July 19, 1996
(Health)

Health minister announces new rates for nursing homes

Government will implement a new rate structure for residents of long term care following a review of the current policy, Health Minister Lloyd Matthews announced today. "The review of the policy was intended to ensure that a fair and equitable rate structure exists for residents of nursing homes," said the minister.

The rate for nursing home care will now be set at an amount up to $2,800 per month. This figure represents approximately 70 per cent of the $4,000 cost of providing nursing home care. A universal rate for long term care was first established in 1984 at $1,400 per month, or approximately 70 per cent of the full cost. The new rate recognizes inflationary increases in long term care facilities over the past 12 years. Taking into account inflationary costs, a rate of up to $2,800 per month is comparable to the rate set in 1984. In 1986, a rate of $1,510 per month was set and that rate has not been adjusted since. The new rate will be adjusted annually for inflationary costs.

In addition to that change, the minister also announced that the Department of Health would be implementing a change in policy for couples where one spouse resides in a nursing home and the other retains a residence in the community. In such cases, the liquid assets will be equally divided between the spouses so that the individual living in the community need not expend the majority of savings for nursing home care and can therefore retain sufficient resources to remain at home.

"We want to ensure that people make a reasonable contribution toward the cost of their care provided they have the means," said the minister. "We have a tremendous challenge ahead of us in terms of an aging population. Currently, there are approximately 58,000 seniors in the province, but in the next 15 years, there will be some 88,000 senior citizens. If we want to ensure that health programs and services are accessible to this aging population, then we must make some adjustments to our long term care program now."

The rate change is effective from July 1, 1996. Those who have already paid an amount beyond that will be adjusted accordingly. The minister added the policy change is fair and reasonable. "Those who have some ability to pay for nursing home care either through pensionable income, RRSPs and RRIFs as well as savings, should be required to make a contribution. Otherwise, the ability of government to offer a long term care program in future is seriously threatened."

Mr. Matthews also stressed that this new rate was effective ONLY for those who have sufficient resources to pay the $2,800 per month. "If a financial assessment determines an individual incapable of paying the full amount, then some portion of the $2,800, depending upon the individual's financial ability, will be applied. As well, all personal and tangible properties such as a home are NOT included as part of the financial assessment and all nursing home residents may retain them."

The minister said he is confident this policy is a fair one that will satisfy seniors as well as other taxpayers of the province.

Contact: Jill Sooley, Department of Health, (709) 729-1377

FACT SHEET

• A universal rate for nursing home care was first introduced in 1984 at $1,400 per month. It represented 70 per cent of the full cost of providing care.
• A rate of $1,510 was set in 1986. The rate has not been adjusted for inflationary costs since that time. Currently, the average cost of nursing home care is $4,000 per month.
• $2,800 per month represents approximately 70 per cent of the full cost of providing nursing home care. This rate is comparable to that set in 1984 when inflationary costs are factored in.
• The senior population is currently estimated at 55,000. In the next 15 years, it will grow to an estimated 88,000. With the increasing demand for long term care, adjustments must be made to ensure long term care services remain accessible in the future.
• Financial contributions to long term care are not a violation of the Canada Health Act which covers physician services and hospital services.
• Payment of the full rate is applied only to those with sufficient resources. Residents who do not have the capability to pay the full amount will pay a portion based on a financial assessment. No one will be denied access to care if they can not afford the full rate.
• Financial assessments do NOT include personal or tangible properties such as homes, vehicles or other personal property.
• Each individual may retain $5,000 in cash savings; each couple $10,000.
• If one spouse is in a nursing home and the other resides in the community, liquid assets are divided equally.
• Government expends approximately $154 million in providing nursing home care. If changes are not made to reflect increasing costs and an aging population, our ability to deliver long term care to all in need in the future is seriously threatened.