Canadian families pay up to $12K annually for 'free' healthcare, right-wing think tank finds

The public health care system is a source of pride for a majority of Canadians, but a new study from the Vancouver-based Fraser Institute has found that individuals and families aren’t fully appreciating the cost they pay out of their own pockets to access that system.

In a research bulletin released Thursday, the conservative think tank said Canadians need to better understand how much health care actually costs them personally so they can determine whether they are receiving good value for their tax dollars.

The research found that in 2015, for six common Canadian family types, the estimate average payment ranges from $3,789 to $12,055.

For the average Canadian family over the ten years starting in 2005, the cost of public health care insurance increased 1.6 times faster than average income, 1.3 times as fast as the cost of shelter and 2.7 times as fast as the price they were paying for food.

Nearly three quarters of Canadians polled in a recent Ipsos Reid survey says that the health care system is among the best in the developed world. Yet two out of three of those polled say they still worry that the health care system is falling behind. Efficiency of the health care system was a concern. Nearly nine in ten polled believe that if the health care system spent money more efficiently, it would provide better care and half of those say they don’t care how the money is spent as long as the quality of care is high.

Even Donald Trump, the bombastic, front-runner in the field of Republicans to run for presidential candidate in the U.S. election, has praised Canada’s Medicare system saying “I’m a conservative on most issues but a liberal on this one. We should not hear so many stories of families ruined by healthcare expenses.

In British Columbia, where residents pay monthly premiums for their provincial insurance coverage, the province’s Medical Services Plan premium rates rose four per cent over the last year, driven by rising costs in health care and part of a trend in premium increases.

That means for individuals, the $66.50 they paid in 2013 per month now costs them $72. Couples went from paying $120 in 2013 to $130.50 now and families of three now pay $144 every month in premiums. Two years ago, they paid $133 per month.

Those increases have led the province’s Green Party MLA Andrew Weaver to push for changes saying MSP premiums have doubled in the past 15 years. Those premiums now bring in as much money to the province’s coffers as corporate income tax.

Weaver has suggested that it’s a more fair process to move to an income tax-based system. Currently people making $30,000 a year pay as much for the MSP premiums as someone making $300,000 annually.

The Fraser Institute study found that 10 per cent of Canadian families who pay the lowest income still pay an average of about $477 for their public health care insurance in 2015. The 10 per cent of Canadian families who earn an average income of just under $60,000 pay an average of almost ten per cent of that income or $5,684 for their public health care insurance. The country’s top 10 per cent of income earners pay $37,180.

The Fraser Institute based its findings on the conclusion that the true cost of public health care has been blurred by the financing of the system through general government revenues rather than through a dedicated tax.

Because of that, Canadians are unable to work out precisely what they pay to government each year for health care because different sources of government revenues go into funding the system. That includes income taxes, Employment Insurance (EI), Canada Pension Plan (CPP) premiums and other sales and consumption taxes like property taxes, import duties and the government’s tax on alcohol and tobacco.

“Some Canadians might assume that, in those provinces that assess them, health care premiums cover the cost of health care,” the research bulletin states. “However, the reality is that these premiums cover just a fraction of the cost of health care and are paid into general revenues from which health care is funded.”

The Fraser Institute has long advocated that health care costs in Canada are rising to financial unsustainable levels and that the private care system may be an option.