Reprinted from Open Salon.
In two previous posts (here and here), I talked about the costs associated with the health care systems in Canada--mainly in Ontario and Quebec--and the U.S. (and of course in America I mean what we're charged by the health insurance company that covers me and my family.) In these posts, I showed that the Ontario and Quebec governments spend about $3,100 per year per person for Universal health care, which accounts for about 45% of the entire operational budget of these two provinces. The effective amount is actually larger, however, when we include the transfer of funds from the federal government to the provincial governments (see updated values in my latest post - Dec, 2009). But since the income tax in Canada is progressive (it is in the U.S. as well), not everyone actually pays $3,100 in income tax in order to get 'free' health care. Low income earners pay less, while higher income individuals make up the difference--meaning that they pay more than $3,100 in taxes.
(You might be interested to know that the cost of health care in France is approximately $3,986 per person.)
If we translate this $3,100 per person from Canada to the U.S., and if we assume that we'd get the same service as in Ontario or Quebec for that amount (which isn't a given and which I discuss below), the entire health care budget for the U.S. would be approximately $942,400,000,000 or close to a trillion dollars (recall that about 304 million people live in the U.S., versus about 35 million in Canada). Although this value is extremely large, the health care cost per capita is still much better than the current situation, as discussed here and here. In fact, the U.S. health care system is apparently on the verge of bankruptcy.
If the entire private health care system in America were replaced by Universal health care, taxes would go up. (And I mean income or any other types of taxes--note that now politicians tend to use the word 'fees' instead, because it's not the dreaded 'T' word). On the other hand, no one would be smacked with hefty fees if they became seriously ill or disabled. Many people would even see a reduction in costs (see links above), if they paid taxes for Universal health care instead of fees to private companies; some people (very few?) -- namely those who aren't insured and don't use medical services a lot (a risky behavior) -- would probably see a cost increase. Of course this is obviously a simplification, as other factors influence the costs of health care in the U.S. and in Canada.
I'm going to interrupt myself here to define a couple of things to help you navigate the rough and troubled waters of the U.S. private health insurance system. First, a 'co-pay', which I mention later, is the fee above and beyond what your health insurance provider is required to cover. This means that all -- yes, all -- medical offices charge you at the door, $25.00 for a general practitioner and $45.00 for a specialist. The 'network' refers to hospitals, doctors, specialists and other medical practitioners under the aegis of a particular health insurance company. Dr. Blog in Snook might be in network, for example (so you only have to shell out a co-pay of $25.00), whereas Dr. Doe in Cut 'n' Shoot might not be, in which case you could have to pay for the entire visit yourself.
And while I'm here, I should point out that when I talk about 'health care', I'm not talking about coverage for dental or vision. In the U.S., there is separate insurance for those, and separate insurance companies to deal with them. This can result in a fun game of 'find the right card in your wallet' depending on which office you're at. My wife once managed to give our son's eye doctor the wrong card three times. This can also result in some people not having any dental or vision coverage at all, because they simply can't afford it.
In Quebec and Ontario, the provincial governments only covers medical costs. They might also cover dental and vision, but only if it is medically related, such as an injury or birth defect. I'm almost certain that Ontario will pay for annual vision checks and eyeglass lenses for everyone, and Quebec will for children, but I may be wrong. Let me get back to you on that. I am certain, however, that the Quebec Government stopped paying for vision tests and teeth cleaning for adults, to save on health care costs.
Now, I'm going to continue my comparison analysis based on my experience as a user and observer for both systems. I could have written a book about this, but decided to be as brief as possible, though this post is still pretty long (it certainly was to write).
Coverage and Insurance Plans
It is important to point out first that private insurance coverage varies greatly in the U.S. You can get excellent coverage (or a plan), but you usually have to pay more for it. Health plans here charge by the month, and you'll recall that I pay about $7,000 per year for three people--me, my wife and our preschooler son. You can also get very bad coverage. We have a friend, for example, whose 'plan' basically consisted of putting a portion of his monthly paycheck (pre-taxed, which is known here as a payflex account) into an account exclusively earmarked for health care. (This is similar to what John McCain and the GOP proposed a few months ago, by the way). Having this account allowed him to save a whopping 25% on prescription drugs. That's it. He and his family didn't have any actual medical coverage per-se, since he had to pay the full costs of any medical visit or treatment directly from his payflex account. He told me that it would have been better to just keep the money in his paycheck, since there was also a fee associated with the special account.
For my family's health insurance plan, I selected the most expensive one. This was mainly because this plan was the closest we could get to the Universal health care back in Canada (though believe me, it is not!). This plan also covers us when we travel within the U.S., Canada and many other countries, including non-emergency medical visits. Most of the other plans I was offered via my employer only have limited coverage outside the state or where I live, let alone internationally. At least one only covered the county where I live. Less expensive medical plans like these also limit which medical professionals you can select or which hospital you can go to for elective surgeries, even if these hospitals are far away from where you live. You're of course allowed to seek treatment or, if necessary, go to any hospital's emergency room outside the insurance company's network, but these visits are considered 'out-of-network' and will either have a much higher associated cost, or not be covered at all.
One important limitation of the Ontario and Quebec health systems is that they offer limited coverage outside Canada. This means the provincial governments will pay only what they would normally pay for the medical professional or service inside the province. So if you get hit by a bus in Topeka, Kansas, you're responsible for all other costs above what OHIP in Ontario and RAMQ in Quebec will cover (a lot of Canadians buy private health insurance specifically for traveling). Further, you only get this coverage if you're a resident of either province, and don't live outside these provinces for more than six months per year. The last proviso was instituted when the 'snowbird' phenomenon started--that is, retirees who would spend eight to ten months in Florida or other parts of the southern U.S., but still use the health benefits from Quebec or Ontario. (No more key lime pie for you, sneaky baby-boomers.)
Health insurance in the U.S. is usually provided through your work, and your employer pays part of the monthly costs. (You can also buy health insurance as a private citizen, but the costs will be higher because you're responsible for the entire monthly fee. It was interesting listening to our real estate agent lamenting about this.) Depending upon the contractual agreement between the employer and the insurance company, the insurance company cannot reject insuring employees with serious pre-existing medical conditions. Again, if you're a private citizen you're on your own. I wish any self-employed American with a preexisting medical condition who needs health insurance luck. They're going to need it.
I know that a lot of different medical insurance plans exist, and that what I've talked about above doesn't describe all of them. Please feel free to fill me in if you know something I don't.
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