The Parkland Institute

Healthcare

User fees contradict purpose of Medicare

In Alberta and BC, monthly health-care fees create barriers for low-income people

Like Albertans, but unlike most Canadians, British Columbians pay premiums for health care. Since health care is something that everyone uses, let’s call premiums what they really are: user fees on Medicare.

There is a tantalizing logic behind user fees on Medicare. Since everyone requires health care at some point, everyone should have to chip in to help pay for it. And what could be more egalitarian than asking everyone to pay the same amount (in BC, $54 a month or $648 a year)? After all, in the doctor’s office we are all equal. There are no barriers of race, education or class that sickness cannot cross. If we all use health care equally, why shouldn’t we have to pay for it equally?

This kind of logic, tempting as it is, is dangerous for society. The whole point of a community is for people to get together to help each other out, and the socialization of medical care should follow this principle.

The idea here is that those who can afford to pay for health care should pay for those who can’t, because that’s how we build a healthy society. When we impose user fees on Medicare, individuals become responsible for their own health, rather than society bearing the responsibility for them. And some individuals are less able to pay for their own health than others.

Under B.C.’s current user fee system, a family of five with a net income of $28,001 pays $1,296 a year - or 5 per cent of their net income - on health-care premiums. While the B.C. Ministry of Health does provide exemptions for lower-income individuals and families, these exemptions only cover the lowest income levels and are only effective for a small portion of society. $28,001 is by no means an extravagant income for a family of five in this province. According to Statistics Canada, the national median family income for Canada is around $67,000 a year. In other words, the B.C. Ministry of Health requires a family in the lower quarter of all income earners to pay full premiums for access to health care. This is money they would likely rather spend on food or clothing.

Even for a family at the national median income of $67,000, $1,296 is still a lot of money. It could mean maintenance on a car that a parent depends on to get to work. It could mean after school programming (like hockey equipment, piano lessons, or math tutoring) for children. It could mean air fare to visit family in Toronto for the holidays. Why should any family be forced to choose between the things that can provide a fulfilling and nurturing household, and a necessity of life like health care coverage?

A quarter of all of the income earned in Canada goes to the top 5 per cent of income earners. A family in this income bracket will earn at least $154,000 a year. For this wealthy family, $1,296 a year will mean the cost of gas for an expensive and fuel-inefficient SUV. For this family, $1,296 is the price of a resort vacation (for each family member) in the Dominican Republic. Health-care premiums are hardly a financial burden.

What’s more, federal and provincial tax rates have become more lenient for the highest income earners over the past 15 years. This means that the wealthiest families now have more disposable income than they used to, while low- and medium- income families must make do with the same amount as before. It also means that higher-income earners are now paying a smaller portion of the government’s tax revenue than they used to. If the government continues to cut taxes for the wealthy, it will have no choice but to charge user fees in order to finance public services like the health-care system.

Health care is something that we will all need at some point in our lives. In Canada, we have a socialized Medicare system in which no one is denied access because of ability to pay, and we are by and large proud of this system and what it means for our society. Imposing user fees on Medicare undermines the benefits of socialized health care, because we are asking low- and medium-income families to pay the same costly sums for Medicare as wealthy families do. This, if I may be so bold to say so, is anti-Canadian.

Instead of user fees, we should pay for Medicare out of a progressive income tax system, in which wealthier Canadians pay a higher rate than poorer Canadians. It should be provided by those who can afford it for those who can’t.

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