After seven years of unchanged fees for provincial health-care coverage, British Columbians will in January begin paying about 6 per cent more for Medical Services Plan premiums.
And whether it comes out of B.C. residents' pockets or those of their employers, that hike won't be the last, as the province unveiled plans to increase premiums every year in line with health-care spending.
The decision, announced by Finance Minister Colin Hansen in Victoria as part of Tuesday's provincial budget, triggered an outcry from health unions and other critics who said the MSP hike would put another financial burden on consumers already bracing for the Harmonized Sales Tax.
Health authorities, already scrambling to balance their budgets, will now have the added challenge of absorbing increased MSP premiums, said Judy Darcy, a spokeswoman for the Hospital Employees' Union.
“That's a big hit,” Ms. Darcy said. “For public sector employers, for private sector employers and for individuals who are paying their own premiums for themselves and their families.”
The province went to extraordinary lengths to protect health care and services in the face of unprecedented, tough economic conditions, Mr. Hansen said.
But the belt-tightening is already hurting, critics say.
“We know that on the front lines, we are losing jobs and we are losing services,” Debra McPherson, president of the British Columbia Nurses Union, said in Victoria. “We are losing services for frail seniors that would allow them to stay longer in their homes. We are losing public health nurses on the eve of an H1N1 epidemic and mass immunization drive.
“So we know we are having cuts on the front line,” she said, citing the recent layoff of 17 public-health nurses by the Fraser Health Authority.
Mr. Hansen outlined plans to increase health-care spending in each of the next three years by about 6 per cent a year, while boosting Medical Service Premiums by 6 per cent to help offset spiralling health budgets.
By 2011-2012, health-care funding is expected to hit $15.8-billion.
Mr. Hansen insisted that the plan would protect vital services and emphasized that the government was taking steps to protect low-income people from the MSP hike. Next year's hike will amount to a maximum of $3 a month for single people, or $6 per family, budget documents said. MSP premiums will be eliminated or reduced for about 180,000 people as part of the program.
“When people fall on hard times, we provide support for them,” Mr. Hansen said in his budget speech. “And these are absolutes; they are not negotiable.”
Higher MSP premiums will hurt consumers and employers, critics said.
“I'm worried we're going to see this as an ongoing feature of budgets,”
Hiring and wage freezes could make it more difficult to hire and keep employees, she said.
As of January 1, MSP premiums – unchanged in B.C. since 2002 – will increase by about 6 per cent to “help keep health care funding sustainable.”
Health-care costs have climbed by 45 per cent since 2002, budget documents state. And the province “intends to increase premiums annually by the percentage increase in health care spending.”
The province now hopes to keep increases to the 6 per cent a year range.
Earlier this year, the provincial government told health authorities that it would not provide more money to bridge a projected $360-million collective shortfall, resulting in sweeping reviews as the health authorities looked for ways to balance their budgets.
So far, the authorities have taken steps that include hiring freezes, restrictions on overtime and cutbacks in elective surgeries.
Other measures are being contemplated, and some of them could affect the most vulnerable of B.C. residents, including aboriginal children and families, said Mary Ellen Turpel-Lafond, child and youth advocate for British Columbia.
Ms. Turpel-Lafond said outreach programs for young mothers, mental health and other services would likely be affected as health authorities try to find ways to balance their budgets.
Meanwhile, B.C.'s child poverty rate remains the worst in the country, she said.
“They may say it's an absolute, but I can't see where the dollars follow the commitment,” she said.
An aging, growing population could threaten the government's attempts to restrict increases in health-care spending. Among major risks to the fiscal plan include “utilization rates” for services such as health care.
The budget also includes $80-million for H1N1 programs.
