Monday, August 1, 2011

What Does It Cost -- A Tale Of Two Sisters & Two Systems

One of my great pleasures during the time I spent in Vancouver was reconnecting with my cousin. Brainy, fascinating Cousin Catherine, who left the US after high school to go to Oxford. She never returned to live in the US, spending roughly 20 years in Great Britain and then the past 20 years in Canada.

One drizzly evening she invited me to dinner at her house. "Am I finally going to get to interview you about your health care?" I asked as we sat down at the dining room table in her cozy craftsman style home. "Well, yes, I suppose so," Catherine answered. We had had many conversations about the Canadian health care system, but we’d never gotten into details of her personal experiences.

"Have you had any problems with the Canadian health care system? -- Any waiting list problems?" No, she hadn't. No problems for her husband or kids.

The only complaint she could come up with was that family doctors generally are only willing to discuss one problem per appointment. Since sometimes multiple problems are interrelated, it can get a bit silly at times. "And I've also been coughing --" "Oh, you'll need to schedule another appointment." Even though you're not paying more for the additional appointment, who wants to spend day after day at the doctor's office?

In fact, Catherine is a huge fan of the Canadian health care system. When she goes back to visit family in the US, she often ends up in the exasperating situation of having Americans tell her how bad the Canadian system is. "People who haven't spent one day in Canada and clearly have no idea what they're talking about!"

Catherine is acutely aware of the difference between her health care situation and her sister's. Cousin Jean lives in California and is a booking agent for performing artists. She is in business for herself and therefore has to buy insurance on the individual market.

I decided to give Cousin Jean a call to find out the specifics. "I have no idea what I get," was Jean's first reaction. "I think something's covered and then they change it." Then she began to have second thoughts about talking to me about her insurance. "I'm trying to get new insurance. I don't want to jeopardize my chances." I told her I'd change her name.

In my years of working on health care reform in the US, I have come across lots of people who have these kinds of concerns about being blackballed by health insurance companies. It just goes to show how people fear the life and death control these companies have over their lives, as well as their ruthlessness -- like some sort of organized crime operation.

Once Jean was able to line up a new policy, she told me her premiums were now under $500 per month with a deductible of $6,000.

That's the price Jean pays for going into business for herself. Something her sister Catherine didn't have to worry about in British Columbia when she left her job at the university teaching Middle Eastern History, and opened a small publishing business. "I didn't feel tied to my job at the university because I knew my doctors and hospitalization were covered by the Medical Services Plan (MSP) here."

Monthly premiums for the MSP are $60.50 per month for one person or $109 per month to cover both Catherine and her husband. If their sons were still living at home, the premium would be $114 per month to cover all of them. These are the rates for anyone making over $30,000 per year. There are no deductibles, no co-payments, no guessing at what's covered. For those who make less than $22,000 per year, the premiums are $0 and for those making between $22,000 and $30,000 per year there is a sliding scale on premiums.

But what about those legendary high Canadian taxes, eh?

After doing some research online, for several income levels I added up federal taxes, British Columbian provincial taxes, the Canadian equivalent of Social Security taxes, plus the Canadian version of Unemployment Insurance (which comes out of the taxpayer's paycheck). Then I added up US federal taxes, California (where Jean lives) state taxes, Social Security, Medicare, and California State Disability Insurance. Much to my surprise, the tax rate on income at home is higher than on income in British Columbia. That was true at each income level I tested.

There are higher sales taxes in Canada, although some sales tax is refunded to low-income Canadians. Funding for health care comes out of a combination of Provincial and Federal taxes. There is no specific health care tax in British Columbia but that varies from province to province.

Is providing universal health care enormously expensive in Canada?

Well, let's compare it to the US. In Canada, they spent $4,079 per person on health care in 2008, whereas, in the US, we spent $7,538. In Canada they spent 10.7% of GDP on health care compared with 17.6% of GDP in the US. And of course, everyone is covered in Canada while 17% of Americans are uninsured and almost 20% of Californians are uninsured.

Yes, many Canadians think the amount their government spends on health care is unaffordable. I'm guessing that is the story in every country that has a modern health care system – the tale, as it were, of many cities.


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