Canadians getting to grips with the cost of ?free? health care

July 31, 2012

Free Market Foundation

(“Free” means you pay in a different way)

Canadians are blissfully unaware of the true cost of their health care system. At the point of use, consumption is free, financed from general government revenues rather than through a dedicated tax. Also, because the numbers are presented as aggregate, Canadians often misunderstand the true cost. However, it is becoming critically important that they learn the facts, says the Fraser Institute.

Thus, a more informative measure like a per capita basis is needed to find a more precise estimate for the cost of Medicare, says Fraser. In Canadian dollars:

The percentage of the family’s total tax bill that goes for public health insurance equalled 22.8 per cent in 2004-2005.

In 2005, the average single individual (earning slightly more than $27,900) will pay $2,600 for public health care insurance while an average family with two parents and two children will pay more than $9,100.

At each income level, an estimated 10 per cent of families with the lowest incomes will pay an average of $305 for insurance; 10 per cent who fall into the fifth decile (earning an average income of $57,000) will pay an average of $4,650 for insurance; and the top 10 per cent will pay a little more than $26,000 per family in 2005.

With a more precise estimate of what they really pay, Canadians will be in a better position to decide if they are getting good value for the money they spend, says Fraser.

Source: Niels Veldhuis and Nadeem Esmail, The Price of Public Health Insurance in Canada, Fraser Institute, October 2005.

For text: http://www.fraserinstitute.ca/admin/books/chapterfiles/Oct05ffEsmail.pdf#

For more on Health: http://www.ncpa.org/iss/hea/

FMF Policy Bulletin/ 15 November 2005