The Canadian Centre for Policy Alternatives’ plan for replacing B.C.’s Medical Service Plan premiums with higher taxes has created debate, but it’s a debate that should be more far-reaching, says the province’s health minister.
“I’m pretty sure that if I came out and said that there’s not going to be any more MSP premiums tomorrow, that that would be very popular,” Health Minister Margaret MacDiarmid told the Times Colonist the day before the report was released. “And I also think it would be really unwise and really imprudent.
“If we are going to shift how we do this, if we’re going to change who pays, or how much they pay or eliminate [premiums] altogether, that really needs to happen in a broader context of where does that money come from otherwise, and what other kinds of changes might be considered in tax policy.”
MSP premiums are forecast to bring $2.02 billion into government coffers this year.
The CCPA says $2.2 billion can be raised through a 20 per cent tax increase across the board, plus adding two new brackets for those earning $150,000 and $200,000 annually.
Premium increases that kicked in Jan. 1 were built in three years ago because health-care costs were increasing at a rate of three to six per cent a year, MacDiarmid said.
This year’s four per cent increase is “really going to hurt low-income families and the middle class as well, because their wages have stagnated over the last few years,” said Trish Garner, spokeswoman for the B.C. Poverty Reduction Coalition.
Garner said the threshold for paying full MSP premiums is “incredibly low” at $30,000. A full exemption doesn’t kick in until people earn under $22,000, whether for an individual or a family.
“With the recent increase, it just puts more of a burden on them to meet their basic needs — there’s rent and food and child care and the other costs of living,” Garner said.
“They’d be earning less and then paying extra for what should be a universal right.”
Canadian Taxpayers Federation director Jason Bateman called MSP premiums a tax — “it sucks, there’s no doubt about it” — but said the solution for eliminating them is not to raise taxes for those with higher incomes, as the CCPA suggests, but to cut spending.
“We already pay enough tax in B.C. and we don’t need to pay MSP,” he said in an email.
“Governments would save hundreds of millions in bureaucracy, collection and not having to pay their employees’ premiums. Not to mention economic and employment growth from cutting this payroll tax for business.”
Currently, MSP premiums in arrears more than 90 days total $360 million.
Opposition health critic Mike Farnworth called MSP premiums a regressive tax, but said rolling them into provincial income tax is not likely to be part of the NDP’s election platform.
Instead, if the NDP formed the next government, it might consider raising the income threshold for paying premiums to more than $30,000, he said.
© Copyright 2013