Study shows universal system financed by 'substantial taxpayer-funded cost'
By Alistair Burns
The B.C. Catholic
Caption: A new report by the Fraser Institute points out the real cost of public health care in Canada and debunks the myth that the universal system is free. Sxc.hu.
Many foreigners, and even some Canadians, think our universal health care is free. The truth is our taxes pay for the system. Now a new report from the Fraser Institute is casting some light on the real cost.
"One often hears about 'free' health care," the study points out. This statement "entirely ignores the substantial taxpayer-funded cost."
The study, "The Price of Public-Health-Care Insurance," by Nadeem Esmail and Milagros Palacios, puts forth a multi-layered answer to clear up the confusion. They noted we do not incur direct expenses for our use of health care and we cannot specify the value of our individual contribution to public insurance.
"If average Canadian families have a better idea of how much health care costs, they can hold their government better to account," Esmail commented.
There isn't one specific tax; health care is funded through government revenues derived from income tax, employment insurance, Canada pension plan premiums, and even import duties. The authors believe this jumbled hodge-podge of financial support heaps more misunderstanding into the discussion.
Perhaps most distressing for many families over the past decade has been the rising cost of insurance. For the average family, the bill increased "more than twice as fast as the cost of shelter, roughly four times as fast as food, and 1.6 times as fast as average income," the study suggested.
We have "one of the world's more expensive universal systems, and one of the longest wait times compared to other countries" with similar systems, said Esmail.
In 2012, the 10 per cent of families with the lowest incomes (the first decile) will pay an average of $487 for public-health-care insurance. The tenth decile (the top 10 per cent of income earners) will pay $32,628. The fifth decile, who earn an average income of $55,271, will pay an average of $5,285 for public-health-care insurance.
The authors point out that since physician and hospital services covered by tax-funded health-care insurance are free at the point of use, many people misunderstand the actual cost of the services provided.
They corrected another common misconception, explaining that provincial premiums do not cover the total cost of health care.
How Health Care Insurance has increased relative to other costs, 2002-2012
Since 2009, the rate of health-care funding has increased annually by five per cent, according to the B.C. Ministry of Health; although for the next year, the increase is expected to be three per cent.
"Even with this modest growth, (provincial) health care is projected to account for more than 42 per cent of total government spending by 2014-15," explained Ryan Jabs, spokesman for the Ministry of Health.
"We can't just keep pouring more and more dollars in. We have to find creative ways to minimize expenses to keep the system affordable."
The study also revealed total health spending. For example, approximately $130 billion in taxes was spent on public health-care services in 2011.
That equates to $3,779 per taxpayer, if everyone paid an equal share. But everyone does not pay the same rate, and "since children and dependents are not taxpayers, the higher-income earners bear a greater proportion," the study clarified.
Provincially, the B.C. Ministry for Health reports that their per-capita spending on health care is the second lowest among the provinces.
"B.C. has the nation's highest life expectancy, the lowest death rate from cancer, and the second-lowest death rate from heart disease," Jabs claimed.
Ultimately a country-wide lack of understanding "limits the ability to assess (whether one is) receiving value for their tax dollars," the study concluded.