The costs of elder care in Canada

The costs of elder care in Canada

Saving and investing to start retirement is one thing. Aging in place and being able to afford is something else.

We often discuss how to save and invest (including those subjects on this site), but financial planning is much more than accumulating assets.

I suspect all of us wish to age gracefully but it’s very unlikely we all will. Millions of us will need to plan ahead, way ahead, in an increasingly complex and under-funded healthcare system.

I’ve often wondered what the costs of elder care are in Canada, and what we should be planning for. I have some ideas of course but like most things that are complex, it’s great to ask-an-expert.

The costs of elder care in Canada are high

Wendy Johnstone, owner and operator of Keystone Eldercare Solutions (no affiliation), reached out to me a few months back to discuss this important subject on my site.

I thought it would be worthwhile. Read on for our discussion.

Wendy, welcome to the site!

Mark, thanks very much for having me and a pleasure to talk about this very important, and under-discussed subject.

I agree!

Wendy, I provided a very brief introduction above but wondering if you could expand on that – share some details about you, your qualifications, background and work you do every day?

Sure thing, Mark….and thanks for having me on your blog. I’m an Eldercare Expert, Gerontologist and Caregiver Coach.

My dad had a stroke over 15 years ago. Despite being a Gerontologist (with a Master’s Degree) with health care navigation skills, I wasn’t emotionally or physically prepared for the transition and decisions ahead. The next month was like a rollercoaster as my family and I struggled with the many difficult decisions that had to be made for the future care of Dad, the most painful one being taking him off life support.

Through my own experience, it became clear that when faced with an eldercare crisis and extreme emotional pressure, family caregivers and seniors don’t know where to turn. Or what to ask. Or how to get through the system. It’s how our business was born.

I’ve been now helping seniors and their families for 20 years to make informed decisions and to make a plan while they navigate the transitions associated with the aging process.

I am also a passionate writer and seniors’ and family caregiver’s advocate and educator. While we can’t prevent aging and loss, we can learn more about how to maintain independence, purpose and meaning during aging. I also want to help family caregivers to better know what to expect, how to navigate the health care and social systems and how to handle the many challenges (and losses) that come with caring for their aging loved ones.

Thanks very much. Let’s jump right in. What are the average costs of elder care these days? What should Canadian retirees be expecting?

Unfortunately, the scope of caring and the costs for family caregivers (financial, emotional, physically, etc.) haven’t been extensively researched up until the last few years so the data is very limited.

Also, everyone ages differently and many factors influence what services and supports a senior will need as they are faced with age-related changes. For example, one older adult may be living at home with dementia and need services such as check-ins, transportation, meal preparation while a different senior facing chronic illness and mobility challenges may be more dependent on personal care services. I think this is a very important concept to understand – the better you know what you might need or what the person you are caring for needs, the better you can estimate and plan for future costs. Statistically speaking, “72% of seniors aged 85 or older living in the community have high complexity (40%) or medium complexity (33%) chronic conditions” (Office of the Seniors Advocate, BC. 2019, p.3).[1] In other words, you can expect to start paying for services when you are no longer able to live independently without the help from others.

How much eldercare services cost also depends on what services seniors are eligible for through publicly funded sources. Caregivers also take on the brunt of the care responsibilities for their aging loved ones – up to 75% of all care needed is done by unpaid family or friend caregivers[2] and generally, that is either adult children or spouses doing the caregiving. Living close to the person you are caring for generally means the costs of care are lower. But if you are caring from afar or if you are aging and don’t have family nearby, you can expect to incur more costs associated with support and care[3].

I know what you are thinking, “Why is she evading the question?” It’s hard to give an answer without providing context, especially when it comes to eldercare and caregiving. The range I suggest (all based the 300+clients I’ve served) is $1500 to $4000 per month for eldercare costs, which includes everything from personal care, companionship, home maintenance (external and internal), personal response systems, home and personal adaptation accessories and transportation. The lower end of the range is for individuals with lighter needs (and likely a family caregiver nearby or a couple where one is caring for the other) and the higher end is for more complex needs and/or frailer seniors living alone. There are some seniors and their families that decide to pay for 24-hour care, but those individuals are more the exception, and it is incredibly costly. It’s often not a sustainable model for a long term solution.

Those are high, standard costs, up to $4,000 per month to be budgeting for. Do you see those costs going higher? Why? Why not?

Costs may generally be affected by inflation and cost of living increases, but I think the real issue could be the recent research showing Canadians are increasingly worried about not having adequate financial resources or retirement funds for their senior housing and health care needs[4]. Did you know that 30% of working-age Canadian have no retirement savings and 20% of them have less than $50,000 saved[5]. A recent Seniors Advocate of BC report showed that most seniors with an income of $28,000 can’t afford publicly funded home support. I think it’s less about higher costs and more about planning for having to pay for services to “age at home”.

(Mark to readers: references are linked at the end of this post for further reading.)

Wendy, what should Canadians consider when it comes to elder care? For example, costs associated with personal living assistance vs. full-on retirement home care. Other hidden costs that we simply don’t think about?

I realize this blog is directed at those planning for semi-retirement or retirement like you are, Mark, however, one of the hidden costs we often don’t think about is: supporting our aging loved one’s financial needs. In a recent survey, 47% of Canadians aged 45 years and older said they do not have adequate financial resources to help cover living expenses for their aging loved ones in the next five to ten years (p. 9)[6].

If seniors do need home care costs, they really need to expect to pay out of pocket. Only a little over half of seniors have their home care costs covered solely by the government.[7] And that’s just home care. There are many other areas that seniors need help with that are covered by our home and community heath care systems.

If you are a senior who doesn’t have a family member to care for you locally, you can expect that your costs will be higher. As mentioned above, 75% of all care needed to age in place is done by unpaid family or friend caregivers.

Great information. Is there any insurance coverage that can help Canadians as they age? If so, what ones? What should folks consider such insurance?

Every province is a bit different regarding what their provincial health care plans cover but it’s generally most essential services. These include doctor’s visits and acute services including Emergency Room (although transportation to the hospital often isn’t), hospital stays, hospital dental surgery, etc. However, the provincial plans generally don’t cover services such as dental, prescriptions (only partial), medical equipment and adaptive equipment and other health care services such as physiotherapy, chiropractic, etc.

Some seniors we work with have opted to have long term care insurance. Long term care insurance can cover some of the costs of a care facility or a paid caregiver. Generally, to qualify for benefits, the individual must not be able to perform two or more instrumental activities of daily living (IADLs) such as bathing, dressing or eating. A good overview of Long Term Care insurance can be found here.

Others who don’t carry any extended health insurance plans into retirement may decide to continue paying for private health insurance; it can offer a good tax benefit and peace of mind. Travel health insurance is always advised. A great article to read more about insurance in retirement can be found via The Globe and Mail (subscribers only).

Let’s talk about the ability to be mobile. What about transportation to and from appointments or just getting around for day-to-day living? What cost should be considered if you “stay in place” and what transportation factors should super seniors need to consider?

Not being able to drive or walk has a profound impact on independence and well-being. Generally, seniors have some options for transportation. In my experience, the most difficult adjustment is being flexible as most of these options require planning in advance.

• 84% of family and friend caregiver provide support such as transportation[8] which of course costs very little financially. However, the hidden “costs” are the impact on the person providing care. There are some volunteer driver programs too that one can investigate in their communities.
• For some seniors, there is a public transit system designed for seniors who can no longer drive. Here in BC, it’s called HandyDART. It’s not always convenient but it’s affordable – under $6 per roundtrip. There are also publicly funded taxi saver programs which cost seniors half of the regular fare.
• Transportation companies such as companionship services can charge up to $60 per hour with additional costs for mileage. One way to start estimating costs is listing out your trips each month (social, medical, errands, etc) to gauge the number of trips needed per month in the future.
• Scooters and other motorized options could work for some seniors who aren’t able to drive.

If you want to really explore more on the topic – check out Liveable Community Options for Seniors.

Costs to consider to “stay in place” vary by senior. Needs as we age aren’t homogeneous but there are some areas to start. Knowing your fixed costs of living at home and your incoming income are a good place to start! Other areas to consider are gathering intel on costs of transportation, exterior and interior home maintenance, meal preparation, companionship services, assistance with errands, personal safety devices, home adaptation cost, adaptive living accessories and home support needs. I’ve developed an “Aging in Place Checklist” which readers can download if they sign up for my enews.

Wendy, so much ground, as we haven’t even covered how to manage any financial risks as cognitive ability declines for individuals or couples. More to share and think about….  As we wrap, what takeaways do you want to share with Canadians on this important subject?

I’ll put those important points into some bullets, Mark:

• Too many Canadians underestimate their longevity and the costs of care. Budget for an expectation to live to 90 and expect to pay out of pocket for most of your care needs.
• Know the signs of when you or someone needs more help. It’s good to know what normal aging looks like and when you need to be concerned.
• It’s easier said than done – but expect that you’ll need help as you age. We all do. It’s nothing personal, it’s nothing to be ashamed of and it isn’t a judgement of your capacity. Seniors and families who focus on their strengths (especially when faced with age-related changed and losses) and look for ways to supplement their deficits often feel more positive and resilient.
• Get Your Eldercare Affairs in Order or any related publication – which means getting your financial, legal and health care representatives in place as well as having conversations about future care now versus when it’s too late.
• Become informed about housing options for seniors including long term care facilities (nursing homes). Many seniors think when they need 24-hour care, it will be available and provided. We are in a major long term care crisis and shortage and some seniors are having to sell their homes to pay for long term care until a subsidized bed is available. Some seniors or their families are paying privately for 12 months which is anywhere from $7000 to $10,000 a month. It can be considerable.
• Consider shifting your perspective of aging from negative to a natural part of life. In many countries, such as Africa, Japan and Greece, elders are revered, respected and responsible to pass on wisdom and life experiences with younger generations. In more Westernized cultures, we are bombarded with anti-aging solutions to fight the decline of beauty and strength. Consequently, we tend to view aging as a skeleton in the closet – something we are ashamed of or really don’t want to think or talk about. William Thomas is a Gerontologist and author of the book, “What are Old People For: How Elders Will Save the World.” He challenges his readers to re-wire their thinking and see the presence of elders as an essential component in completing our vision of society. A common thread through his book is to see elders offering warmth, wisdom and stewardship to communities and society.
• If you have aging parents, expect to care for them. It’s not a matter of if, it’s a matter of when. There are some exceptional provincial organizations dedicated to support family caregivers in Canada including, Family Caregivers of BC, Caregivers Alberta, Abilities Manitoba, Ontario Caregiver Organization and Caregivers Nova Scotia.

Wendy, awesome. Thanks for this and I look forward to continuing the discussion on this subject and related subject matter areas over time.

Folks, Wendy is ready to answer any questions in the comments section.

No affiliation, simply food for thought. Thanks again for reading and sharing. I hope this post helped you or your loved ones out.

Mark

Further Reading and government references:

https://www.canada.ca/en/employment-social-development/campaigns/seniors.html

Image: courtesy of Pexels and Andrea Piacquadio.

Wendy’s References:

[1] Office of the Seniors Advocate BC. Home Support: We Can Do Better. 2019. https://www.seniorsadvocatebc.ca/app/uploads/sites/4/2019/06/Report-Home-Support-Review_web.pdf

[2] Circle of Care: Supporting Family Caregivers in BC. A Policy Paper by BC’s Doctors. October 2016. https://www.doctorsofbc.ca/policy-papers/circle-care-supporting-family-caregivers-bc

[3] Balancing Paid Work and Caregiving Responsibilities: A Closer Look at Family Caregivers  in Canada (2009) and is available at https://www.caregiversns.org/images/uploads/all/working_caregivers_EN.pdf

[4] Iciaszczyk, N., Feil, C., MacDonald, B.J., Nicin, M., Sinha, S. (2021). Canadian Perspectives on the Financial Realities of Ageing in Place: Practical Considerations, Strategies & the Need for Policy Reform. Toronto, ON: National Institute on Ageing, Ryerson University and HomeEquity Bank.

[5] CIBC (2018). Am I saving enough to retire? Vast majority of Canadians just don’t know: CIBC poll. Found at: https://www.newswire.ca/news-releases/am-i-saving-enough-to-retire-vast-majority-of-canadians-just-dont-know-cibc-poll-673311343.html

[6] Iciaszczyk, N., Feil, C., MacDonald, B.J., Nicin, M., Sinha, S. (2021). Canadian Perspectives on the Financial Realities of Ageing in Place: Practical Considerations, Strategies & the Need for Policy Reform. Toronto, ON: National Institute on Ageing, Ryerson University and HomeEquity Bank.

[7] Statistics Canada. (2018). Formal Home Care Use in Canada. Retrieved from: https://www150.statcan.gc.ca/n1/pub/82- 003-x/2018009/article/00001-eng.htm

[8] Caregivers in Canada (2018). Can be downloaded at https://www150.statcan.gc.ca/n1/en/daily-quotidien/200108/dq200108a-eng.pdf?st=_3x8vdG1