The Price of Public Health Care Insurance in Canada
November 8, 2011
Canadians often misunderstand the true cost of their public health care system. This is partly because physician and hospital services covered by public health care insurance are free at the point of use, which leads many to grossly underestimate the actual cost of the care delivered. Furthermore, health care is financed through general government revenues rather than through a dedicated tax, which blurs further the true dollar cost of the service. So often, the bill for this type of program is presented aggregately, with the final number being so large that it no longer means anything to anyone in terms of his or her personal costs, say Milagros Palacios and Nadeem Esmail of the Fraser Institute.
In order to more precisely estimate the cost of public health care insurance for the average Canadian family in 2011, Palacios and Esmail determine how much tax an average family pays to all levels of government. The percentage of the family's total tax bill that pays for public health insurance is then assumed to match the share of total government tax revenues (income) spent on health care -- estimated to be 24.9 percent in 2010-2011.
- In 2011, the average unattached (single) individual, earning a little less than $37,000, will pay approximately $3,607 for public health care insurance.
- An average Canadian family consisting of two adults and two children (earning a little more than $105,700) will pay about $10,486 for public health care insurance.
With a more precise estimate of what they really pay, Canadians will be in a better position to decide whether they are getting a good return on the money they spend on health care.
Source: Milagros Palacios and Nadeem Esmail, "How Much Do We Really Pay: The Price of Public Health Care Insurance," Fraser Institute, November/December, 2011.
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