What are your plans for covering long-term care costs? Do you really need insurance? Here’s what the data says for Canadians

One of the most pressing — and most overlooked — is this: Who pays for your care if you can no longer look after yourself?

The honest answer may surprise you.

Financial blind spot

Many Canadians underestimate the risk of needing long-term care for two reasons.

The first is cost. According to the Canadian Medical Association, the combined annual cost of long-term care (LTC) and home care in Canada is expected to reach $58.5 billion by 2031 — nearly double the 2019 level of $29.7 billion (2). At the individual level, costs vary widely by province, but the numbers are sobering: in Ontario, as of July 1, 2024, a basic room in a government-licensed LTC home runs $2,036.40 monthly, while a semi-private room costs $2,455.24 and a private room costs $2,909.36 (3). In Nova Scotia, standard accommodation charges reached $114 a day as of March 1, 2026 (4). Private retirement homes — which aren't covered by provincial subsidies — can run from $1,500 to $8,000 a month (4).

Those numbers compound over time. If you require private care accommodation at $48,000 a year for three years — a realistic scenario, given that the average LTC stay in Canada is roughly 18 months to four years — you're looking at $144,000 or more in out-of-pocket costs (5).

While Canada's publicly subsidized system offsets some of that burden, it doesn't cover it entirely.

The myth of 'free' long-term care in Canada

This brings us to the second reason Canadians are caught off guard: they assume their provincial health plan will cover them for long-term care.

It won't — at least not entirely. And this is the most dangerous financial error in retirement planning.

While Canada's universal health care system covers medically necessary hospital and physician services, long-term care isn't included as an insured health service under the Canada Health Act (6).

The reality is that provinces do subsidize a significant portion of LTC costs. According to a 2023 working paper cited by the Library of Parliament's HillNotes research service, approximately 78.4% of LTC home costs in Canada are covered by provincial, territorial and municipal plans — but that leaves the remaining 21.6% paid by residents out of pocket or through private insurance (7). And the subsidies in many provinces are income-based, meaning the more assets and income you have, the more you pay.

For Canadians who require care in a private retirement home or need home care services not covered by their provincial plan, the gap can be substantial. Private home care in Canada runs between $10 and $85 an hour depending on the province and the type of care required (8).

Most alarmingly, nearly 74% of Canadians have no financial plan to cover long-term care costs, according to a Leger Marketing survey commissioned by the Canadian Life and Health Insurance Association (CLHIA), an industry group representing 99% of Canada's life and health insurers (9). Meanwhile, fewer than 2% of Canadians hold an LTC insurance policy (10).

The disconnect between the likelihood of needing care and the lack of preparation for it could be one of the biggest financial mistakes Canadians make in retirement.

What is long-term care insurance?

As the name suggests, long-term care insurance helps pay for the everyday support you may need as you age — like nursing care, assistance with bathing and dressing, meal preparation and household tasks — or if you become unable to care for yourself at all (11).

To qualify for benefits, policyholders typically need to demonstrate they can't perform at least two of six "activities of daily living" (ADLs) — such as bathing, dressing or eating — without substantial assistance, or that they have a cognitive impairment requiring supervision (12).