians from long-term care risks.

The Conversation

Marie-Louise Leroux receives funding from FRQSC and SSHRC-CRSH. She is affiliated with CIRANO (Montreal) and CESifo (Munich).

Franca Glenzer receives funding from SSHRC-CRSH.

Bertrand Achou, Minjoon Lee, and Philippe De Donder do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

ShareTweetSharePin
Next Post
What Canadians need to know about West Nile virus, a mosquito-borne infection that can be life-threatening

What Canadians need to know about West Nile virus, a mosquito-borne infection that can be life-threatening

Most Read

What causes stuttering? A speech pathology researcher explains the science and the misconceptions around this speech disorder

What causes stuttering? A speech pathology researcher explains the science and the misconceptions around this speech disorder

December 15, 2022
morning back pain

Morning Again Ache Trigger Is Not the Mattress

October 11, 2021

Why Circadian Rhythms Matter for Your Health

July 30, 2024
lower back pain relief exercises

5 decrease again ache aid workouts

October 11, 2021

4 steps to building a healthier relationship with your phone

January 28, 2025
3 years after legalization, we have shockingly little information about how it changed cannabis use and health harms

3 years after legalization, we have shockingly little information about how it changed cannabis use and health harms

October 15, 2021
Nasal vaccines promise to stop the COVID-19 virus before it gets to the lungs – an immunologist explains how they work

Nasal vaccines promise to stop the COVID-19 virus before it gets to the lungs – an immunologist explains how they work

December 14, 2022
bleeding in gum

When The Bleeding in gum Is Severe ?

October 11, 2021
Good Night Sleep

6 Causes of Good Evening Sleep

October 11, 2021
Kick up your heels – ballroom dancing offers benefits to the aging brain and could help stave off dementia

Kick up your heels – ballroom dancing offers benefits to the aging brain and could help stave off dementia

January 3, 2023
Biden is getting prostate cancer treatment, but that’s not the best choice for all men − a cancer researcher describes how she helped her father decide

Biden is getting prostate cancer treatment, but that’s not the best choice for all men − a cancer researcher describes how she helped her father decide

May 20, 2025
Ten small changes you can make today to prevent weight gain

Ten small changes you can make today to prevent weight gain

October 12, 2021

COVID vaccines: how one can pace up rollout in poorer international locations

October 5, 2021

This Simple Hygiene Habit Could Cut Your Risk of Stroke, New Research Reveals

February 1, 2025

Multiple sclerosis: the link with earlier infection just got stronger – new study

October 12, 2021
Support and collaboration with health-care providers can help people make health decisions

Support and collaboration with health-care providers can help people make health decisions

December 16, 2021
Greece to make COVID vaccines mandatory for over-60s, but do vaccine mandates work?

Greece to make COVID vaccines mandatory for over-60s, but do vaccine mandates work?

December 1, 2021
Five ways to avoid pain and injury when starting a new exercise regime

Five ways to avoid pain and injury when starting a new exercise regime

December 30, 2022
woman covered with white blanket

Exploring the Impact of Sleep Patterns on Mental Health

August 4, 2024

Maximize Your Performance – Sync with Your Circadian Rhythms

August 9, 2024
Why are some people faster than others? 2 exercise scientists explain the secrets of running speed

Why are some people faster than others? 2 exercise scientists explain the secrets of running speed

April 29, 2024
Backlash to transgender health care isn’t new − but the faulty science used to justify it has changed to meet the times

Backlash to transgender health care isn’t new − but the faulty science used to justify it has changed to meet the times

January 30, 2024
News of war can impact your mental health — here’s how to cope

Binge-eating disorder is more common than many realise, yet it’s rarely discussed – here’s what you need to know

December 2, 2022
As viral infections skyrocket, masks are still a tried-and-true way to help keep yourself and others safe

As viral infections skyrocket, masks are still a tried-and-true way to help keep yourself and others safe

December 14, 2022
GPs don’t give useful weight-loss advice – new study

GPs don’t give useful weight-loss advice – new study

December 16, 2022
Nutrition advice is rife with misinformation − a medical education specialist explains how to tell valid health information from pseudoscience

Nutrition advice is rife with misinformation − a medical education specialist explains how to tell valid health information from pseudoscience

January 28, 2025
FDA limits access to COVID-19 vaccine to older adults and other high-risk groups – a public health expert explains the new rules

FDA limits access to COVID-19 vaccine to older adults and other high-risk groups – a public health expert explains the new rules

May 21, 2025
Four ways to avoid gaining weight over the festive period – but also why you shouldn’t fret about it too much

Four ways to avoid gaining weight over the festive period – but also why you shouldn’t fret about it too much

December 22, 2022
Nurses’ attitudes toward COVID-19 vaccination for their children are highly influenced by partisanship, a new study finds

Nurses’ attitudes toward COVID-19 vaccination for their children are highly influenced by partisanship, a new study finds

December 2, 2022
How hot is too hot for the human body? Our lab found heat + humidity gets dangerous faster than many people realize

How hot is too hot for the human body? Our lab found heat + humidity gets dangerous faster than many people realize

July 6, 2022
  • Home
  • Health & Wellness
  • Disclaimer

© 2020 DAILY HEALTH NEWS

  • Home
  • Health & Wellness
  • Disclaimer
    • Terms of Use
    • Privacy Policy
    • DMCA Notice

© 2020 DAILY HEALTH NEWS