Friday 28 October 2016

Health Care Costs Comparison – USA versus Canada

An average family of four living in the state of Minnesota, U.S.A. without any health coverage from employer pays on average US$ 20,000 for health insurance. In addition, there is a $9,000 deductible. They also have to pay 20% of the cost of prescriptions, doctor’s visit or lab tests. For example, based on a grossly inflated price of an EpiPen, one has to pay $120, or 20% of $600.  Plus, one is limited to the type and location of health providers due to the in –network vs out of network provision.  The above numbers assume that the family is in generally good health without any significant prior claims.  Depending on how you do the math, it would cost at least US$35,000 or more for health care coverage. With or without Obamacare, this is the reality of the health care system in the United States, which is the only major industrialized country in the world without a universal health care system.  

Moving north to Canada, the Fraser Institute reported recently that the average Canadian family will contribute just shy of C$12,000 in taxes for public health insurance in 2015.  But wait a minute, isn’t health care “free” in Canada? We don’t pay any deductibles or fees when we visit doctors. Sure, there are co-payments and dispensing fees paid for prescriptions, but never that much, right?  According to the Fraser Institute, there is no one single health care tax, but instead , funding for the system comes from multiple sources, including income taxes, the Canadian Pension Plan, and Employment Insurance. This combination "blurs the true dollar cost of the service," the study authors argued.  As a result, many people to grossly underestimate the true cost of health care. Note that the figure is derived by taking the total healthcare spending in Canada divided by the total population.


In summary, we now know that healthcare is not totally “free” in Canada even though I feel that we get better bang for our bucks compared to our neighbour in the south. There is definitely excesses in the healthcare system in the USA, namely in the form of health care providers such as physicians, drug manufacturers, plan operators, and etc. who profit immensely from this inefficient delivery system.

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