MSP premiums are 'unfair' and 'inefficient' says health policy expert
A 1.5% income tax increase would be enough to replace current $2.3B MSP premium revenue, says researcher
The idea of collecting medical premiums is dated but one that persists because governments don't like raising taxes, especially not for the wealthier portion of the population, says one health policy expert.
More than 62,000 people have signed a petition calling for an end to MSP premiums in B.C., with both the Green Party and the NDP echoing the demand. But the B.C. government has said no big changes to the MSP are coming because taxpayers will not understand that their money is going toward healthcare if medicare premiums are integrated into income tax collection.
But one health policy researcher says British Columbians are smart enough to understand some of their income tax needs to go toward healthcare programs.
"I think Canadians know that. It's the equivalent of saying that Canadians need to know the roads we're driving on aren't free," said Steve Morgan, a professor of health policy in the School of Population and Public Health at UBC.
Increasing taxes by 1.5 per cent would be enough to cover the $2.3 billion worth of MSP premiums the government currently collects, according to Morgan.
Under the current system, everyone making more than $30,000 a year pays the same amount — about $75 a month. Those making less than $30,000 are largely exempt.
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'Unfair' and 'inefficient'
Healthcare premiums help the government appear more transparent about the allocation of funds, but it creates unnecessary paperwork for administrators, and perpetuates income inequality, said Morgan.
"When you dig deeply, you find that it is both inefficient in terms of both administrative waste and difficult in actually collecting the revenues," he said.
"It's a terribly unfair system of raising revenue for healthcare."
Households with an income between $25,000 to $50,000 can pay MSP premiums that are up to six per cent of their household income, according to Morgan.
"That's an extraordinary amount of household income, particularly for families that have to pay rent, have to put food on the table. There's not a lot left."
But wealthier households will likely fight any move toward any policy that means higher taxes for them, he said.
"Economic inequality is staunchly defended by those with higher incomes."
To listen to the full audio, click the link labelled: MSP premiums are 'unfair' and 'inefficient' says health policy expert.
- An earlier version of this story said Steve Morgan was a director with UBC's Centre for Health Services and Policy Research. However, that was a previous position. He is now with the School of Population and Public Health at UBC.Feb 15, 2016 4:59 PM PT