There has been a significant amount of discussion about the U.S. health care system over the last week or so since Obama’s decision to put together a health care summit. Some of these intense discussions can be found at both Salon.com and Open Salon:
Salon's Joe Conason
There are a great number of passionate and diverse views on this topic, but what struck me most was how many people have partially or entirely erroneous information about either or both the U.S. and Universal (Canadian) health care systems. As someone who is directly familiar with both (as a user), I would like to share my experiences by comparing such key aspects as cost issues, access, quality of service, and private versus public management among others.
Before I start the comparison however, I want to point out that there are distinct advantages and disadvantages--even significant problems--to both systems. Neither system is perfect. Those issues will be discussed below and a subsequent post.
First, it is important to discuss the context of the comparison. I lived in Canada for just over 30 years before moving to the U.S. in 2001 (as an interesting side note, I flew in on Sept. 10th, 2001 to find a place to stay; you can guess how difficult it was to fly back home). I've lived in the provinces of Ontario and Quebec (each having their own Universal health care system) and I now live somewhere in the southern U.S. I am currently “insured” via the well-known company Blue Cross - Blue Shield for my health benefits.
Is There Such a Thing as Free Health Care?
Time and time again, I see posts here, at Salon and elsewhere indicating that Universal health care is free (such as in Canada, Europe, and Japan). Michael Moore even perpetuated this myth in his movie, Sicko. Although most of the Universal health care or single-payment systems do not have out of pocket co-pay, they are not free. In Canada, as anywhere else, the Universal health care system is paid via income and other taxes. Each province manages its own system.
Given this, here's a short and crude comparison between the U.S. and Canada. For this comparison, let's put a hypothetical married couple in the Southern U.S. state where I live, and another in Quebec and Ontario. All three couples will have combined income equal to $100,000. Let's also assume that the American and Canadian dollars are at-par (which actually happened last year). These comparisons do not include all potential deductions such as those associated with children, pre-tax retirement funds, mortgages in the U.S., etc. The table below uses approximate values from the 2008 tax rate.
Update March, 21: I slightly revised the income tax shown below based on other web sites that provided better information (some still provide contradicting information). The aftertax available income values slightly increased for Quebec, but a little bit more for Ontario.
U.S. Quebec Ontario
Family Income $100,000 $100,000 $100,000
Max. Fed. Inc. Tax $17,681 $21,710 $21,710
State Inc. Tax* $0 $20,000 $15,000
Health Insur. Costs** ~$7,000 --- ---
(Soc. sec, Medicare) ~$7,000 Included in Prov and Fed Taxes
After Tax Income $68,319 $58,290 $63,290
*There is no state income tax where I live. **Estimate base on my 2008 paycheck (fixed costs). Note: the health care costs equal to ~$7,000 is for three people (me, my wife and our son). Thus, the true costs will be little bit lower for two people.
As discussed above, the values are very approximate and the effective after-tax income is probably larger for each couple than what is shown in the last row. Another point to keep in mind is that the sales taxes in Quebec and Ontario are about 13% to 15%, respectively, whereas where I live right now, it is about 8.0% (to compensate for the lack of state income tax). I will not discuss other items such as public schools or property taxes, but I know they can also be very high depending where you live. I also realize that very few states in the U.S. don't have an income tax, which would also change the table results.
Overall however, I can readily attest that that the after-tax income is much larger here than when I were living in either Ontario or Quebec.
Looking at the table above, the American couple comes out just about $10,000 richer than the Quebecois. However, one could also say that the cost for health care in Quebec for a couple with an income of $100,000 is about $10,000 per year. Except that this $10,000 isn't just for health care. It also includes unemployment benefits, social security, and medical leave, all of which are much more generous than in the U.S.
When I first moved here, I was beguiled by the apparent gain of what seemed like a free and clear ten grand. After living here nine years and experiencing the true cost of private health insurance, I see things a little differently. I'll explain it more thoroughly later. It's also true that if you earn less in America (and Canada), you pay less in taxes but just as much for health care (provided that you can afford private health care at all), since the cost is fixed and is not dependent upon the income of the couple. Canadians don’t have that problem.
So here's my question: pretending that we're all earning this hypothetical $100,000, would Americans be willing to lose about $10,000 each year to get "free" health care? I would, and I know some of my friends who would. On the other hand, given the general antipathy in the U.S. for paying taxes (which is an ongoing political issue), I strongly doubt that the majority of Americans would be willing to lose that much money to get access to universal health care.
For people interested in seeing how much tax you would pay if you were living in Canada, please go to the following website. I'm sure many of you would be shocked to see how little money is left after taxes on a monthly pay check (up to 45% if you live in Quebec). However, Canadians get their deductions reimbursed after they file their taxes for the year. Less money now, more later on.
In Part II, I'm going to discuss the rest of the topics listed above, which will be within the next week. I thank anyone in advance for their comments. Given my busy schedule, I may not be able to respond often, but I will try my best.
- I added a follow-up article to this post, which describes the how much the provinces of Quebec and Ontario pay for health care (March 14th, 2009): Update to Part I
- I was finally able to finish Part II (March 29th, 2009)
- I wrote another short article that describes a comparison analysis between the Universal and Privatized health care systems related to out-of-pocket user costs for a hospital visit. You can find the article here. (May 15th, 2009)
- Again, here's another article I wrote on health care and spreading the risk. You can find the article here. (May 21st, 2009)
- Another related one: US vs Canada: Who will be ready when H1N1 strikes again? (Aug. 9, 2009)
- Here is a post I wrote about someone who does not want people with pre-existing medical conditions on his insurance plan: Insurance: "Life is not fair & it will drive up my rates" (Aug. 23, 2009)
- This post is a response to Whole Foods CEO John Mackey about personal responsibility. In a few words, it won't help us saving our health care system: Advocating personal responsibility in health: Bullshit! The article was extremely well received. (Sept. 3rd, 2009)
This post describes that 45,000 people die every year due to the lack of medical insurance coverage. This is equivalent to having an airplane crashing every day for an entire year. I compare the results with the effort placed by the federal government to reduce the number of fatal motor vehicle crashes which stands at 40,000 deaths per year: "Death Panel" Results: 45,000 Annual Deaths! (Sept. 19th, 2009)
This new post shows how the United States arrives dead last for health care delivery, even though expenditures per capita are twice as much as in Canada: Expensive health care is not always the best health care. (December 9, 2009)
Update (March 1st, 2010)
This latest post summarizes the key issues I have been discussing over the last year. I also included a detailed example to support the discussion points.