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MARCH 14, 2009 7:15PM

Health Care Comparison: U.S. vs Universal - Update on Part I

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Before I tackle Part II (and in the light of recent discussions with fellow open.salon.com members), I decided to take a closer look at the costs related to the Ontario and Quebec Universal health care systems. This is a direct follow-up to the first post.

For this update, I checked out the most recent budget for these two provinces:

Ontario: Link 1, Link 2

Quebec: Link 1

The important points are below (please note that most of these numbers are estimates) (values in billion dollars):                                                      

                                                        Ontario                        Quebec

Total Operational Expenses              $82.3B ($91.2B*)    $53.4(60.2B*)

Expenses for Health Care**              $39.6B                        $23.6B

Revenue from
Personal Income Tax                        $24.7B                        $18.0B

Revenue from Sales Tax                   $16.9B                        $13.1B

Transfer from
Federal Government                         $16.9B                         $10.9B
                                                      (Same as sales tax)

All revenues                                      $91.5B                            $60.3B

Surplus (deficit)***                          $0.3B                               $0.1B

Population (2006 est.)                  12,687,000                  7,546,131

Health Care Costs/Person               $3,121                           $3,127

*Includes payment of interests on debt. **Expenses include everything: maintenance of medical buildings, payment of medical staff and equipment, etc. ***Governments in power always try to make themselves look good; according to an internet search, both provincial governments actually ran a deficit last year ($1B for Quebec and $0.5B for Ontario).

These table results are pretty interesting. First, the costs of Universal health care account for about 48% to 45% of all operational expenses in the provinces. Using the values from the table I used in the first post above, this means that the portion of provincial income tax that goes towards health care is equivalent to $10,400 and $10,550 (per couple) for Ontario and Quebec respectively. Second, if we include the deficit in the calculations it means that these revenues--including those coming from income and sales taxes--don't actually cover all operational expenses. And that of course includes those associated with the Universal health care. This explains why both governments are trying to cut the costs associated with health care:

Canadian Medicine

CBC

Montreal's Gazette

Third, a portion of the federal taxes paid by Canadians go towards paying for the operational expenses of the provinces, as shown in the 5th line (transfer from the Federal Government). So part of the income tax paid at the federal level comes back to the provinces and this subsidizes provincial health care costs as well. Finally, the average health care cost per person is about $3,100 per year. I found it interesting that both provinces arrive at the same value.

On the surface, it looks like Canadians are getting a better deal than I am here in the Southern U.S. A person from Ontario or Quebec paying $3,100 for health care each year is a lot less than my paying $7,000 for my private health care insurance and my employer forking over another $7,000 on my behalf (note: these values are for three people  and not all three have the same costs - see original post). Even worse, it's not like I'd get to pay $3,100 in taxes instead of $7,000 (for three people and excluding all other health related costs, such as co-pays and deductibles) to a private company if America changed to an entirely Universal health care system (as discussed below). After all, 45.8M Americans currently don't have insurance (or about 15% of the 304M people living in the U.S.) and currently not as many people use the health system because it's too expensive. That would change if America had Universal care, and taxes would go up to pay for it. Individuals would no longer have to pay for their own health care, but taxes would go up across the board to cover this change for everyone. Since the U.S. and Canadian tax systems are progressive, those with low income would have a lower tax rate than the average value ($3,100) and the high income earners would have to make up the deficit. Again, I'll discuss this and other issues in part II.

In the meantime, here's some interesting additional information:

U.S. population

Uninsured people

Tax rates around the world

Tax rates by state

Update (May 15th, 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. You can find the article here.

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