January 9, 2003

Up to $148 a Month Incentive to Move!

When most politicians and many reporters were taking a few days off, government issued a news release to announce that "assisted living residents will pay no more than 70 per cent of their after-tax income". The lowest income seniors now pay 85% of their after tax income as their fee in publicly funded extended care. The difference amounts to an incentive of up to $148 per month for some low income seniors to move out of extended care and into "assisted living".

The top page of the government website usually has only the Premier's photo, but for over a week Katherine Whittred's photo accompanied the January 2nd news release on "low income senior housing options".

The news release says:

In the New Era Document, Gordon Campbell promised to "Work with non-profit societies to build and operate an additional 5,000 new intermediate and long term care beds by 2006." That promise was understood by many people to mean 5,000 more residential care beds as opposed to an "independent living" alternative for intermediate care.

"Personal care, intermediate care (levels I, II & III), and long term care" are terms used to describe different levels of professional support that are required by someone who can no longer completely look after themselves - usually "higher level of care" means more nursing time. "Assisted living" was once considered equivalent to intermediate care level II but it has come to mean a model in which the level of care is tailored to the individual rather than fitting an individual into a categorized institution.

BC's transition in community care, a term used to capture all degrees of care, began in 1999 when then Health Minister Penny Priddy received the report of the steering committee reviewing community care (pdf). In January 2001 the Ministry of Health produced a document titled "Requirements for Continuing Care Renewal Plans" (pdf). It stated "The renewal initiative consists of a shift in service provision towards - and more funding for - home-based services and supportive-living options." Its draft performance indicators showed the desire to decrease the number of residential beds per 1,000 population while increasing home support although it acknowledged that the actual number of residential care beds would have to increase. On April 22, 2002, Katherine Whittred announced the Campbell government's approach to community care at a staged cabinet meeting. Chaos has reined ever since, but the contradictory statements were most evident for several days after the April 22nd announcement. Government could not get its story straight on how many beds it was going to add according to its New Era promise, and there was confussion as to whether the "assisted living" beds were part of its original promise.

For many people, social housing can cost more than the user fees in intermediate or long term residential care, Whittred's news release declared "People currently in care facilities who are invited to transfer to new assisted living units will pay the same rate as if they lived in residential care, unless the assisted living rate is lower. No one will pay more because of a transfer to an assisted living unit." In other words, people who are kicked out ("invited to transfer") of residential care may have less service but will not have to pay more, and the lowest income seniors will pay less.

It is not easy to find the user fee that is charged for public intermediate or long term residential care facilities anywhere on a government website. Notwithstanding the Campbell government's commitment to "e-government", if you want information on fees charged in community care facilities, most people have to phone their local public health office. The Ministry of Health Planning has a website at http://www.healthplanning.gov.bc.ca/ccf/adult/index.html which offers a guidebook on how to choose a facility or home. It warns to ask about price. The Ministry of Health Services' website at http://www.healthservices.gov.bc.ca/hcc/ offers an incomplete policy document on payment to family members but nothing on residential care rates. The BC Housing website provides a page at http://www.bchousing.org/Supp_Liv/ on "supportive living" or "independent living".

The fee in government operated extended care hospitals (intermediate and long term care providers) can be found in Section 8 of the Hospital Insurance Act Regulations (it depends on the definition of "remaining annual income" in Section 1). For a single person with an after tax income over $40,000 per year, the fee is $50 per day. For singles with after tax incomes over $17,284 per year but less than $19,284, it is $27.20 per day. People with "remaining adjusted incomes under $7,000", are charged 85% of their OAS and guaranteed income supplement income ($27.10 per day). To get "remaining adjusted income" subtract $10,284 for a single, $16,752 for a couple, then subtract income tax.

As of January 2003, the maximum OAS rate is $453.36 per month. The maximum GIS rate is $538.80 for a single person; 85% of $992.16 is $843.34, so the per day charge will increase to $27.73. That is the extended care rate that applies to singles with less than $17,284 in after tax income.

Since Whittred's new "assisted living" rate is 70% of income, singles with income under $14,460 per year will have some financial incentive to move (70% of $1,205 * 12 = $843.34 *12 = $14,460). The extended care rate is the same for everyone with "remaining annual incomes" under $7,000; approximately $17,284 after tax. Single seniors who qualify for the full Old Age Security and Guaranteed Income supplement have an annual income of $11,906. Their maximum financial incentive to move is approximately $148 per month ($843.34 - 70%*$11,906/12 = $148.83).

Whittred's news release offered the example of someone with an annual income of $12,240. Using the Hospital Insurance Act definition of "remaining income" so as to determine the extended care hospital fee, $12,240 reduces to zero "remaining income". According to the hospital regulation, that person would pay 85% of their combined OAS and GIS. Whittred's release said that the person in her $12,240 a year example would pay "a monthly rate of $714, compared with rates of $1,500 to $5,000 for private facilities". She didn't say how the person in her example compared if she had been placed in a public extended care hospital but we can calculate it for her. In Whittred's example, the person would have an incentive of approximately $130 a month to move.

There is one small problem with Whittred's scheme. Long term care assessors report that there are very few people in intermediate or long term care whose care requirements would let them be placed in "assisted living". Financial incentives should not be used to move people into facilities that provide less care than they need. Let's hope that financial incentives do not encourage those seniors who have not yet "been placed" to accept "assisted living" if they really need residential care.