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Multi-tier health insurance alive and well in Canada
by Kieran A.G. Bridge
 Most, but not all, provinces in
Canada have laws that ban private insurance for services already covered by government health insurance plans. The coverage under these government plans, however,
is far from comprehensive. Two major gaps exist that are largely filled by private insurance: costs associated with dental care and expenses related to medications.
In fact, about 30% of health care costs in Canada are currently paid for by private insurance or directly by patients.
In British Columbia, for example, the grandly titled Medicare Protection Act (MPA) governs the public health insurance system for most people, not including those with Workers’ Compensation Board (WCB) claims or injuries from car accidents. Under the MPA, private insurance is prohibited for services listed in the government’s schedule of insured services. In B.C., it is not an offence to enter into such a private insurance contract, but the MPA makes the contract void. However, if medical care is not covered by government insurance or if it is provided outside Canada, then private insurance coverage is legal.
Ontario’s Health Insurance Act goes even further in banning private insurance. It makes private insurance for treatment that is covered by the provincial medical insurance plan void, and also makes it an offence to enter into such a policy.
Why do provincial health insurance laws make the use of private insurance so difficult? To put it simply, they were drafted to avoid contradicting the Canada Health Act (CHA), which was discussed in the October 2006 article, The Canada Health Act: Myths and Realities.
For example, the B.C. MPA forbids the Medical Services Commission from acting in a manner that does not satisfy the criteria in the CHA. The province is obviously concerned about retaining its entitlement to a “full cash contribution” from the federal government.
It is this provision of the MPA that the B.C. Nurses Union relied on in its March 2002 lawsuit against the provincial government alleging that private clinics charged user fees that were not refunded by the provincial government. Ironically, it was the unlawful strike of the B.C. Hospital Employees Union in 2004 that led to cancellations of surgery and a 7.8% increase in the number of people on waiting lists at that time.
The regulations under B.C.’s MPA say that “insured benefits” do not include services provided under, for example, the National Defence Act, the RCMP Act, the Penitentiary Act, the Workers’ Compensation Act or the Insurance (Motor Vehicle) Act. This allows the province, through the WCB and Insurance Corporation of British Columbia, to pay for acute and rehabilitative treatment for workers and drivers separately from the provincial health insurance plan that applies to other B.C. residents.
Clearly, we already have statutorily mandated, multi-tier systems of health insurance and health care in Canada. Many services are not covered by the provincial governments’ health insurance monopolies. Some people are able to skirt around waiting lists by pure happenstance, such as when they are injured at work or while driving. Similar injuries that occur while at home or while getting some exercise would force the same person to use the provincial health insurance system, and endure the challenges associated with it.
The public policy message our current system appears to send is this: if you’re going to be careless, do so at work or while you’re behind the wheel, and don’t try to keep fit by playing physically demanding sports.
Kieran Bridge is General Counsel for the TU Group of Companies.
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