In defence of Canadian Heathcare

Interesting math concerning our socialist... I mean, 'single-payer' system...

Please forgive this post, for I make a lot of big assumptions and generalizations below.

If you're like me, you might feel somewhat divided about President Obama's efforts to reform the American Healthcare system. Yes... you want him to succeed, you believe that he's doing the right thing... for Americans. But at the same time, what he's really advocating is a two-tiered system, something that I'm profoundly against, here in Canada.

But I think that a person can be both pro-AmericanHealthCareReform and pro-CanadianUniversalHealthCare at the same time, because their system is so much shittier than ours.

Forget the GDP arguement. It's often repeated that Americans spend a higher percentage of their country's GDP on healthcare than any other industrialized nation. But that doesn't really mean anything to anyone. The real questions are how much do I spend on healthcare, am I getting value for my money, and are others getting better value for less?

It's suprisingly complicated to try to get answers for any of these questions. Trying to figure out how much an average Canadian spends on healthcare is difficult because spending is based on taxation, and taxation in Canada is progressive (meaning that your income tax percentages differ based on how much you make -- American taxation is also progressive BTW.) We also have sales taxes and corporate taxes, which means that there are pools of money going towards healthcare that aren't coming directly from your wages (some may argue this point, though). Finally, because healthcare is administered provincially rather than federally, there's no real national percentage of how much of a Canadian taxpayer's dollar is invested into health.

As such, if you're not a professional statistician and you're only armed with Google and some basic math skills, any answers you'll find will be way over-simplified. I'm not a professional statistician, and my math skills are a little suspect, but apparently I had some time on my hands, so I did a little digging.

Wikipedia has nice little compartive chart in its Taxation in Canada page that lists average Income Tax rates in different countries. The below info is from that chart --

In 2005, a Canadian who was:
Single with no children, paid 31.6%
Married with 2 children, paid 21.5%

In 2005, an American who was:
Single with no children, paid 29.1%
Married with 2 children, paid 11.9% (wow, no wonder they have deficit problems)

Now, this doesn't mean much unless you know how much income you're paying tax on. According to Statistics Canada, the average household income in Canada in 2006 was $53,634. Meanwhile, the median US household income in 2005 was approximately $46,000, at least according to WikiAnswers.

Okay... some of these sources are legit, and some are less so. I reference two different years when comparing annual household incomes. There's no accounting for the difference in currencies. But, for brevity's sake, let's call it even.

Using the above numbers, simple math tells me that --

In 2005, a Canadian who was:
Single with no children, paid about $16,948 in personal income taxes
Married with 2 children, paid about $11,531 in personal income taxes

Now... how much of that went towards healthcare? Because I live in Ontario, I'm going to use this jurisdiction as a base. In 2009, Ontario is projected to spend 43 cents of every tax dollar on healthcare. In 2008, it was 46 cents.

If we round this to about 45% of the provincial budget, and we pretend that sales/corporate/miscellaneous taxes don't exist, we can see that this equals about:
$7,627 for single persons, spent on healthcare annually
$5,189 for families with 2 kids, spent on healthcare annually

How does this compare to America?

Well, I found this tidbit on About.com:

The federal government tracks average spending on health insurance for people with job-based coverage. The most recent figures are from 2005, and indicate that the average individual's job-based premiums were $3,991 that year, while families spent an average of $10,728.

Something's off here... the American tax system seems to be geared towards giving families a break on taxes. But, compared to my numbers above, American families pay way more on health care coverage than do Canadians.

Futhermore, as far as I'm concerned, if you're paying job-based premiums, that's really no different from a payroll tax. It's a benefit, sure, but if that money wasn't going towards health insurance, then it would be going into that employee's wallet. Thus, I think it's only fair to add this to the Americans' average income taxes... how much was that again?

According to our numbers, in 2005, an American who was:
Single with no children, paid about $13,386 in personal income taxes, for a total of $17,377 with healthcare costs added in.
Married with 2 children, paid about $5,474 in personal income taxes, for a total of $16,202 with healthcare costs added in.

And these people are considered lucky because they have insurance through their employers.

However, these numbers (inaccurate as they are) are even more damning when you consider:
-How much I inflated the Canadian costs by not including sales or corporate tax revenue in my equations... I just assumed that healthcare is paid for entirely by Income Tax, and that's not the case at all.
-That the Canadian's tax dollars cover everyone, not just those who can afford premiums, and even those who fall upon hard times and are in most need of healthcare will still be covered.
-That the Canadian system cannot disqualify a taxpayer for "pre-existing conditions" or any other kind of nonsense.
-That all of the revenue generated for healthcare goes towards healthcare, rather than lining the pockets of insurance company execs or stockholders.

Our system is not perfect. But it's a helluva lot better than theirs.

I know this is supposed to be an arts blog. But, what more can I say when this post on Parabasis sums up this issue so much better than I ever will.