Tuesday, September 14, 2004

'Free' Medicare Costs Canadians $5,500 Each

Tue, September 14, 2004
The breaking point
How much does 'free' medicare cost the average Canadian family? About $5,500. And how much more will they be expected to pay in future? The way things are going, a lot
By Greg Weston -- Sun Ottawa Bureau

Warning: Ordinary taxpayers tuning into this week's first ministers' conference on curing what ails Canada health care may experience bouts of anxiety, nausea and sharp pains in the wallet.
Forget the three days of eye-glazing bafflegab about base funding, escalator clauses and equalization payments.
What the nation's political leaders are really debating is how much more money -- our money -- they can throw at a dysfunctional health system without causing a taxpayer revolt.
In personal terms, the costs of Canada's "free" medicare miracle are already staggering.
The average middle-class Canadian family currently pays -- wait for this -- well in excess of $5,500 a year in cash and taxes just for health care.
How much more "free" can medicare get?
While exact numbers are elusive, here are some interesting figures compiled with the help of the Canadian Taxpayers' Federation and several recent studies.
Our best estimate is the average family pays over $4,000 in taxes for health care, and another $1,000-plus in direct charges and premiums for private insurance.
In Ontario, lucky taxpayers are also now getting whacked with a new provincial health premium averaging about $600 a year.
It all adds up to something around $5,500.
Overall in Canada, health care now eats up almost one out of every four dollars taxpayers dole out to federal and provincial governments as income and sales taxes.
Look at the deductions on your next paycheque and do the math.
On a per-capita basis, federal and provincial governments together currently spend about $88 billion a year on health care, or roughly $2,700 for every man, woman and child in the country.
Individual Canadians and their private insurance companies shell out an additional $36 billion in health costs, or roughly another $1,100 a head.
While politicians continue to claim "user fees" would be the death of medicare and the demise of Canada as we know it, individuals are already coughing up an estimated $18 billion a year for health services, straight out of their pockets.
Of that amount, almost $7 billion is for dentists, eye specialists and other medical professionals.
Individuals and their private insurance companies will also pay out almost $10 billion this year for prescription drugs.
Roughly a third of that amount will come directly from family bank accounts.
These numbers help to explain why so many Canadian families routinely find themselves in financial crises over the costs of prescription drugs that may well mean the difference between life and death.
Don't talk to them about "universally accessible health care." It is to laugh. Or, in their case, it is to cry.
The massive cost of drugs in this country -- $20.3 billion and climbing at an estimated 8.1% this year -- may also explain why the federal Liberals' election promise of a national pharmacare program has been quietly slipped to the political backburner.
Little wonder every health care debate in this country is now framed in the omnipresent "sustainability."
At issue is not whether the existing system can sustain current or better levels of health services to Canadians and their families -- it can't.
Rather, the crisis at hand is whether Canadians and their families can afford what lies ahead.
Various studies forecast that without a major re-engineering of the medicare system, spending on health care in Canada will grow at up to 9% a year.
As a matter of perspective, in 18 months, those spiralling costs alone would eat through all of the $12 billion in increased funding the feds are now offering the provinces over five years.
As for the future for the Canadian taxpayer, it doesn't take a mathematician to figure out the impact of adding even 5% a year increase to the existing family burden of $5,500.
The medicare message is clear: Fix it or go broke.