NCPA - National Center for Policy Analysis

The Price of Public Health Care Insurance

October 4, 2012

In Canada, taxpayers are increasingly being asked to pay more for the public health care system.

However, Canadians often misunderstand the true cost of the system because many services are offered free at the point of use. In addition, Canada's health care system is financed through general government revenues so that funding comes from many sources, making it difficult for Canadians to track how much they contribute, say Nadeem Esmail and Milagros Palacios of the Fraser Institute.

In 2012, the estimated average payment for public health care insurance for six common types of Canadian families has increased by:

  • More than 30 percent for two adults with no children.
  • Nearly 26 percent for a family of two parents and one child.
  • Twenty-two percent for a family of two parents and two children.
  • About 35 percent for a single individual.
  • More than 25 percent for a family of one parent and one child.
  • And finally, 21.5 percent for a family of one parent and two children.

Furthermore, the share of income that a Canadian has to pay for health care has also increased relative to the changes in cost of other necessities of life. Since 2002:

  • A Canadian family's income has increased by 37.2 percent.
  • The share of income spent on shelter has increased by 25.4 percent.
  • Similarly, spending on food has increased by 14.6 percent.
  • But health care insurance has increased by 59.8 percent for the average Canadian.

The increase in health insurance spending is disproportional based on an individual's or family's income tax bracket. For instance, 10 percent of families with the lowest incomes will pay an average of $487 for their insurance whereas families in the top 10 percent will pay $32,628. Approximately $3,779 is spent on health care insurance per person in Canada if every resident paid an equal share, which is not the case.

If Canadians had a truer sense of how much they were paying out of pocket, and how much the government dedicated to health spending, then they would be in a better position to decide if they are getting a fair return for their money.

Source: Nadeem Esmail and Milagros Palacios, "The Price of Public Health Care Insurance," Fraser Institute, September 20, 2012.


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