By Amanda Brown
Since 1997, the cost of public health care insurance (adjusted for inflation) has increased by 93.4 percent for the average family consisting of two parents and one child, increasing from $8,810 to $17,039 in 2023.
The data comes from a Canadian public policy think tank, the Fraser Institute.
“While Canadians may not be billed directly when they use medical services, they pay a substantial amount of money for health care through the country’s tax system,” the Institute said in its July report, “The Price of Public Health Care Insurance, 2023.”
“Unfortunately, the size of these tax payments is hard to determine because there is no ‘dedicated’ health insurance tax. As a result, individuals and families often cannot fully appreciate the true cost they pay towards the public health care system,” the think tank said.
Canadians are typically unaware of the actual expenses associated with their health care services. This is primarily due to the fact that physician and hospital services covered by tax-funded health insurance are provided free of charge at the point of use, the report said.
As a consequence, this situation leads to a significant underestimation of the genuine cost of health care. Referring to health care as “free” in Canada disregards the substantial financial burden carried by taxpayers to support health care in the country, said the Institute.
Health care in Canada is funded through general government revenues rather than a specific tax, making it challenging for Canadians to accurately determine their individual contributions to the system, it said.
The various sources of government revenues that support health care include income taxes, employment insurance (EI) and Canada Pension Plan (CPP) premiums, property taxes, profit taxes, sales taxes, taxes on alcohol and tobacco consumption, and import duties.
Most of the time, according to the Institute, health spending figures are presented as a total and are therefore difficult to assimilate and understand. “For instance, approximately $217.2 billion of our tax dollars were spent on publicly funded health care in 2022, the most recent year for which data is available from the Canadian Institute of Health Information (CIHI, 2022),” the Institute said.
“It is more informative to measure the cost of our health care system in per capita dollars: the $217.2 billion spent equates to approximately $5,579 per Canadian in 2022,” data that the Institute said came from Statistics Canada via the CIHI.
The think tank broke down the health care cost data into expenditure on a per-family basis across a number of income levels.
For a single person on an average income of around $54,000, health care insurance costs $5,622. For a couple without children with a combined income of $138,898, the cost is $16,162 rising to $17,039 for a family comprising two parents and one child.
Since 1997, the cost of public health care has increased by 138.5 percent for the average family consisting of one parent and one child (from $2,639 to $6,294) and 85.4 percent for the average family consisting of two parents and two children (from $9,144 to $16,950).
In the 10 years since 2013, costs have increased 2.5 percent for a couple without children (from $15,776 to $16,162), 7 percent for the average two-parent family with two children (from $15,845 to $16,950), and 16.8 percent for the average single-parent family with two children (from $4,601 to $5,373).
To gauge the impact of the financial burden imposed by public health care insurance on Canadian families, a helpful approach is to examine it in relation to changes in income and the costs of essential necessities like food, clothing, and shelter, the Institute said.
According to the Institute, the cost of public health care insurance for the average Canadian family grew 1.7 times faster than its average income between 1997 and 2023. Overall in 2023, expressed as averages, household income in Canada is $108,006, health care costs are $11,187, accommodation costs are $23,039, and food is $12,928. Those prices since 1997 have increased 133.8 percent, 234 percent, 132 percent, and 113 percent, respectively.
“Our hope is that these figures will enable Canadians to more clearly understand just how much they pay for public health care insurance, and how that amount is changing,” the think tank said.
“With a more precise estimate of what they really pay, Canadians will be in a better position to decide whether they are getting a good return on the money they spend on health care.”