Since health care expenses are funded out of general government revenue, the Fraser Institute says it is difficult for people to determine how much of their tax dollars actually go towards health insurance. Using data from Statistics Canada and the Canadian Institute for Health Information (CIHI), a recent report from think tank puts the annual cost of health care for a family of four at about $12,000.
Health spending figures are often presented in aggregate, and the Fraser Institute says the numbers are so large that they are almost meaningless. For example, in 2014 health spending in Canada came to about $141 billion; this includes provincial and territorial government funds, federal health transfers to the provinces and territories, and provincial government health transfers to local governments. In per capita dollars, this $141 billion comes to approximately $3,961 per Canadian. However in The Price of Public Health Care Insurance, authors Milagros Palacios, Bacchus Barua, and Feixue Ren say that the per capita amount would only be an accurate measure of public health care costs if every Canadian resident paid an equal share.
"However, not all Canadians pay equal tax amounts each year," reads the report. "Some Canadians are children and dependents and are not taxpayers. Conversely, higher-income earners bear a greater proportion of the tax burden than lower-income earners and thus contribute proportionally more to our public health care system. Various tax exemptions and credits also further complicate matters."
In order to have a better estimate of the cost of public health care insurance for the average Canadian family, the authors suggest it is necessary to determine both how much tax an average family pays to all levels of government as well as the percentage of the family’s total tax bill that pays for public health. Their conclusion is that a typical Canadian family of four will actually pay $11,735 for public health care insurance in 2015.
Broken down by income group, the study says that the 10% of Canadian families with the lowest incomes will pay an average of $477 in 2015, the 10% who earn an average income of $59,666 will pay an average of $5,684, while the families who figure among the top 10% of income earners in Canada will pay $37,180. Looking at previous years, the authors calculate that between 2005 and 2015 the cost of public health care for the average Canadian family increased 1.6 times faster than average income, 1.3 times as fast as the cost of shelter, and 2.7 times as fast as food.
“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,” concludes the study. “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.”
