Unaffordable and bankrupt medicare

The London Free Press,
By Rory Leishman

The Canadian health-care system has many problems, but at least it shelters all Canadians from catastrophic medical bills in the event of a serious illness. The same, of course, cannot be said for the United States, where literally millions of people – some estimates put the figure as high as 47 million – have no health insurance.

Granted, several million of the uninsured in the United States are young people in good health who can well afford private medical insurance, but choose instead to spend their money on a fancy car or some other luxury. These people who gamble with their health deserve little sympathy if a serious illness drives them into bankruptcy.

Millions of other Americans want comprehensive medical insurance, but simply cannot afford it. The federal and state governments provide comprehensive medical care for the elderly, the disabled and poor children. Why, then, does the United States not follow the Canadian lead, by outlawing private medical care insurance in favour of a universal and comprehensive public system for all?

There is a good and sufficient answer to that question: The Canadian system is heading for bankruptcy.

British Columbia Finance Minister Carole Taylor has documented the problem in her province. In a report last September, she warned that if public spending on medicare in British Columbia were to continue to increase at recent annual rates, it would absorb 71 per cent of the provincial budget by 2017. That’s obviously out of the question.

In a paper published on January 11, Brett Skinner of The Fraser Institute noted that at least four other provincial government studies and a federal Senate report have also concluded that the rate of increase in Canadian health-care spending over the past several years is unsustainable.

Skinner has conducted his own study of the developing crisis. Based on figures going back to 1975, he concludes: “Government health spending in six of the ten provinces is on pace to consume more than half of total revenue by the year 2020, two thirds by the year 2035, and all of provincial revenue by 2050.”

The Canadian medicare system is fiscally broken. As costs escalate, governments cut services with the result that more and more Canadians have to put up with progressively longer wait times for ever fewer treatments.

There can be no solution to this problem without some fundamental reforms: Skinner persuasively argues that Parliament and the provincial legislatures must, at the least, introduce a system of affordable co-payments by patients to curb frivolous demands on the public system.

In this respect, Quebec is leading the way with a new law that will allow private hospitals which receive public funding to charge extra fees to patients for services covered by the province’s public plan. In this way, the Quebec government hopes to increase both the number and quality of services available to all Quebecers.

In the United States, President George W. Bush proposes to make private health insurance more affordable by means of a substantial tax deduction that amounts to $15,000 for family coverage and $7,500 for single coverage through a qualifying health-insurance plan. While this measure would bring comprehensive private health insurance within the means of millions of additional taxpayers, it cannot help millions of others who have little or no taxable income.

Several of the state governors in the United States have advanced proposals of their own for making adequate private medical insurance available to all residents, regardless of income. Switzerland already has such a plan in effect: Thanks to a system of government regulations and subsidies tied to income, every resident of Switzerland can well afford to purchase a mandatory health insurance plan from one of several competing private firms.

In a recent study of the Swiss health care system, the British think tank, Civitas, concluded: “Swiss attachment to universality guarantees an extremely good quality of care to all with little if any rationing.”

Would that the same could be said about the Canadian medicare system. Is it any coincidence that the Swiss system encourages vigorous competition among private-sector medicare providers, while Canada stands alone as the only non-communist country in the world that maintains a public-sector medicare monopoly, by forbidding the purchase and sale of competing private health insurance?