Health insurance costs up 48 per cent, Report

While many Canadians proudly boast about our country’s “free” health care, a new study has broken down exactly how much money in many tax dollars go into the system each year.

According to a new report by the right-leaning Fraser Institute, the average Canadian family will contribute $11,735 in taxes for public health insurance in 2015.

“Contrary to the way we find (health-care insurance) is characterized, it isn’t free,” Bacchus Barua, one of its authors, said.

The think-tank found during the past decade healthcare insurance costs for the average Canadian increased by 48.5 per cent to about $8,205 from $5,527.

Health-care insurance costs are also rising 1.6 times faster than the average Canadian income, the report says, leading Barua to conclude the health-care system is unsustainable.

“When health-care insurance is growing faster than income, it’s an indication you can’t sustain it,” he said.

The increase in healthcare costs outpaces those for food and shelter.

The report says spending on shelter grew by 35.9 per cent, compared with an 18 per cent increase for food. Only the cost of clothing – up 64.1 per cent – grew at a higher rate.

Barua said many Canadians may believe health-care insurance is free because they never see a bill for medical costs and it doesn’t have a dedicated tax. Instead, it is funded by general government revenue collected from multiple sources, such as Employment Insurance, the Canadian Pension Plan, property taxes, sales taxes and import duties.

The report also suggests people living in provinces with health-care premiums may be inclined to believe these pay the full cost.

“However, the reality is that these premiums cover just a fraction of the cost of health care and are paid into general revenues from which health care is funded,” the report says.

The large numbers associated with health-care spending may be “difficult to digest,” the report says, and because the numbers are so astronomical, “they are almost meaningless.” In 2014, about $141 billion was spent on health care, or $3,961 for every Canadian. As the report notes, not everyone pays taxes, so it looked at 10 income groups.

The authors hope the report will help people to judge whether they are getting value for money.

Agencies/Canadajournal