Shutting down government – as U.S. Republicans did in response to Obamacare – is a pretty extreme way to show displeasure, but at least Americans are being forced to talk about their health system and its shortcomings. Canadians prefer to bury their heads in the sand, confident our health system is superior (morally and otherwise) to that in the United States.
The main complaint about Obamacare – the nickname for the Patient Protection and Affordable Care Act of 2010 – is that it will make the U.S. health insurance more like Canada’s (read: socialist and devoid of individual freedom).
The grandiloquent purpose is to ensure that all Americans have health insurance. After all, among the 50 wealthiest countries on Earth, the U.S. is the only one without universal health care. Obamacare won’t get it there, but it will make insurance a little more available and affordable for some. Canadian medicare, for its part, is becoming less universal and affordable, but we don’t like to talk about that.
When the Affordable Care Act was passed, 51 million Americans had no health coverage; the new law will halve that number. This despite the fact that, under the law, health insurance is mandatory. That’s because the law allows individuals and employers to opt out if they pay a penalty equivalent to about 1 per cent of income.
In Canada, public-health insurance is granted to all citizens; it is viewed as a benefit of citizenship, not an imposition. But, almost all provinces have an opt-out clause, though there is not much benefit in doing so because premiums (read: taxes) are not refunded.
Canada’s medicare system provides first-dollar coverage (meaning it covers 100 per cent) of all hospital and physician services. Other health services such as prescription drugs, home care, physiotherapy and dental care are covered to varying degrees by public plans; about two-thirds of Canadians (22 million) have private health insurance to cover these supplementary costs, which, for the most part, is covered by employers. Those legislated distinctions are decades old and out-of-date, yet we have no Obamacare-like shake-up in the works.
In the U.S., there are large publicly funded insurance plans, for 48 million seniors and people with disabilities (Medicare) and 62 million people on social assistance (Medicaid) and they offer more extensive coverage than most Canadian public plans.
Others must purchase private insurance – mostly through their employer – but it’s costly: $16,000 (U.S.) a year on average for a middle-class family of four. In Canada, that same family would see about 40 per cent of its tax bill go to public health insurance, or about $8,000 annually, and another $1,000 for private insurance.
What is often lost in the rhetorical debates is that about 160 million Americans are not really affected by Obamacare because they are already covered by private insurance. Only a small number will shift to public plans; most will getting slightly better private coverage.
That’s because the new law imposes some new rules on private insurers. It ends the practice of imposing lifetime and yearly limits on coverage, makes it more difficult to refuse to cover those with pre-existing conditions and dump people when they are sick, allows for family plans to include adult children up to age 26 and mandates that insurers must spend a minimum of 80 per cent of premiums on actual medical care.
The Affordable Care Act also makes it mandatory for all insurers to cover 10 essential health benefits. The catch is that the plans can come with some pretty hefty deductibles and co-payments. A so-called platinum plan, for example, covers only 80 per cent of medical costs and a bronze plan 60 per cent.
Obamacare actually promotes the sale of private insurance rather than bolstering public plans. A whole new level of bureaucracy has been created in each state – called health exchanges – to allow those without insurance to shop for an affordable plan. In Canada, private health insurance is increasingly necessary, but far less regulated and affordable.
Obamacare won’t do much to rein in health spending. The non-partisan Congressional Budget Office estimated that, over a 10-year period, Obamacare will add $940-billion (U.S.) to the federal budget, but result in new tax revenues ($567-billion) and savings from lower costs ($477-billion), so it will actually result in a lower deficit. One of the most puzzling aspects of the Obamacare debate is that it’s rarely, if ever, discussed in terms economic benefits and ensuring more equity. In Canada, we take those for granted.
The reality is that, while there are still significant differences between the Canadian and U.S. health systems, the manner in which they are financed is slowly converging. For Americans, care is becoming more accessible and affordable but, for Canadians, it is becoming less accessible and less affordable.
It makes you wonder why, as Americans rage, Canadian remain complacent.