In fiddling with the MSP premium in the recent B.C. budget, what the government really displayed was its weak and muddled thinking on this issue.
There are so many problems with the concept of premiums that every other province in Canada has wised up and got rid of them. Not so the B.C. Liberals, who stick to premiums for, presumably, ideological reasons that have nothing to do with evidence, facts, common sense or any sympathy for those living on low incomes.
There are so many problems that it is hard to know where to begin. But a good place is the finance minister’s ludicrous belief that it is a good way to remind us that health care is not free.
First, I doubt anyone in B.C. seriously believes health care is free — except perhaps those around the cabinet table and their advisers, who seem to believe we need such a reminder.
Second, the premium does not remind us of the costs of care because it is unrelated to how much we use the health-care system. However, if we are healthy, it might remind us that we are paying for something we aren’t using — so maybe we should use it and get our money’s worth.
If they really wanted to remind people of health-care costs, the government would need to institute a user fee and make it proportional to the cost of care.
But the evidence is clear that the main effect of user fees is to dissuade low-income people from accessing necessary care, including preventive care. So they wait until their condition becomes severe, even an emergency, which is both inhumane and much more expensive to manage. The premium has much the same effect.
Under the Medicare Protection Act, “enrolment with MSP is mandatory for all eligible residents and their dependents.” But in practice, low-income people — especially those with marginal employment who do not have a benefits package — are likely to find themselves unable to pay. The MSP premium will be of less priority than rent, food or other necessities when times are tough.
Not surprisingly, the system is badly in arrears. Recently, the Canadian Taxpayers Federation reported that more than 300,00 MSP payments are more than 90 days overdue, in a system where “only about half of B.C.’s 4.4 million people pay MSP directly, and roughly 800,000 people are exempted due to low income.” The deficit is more than $400 million, in a system that collects $2.4 billion.
If people who have not paid their premiums become ill and seek care, they are personally responsible for the costs, according to the ministry website. This, presumably, means all the costs they incur, which could be in the tens of thousands of dollars. But remember, the people affected by this policy are low-income and sick — they need support, not punishment, which is what this policy amounts to.
Moreover, it is at the very least unethical — and perhaps illegal, if ever tested in the courts — to deny someone care because they have not paid the premium, when in fact they — or we, as a collective — have already paid more than 85 per cent of their care costs through our taxes; premiums only contribute about 14 per cent of the health budget.
In addition, the premium is expensive to administer. As the CTF’s Jordan Bateman has asked: “Why spend a couple of hundred million dollars every year to collect a tax when we already have a system that works?” — that system being income tax.
An additional major problem is that the premium is a flat tax above $30,000 net income, and thus a regressive tax; people who make less pay proportionately more. But it is also regressive in another way — it discriminates against those who do not have good jobs with benefits, where the premium is part of the benefits package (cabinet ministers, for example) or where it is taken directly off a regular paycheque. So it hits low-income earners in part-time, temporary work — the very people we should be protecting and helping most.
Given all these problems, what government in its right mind would continue with such a badly flawed system? Remind me again why premiums are such a good idea.
Dr. Trevor Hancock is a professor and senior scholar at the University of Victoria’s school of public health and social policy.