In 2011, 7.1% of all seniors in Canada lived in a collective dwelling that focused on special care, and this percentage increases with age. Only 1% of seniors aged 65–69 lived in extended care homes, while nearly 30% of seniors 85 years and older lived in one.1
These extended care facilities don’t come cheap, either. Paying for extended care or long-term care is one of those “hidden” retirement expenses, and it is important to plan for as you consider your retirement income planning. Let’s look at the differences between extended care in the United States versus Canada and why retirees in both countries should consider purchasing long-term health protection.
What is Extended Care?
Before we look at the differences between the United States and Canada regarding extended care, let’s define what this care is.
According to the Canadian Association for Long-Term Care, long-term care (LTC, or extended care) is provided for “people with complex needs who are unable to remain at home or in supportive living.” Long-term care homes offer on-site 24-hour nursing care and assistance with daily activities, such as eating, bathing, and going to the toilet. The home also monitors residents for safety and well-being.
Extended Care in the United States
The US has long been criticized for its lack of comprehensive care for seniors, especially compared to other countries.
A study by Health Affairs showed that 23% of older adults in the United States said that in the past year, they had not visited a doctor when they were sick, had skipped a recommended medical test or treatment, had not filled a prescription, or had skipped doses because of cost. In contrast, only 5% or fewer of older adults in France, Norway, Sweden, and the United Kingdom reported these cost barriers. These figures represent overall medical care for older adults and don’t include statistics about long-term care.2,3
When it comes to long-term care, Americans find themselves in a tough spot. While many older adults rely on Medicare, it doesn’t cover assisted care services in most cases. Medicare Part A covers inpatient hospital care, some home health services, and limited nursing home services. Medicare Part B covers physician services, lab work, outpatient services, and home health services. Because of this, most Americans who opt for long-term care need to pay for private insurance and knowing that more than 800,000 people in the US live in assisted care facilities, this extended coverage is a smart decision.4,5
On average, a private room costs $8,365 per month at a nursing home.4
Extended Care in Canada
In the United States, the government covers some healthcare costs for seniors, but not everything. The main difference is that Canada’s healthcare system is funded through federal and provincial taxes, and the national healthcare system averages about 70% coverage. In Canada, all long-term care homes are licensed, approved, and funded by the Ministry of Health and Long-Term Care and governed by the Long-Term Care Homes Act, 2007 (LTCHA).4
To cover expenses that aren’t included in that 70% coverage, many Canadians purchase private insurance to make up the difference. For example, the Canadian healthcare system does not cover vision and dental care, private hospital rooms, prescription drugs, rehabilitation services, or home care. This includes some extended care costs. Private retirement homes in Canada can cost up to $5,000 per month, as a base rate, with additional services like bathing or doctor visits costing more.4
Why Consider Extended Care
No matter where you live, considering extended or long-term care is a good way to protect against expensive healthcare bills as you age. In Canada, the average life expectancy is nearly 83 years old, meaning that many people will need extended care. Protect yourself and your loved ones by ensuring you have the right healthcare coverage for your needs.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.