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Health Insurance in Canada: A Public/Private Healthcare Model

Healthcare costs are a challenge for many countries around the world. They’re realizing that the double whammy of longer than expected lifespans of their respective populations combined with the higher cost of caring for people over 65 years of age is costly for their healthcare budgets.

Public Healthcare Weighs Heavily on Gross Domestic Product

For Canada, the situation is no different. The cost of operating the public healthcare system north of the border was approximately CAD $228bn according to healthcare data released by the Canadian Institute for Health Information for 2016. That year, it stood at just under 12 percent of the total GDP for the whole of Canada.

Using the median costs per person residing in Canada, the cost per person to fund their portion of the healthcare system was approximately $5,789 per year. This was slightly higher than both Australia and the U.K., but lower than Sweden and less than half the cost of the American healthcare system.

Rising Healthcare Costs

Researchers at the Fraser Institute looked at the cost of healthcare over the last few years. They compared the previous two decades and asked whether Canadian health costs had risen as fast as other major expense categories like food or shelter. It won’t come as much of a surprise to learn that healthcare costs have been rising even in Canada.

Over a two-decade period, the cost of food rose by just under 55 percent and shelter rose by almost 95 percent, but healthcare costs broke the mold with a 173 percent jump.

GDP, Demographics, and Healthcare

For the country as a whole, rapidly rising healthcare costs are unsustainable. While the total costs and increases are not comparable with the United States, which has its own difficulties in that area, it’s still extremely bad news for the people of Canada. None probably thought it was that expensive to provide healthcare to every man, woman, and child nor that the costs would rise so steeply, but there we are.

The demographic shift and past reviews by the U.K.’s National Health Service showed that managing older patients aged 65 and older often cost five times more than the average for younger patients. The simple fact is that our bodies break down more often as we age and there’s no getting around that reality. For nationalized health services, that’s very bad news. As the population gets older, the burden of the healthcare system will continue to weigh on public funding to the point of bursting.

The other concern with demographics is the increasing age of a population with far more people getting to a pensionable age in the near future. Because of this, fewer people will be in the workforce paying enough taxes, which puts additional pressure on government funding to pay for healthcare expenses. Ultimately, less will be coming in and considerably more will be going out; a totally unsustainable mix.

Public vs Private Healthcare in Canada

The assumption of many Canadians is that healthcare is public and fully paid for by the Canadian government. The idea is that it’s far superior to the American model for healthcare in that respect. That’s not actually the case.

Based on the research by the Canadian Institute for Health Information, public spending accounts for around 70 percent of healthcare costs. The remaining 30 percent includes individual Canadians paying out of their own pocket for medical expenses and private health insurance covering the rest. The Canadian government does not cover one hundred percent of the costs to run the service.

There is some good news though. Despite the hikes in healthcare spending over the past 20 years, public spending is coming under the radar more as governments, including the one in Canada, realize that they have a big problem looming and are wondering how to deal with it. 

The viability of a Public Healthcare System in the Future

A debate is currently raging over the nature of a public vs private healthcare system. The reality with developing demographics is that countries simply cannot afford to provide a completely free healthcare operation. Not only are they not efficiently run from a cost standpoint compared to private care, but they also often have extended waiting lists for operations.

Not every operation is covered under Canadian health either, leading residents to need to make a choice between passing on the procedure and seeing how their health progresses vs paying privately for the operation.

Canada is not alone in this regard. Certain healthcare procedures and eyewear are covered under the U.K.’s NHS system, but not others. Similarly, people have a choice whether to wait for their turn to have an operation sometimes months down the line or opting to pay for private health insurance to give them another option should they require it.

Thinking About Private Health Insurance?

Even in a country with a national health system, there’s a solid case for having a separate health insurance policy.

Sometimes an operation is desirable, but not one that the state agrees to pay for. It’s also possible that an older, less reliable procedure or one with less durable results is the only one offered whereas a newer, experimental procedure with great outcomes is not. When having private health insurance, there’s the possibility of another option if the coverage is sufficient to do so.

Understanding your choices with Canadian health insurance is not easy. Read over this guide to apprise yourself of what’s needed and the different policies available to citizens. Only when you’re well informed about health care is it possible to make the right decisions for you and your family. Don’t delay because you’ll want the policy in place long before you might need to use it.

Canadians are likely to see the burden of health costs increasingly fall into their hands and away from government spending as it becomes obvious that funding is beyond their ability to manage. With fewer workers paying significant taxes as more retire, Canadian healthcare will become increasingly private and less publicly funded. Having private health insurance already in place ensures that coverage is there either way.

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I am the owner of Cerebral-overload.com and the Verizon Wireless Reviewer for Techburgh.com. Ben’s love of gadgets came from his lack of a Nintendo Game Boy when he was a child . Ben vowed from that day on to get his hands on as many tech products as possible. Ben’s approach to a review is to make it informative for the technofile while still making it understandable to everyone. Ben is a new voice in the tech industry and is looking to make a mark wherever he goes. When not reviewing products, Ben is also a 911 Telecommunicator just outside of Pittsburgh PA. Twitter: @gizmoboaks Hangouts: Beavercountyemt Skype: Ben.Oaks

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