The Price of Public Health Care Insurance in Canada
August 16, 2013
Canadians often misunderstand the true cost of their public health care system. This occurs partly because Canadians do not incur direct expenses for their use of health care and partly because Canadians cannot readily determine the value of their contribution to public health care insurance, say Nadeem Esmail and Milagros Palacios of the Fraser Institute.
In 2013, the estimated average payment for public health care insurance will range from $3,387 to $11,381 for Canadian families, depending on the type of family.
- For the average Canadian family, between 2003 and 2013 the cost of public health care insurance increased more than 1.5 times faster than the cost of shelter and clothing, more than twice as fast as food, and nearly 1.5 times faster than average income.
- The 10 percent of Canadian families with the lowest incomes will pay an average of about $482 for public health care insurance in 2013.
- The 10 percent of Canadian families who earn an average income of $56,596 will pay an average of $5,364 for public health care insurance, while those families that are among the top 10 percent of income earners in Canada will pay about $35,309.
One reason why Canadians don't know the true cost of health care is because physician and hospital services covered by tax-funded health care insurance are free at the point of use. This situation leads many to grossly underestimate the actual cost of the health care delivered. One often hears people speaking of "free" health care in Canada, which is a statement that entirely ignores the substantial taxpayer-funded cost of the health care system.
- For example, health spending numbers are often presented in aggregate, resulting in figures so large they are almost meaningless.
- For instance, approximately $135 billion in Canadian tax dollars were estimated to have been spent on publicly funded health care in 2012.
- It is more informative to measure the cost of the country's health care system in per capita dollars: the $135 billion spent equates to approximately $3,870 per Canadian.
This would be the cost of the public health care insurance plan if every Canadian resident paid an equal share. Canadians certainly do not pay equal tax amounts each year, however. Indeed, some Canadians are children and dependents and are not taxpayers.
Source: Nadeem Esmail and Milagros Palacios, "The Price of Public Health Care Insurance," Fraser Institute, July 2013.
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