Why ‘Free’ Health Care Is Never Worth the Cost

Why ‘Free’ Health Care Is Never Worth the Cost

Democrats are dead-set on having the federal government pick up more of the nation’s health tab. This is the principle behind everything from the drive to lower Medicare’s eligibility age, to the push for billions of dollars for home care, to bigger subsidies for coverage through Obamacare’s exchanges, to the dream on the far left of Medicare for All.

People have a “right” to health care, progressives argue. So, in their mind, it should be free — or at least heavily subsidized.

But, health care is a good and a service subject to economic scarcity and the constraints of market forces. Even countries with government-run healthcare systems have been unable to make them “free.”

Consider a new report on Canada’s government-dominated healthcare sector from the Vancouver-based Fraser Institute.

This year, Fraser found, the average Canadian family of four paid roughly US$12,000 (C$15,039) in taxes for its supposedly “free” health insurance. And that bill didn’t cover prescription drugs, dental care, or several other services excluded from the national health scheme.

Well-off Canadians pay dearly for their government health insurance, which often buys them little more than a long wait for care. Canadians earning around US$132,000 a year ($166,740 Canadian) pay well over US$15,000 (C$19,166) for health insurance annually.

For those making US$227,000 a year (C$286,808 Canadian), annual health insurance taxes exceed $33,000 (C$41,916).

By comparison, the combined spending on premium contributions and out-of-pocket costs for an American household with private, employer-sponsored coverage was $3,700 in 2016-2017, according to a 2019 report from the Commonwealth Fund.

So not only is health care not “free” in Canada — in many cases, it costs people more than it does here in the United States.

Why do so many Canadians — and Americans — harbor the belief that health care is free north of the border? The authors of the Fraser report offer a number of hypotheses.

Most Canadians don’t pay anything for care at the point of service. This contributes to the feeling that their medical care is somehow a gift from the government.

On top of that, the exact amount that each Canadian spends on healthcare each year isn’t easy to determine, as the revenues used to fund medical care come from a variety of different sources — including everything from property and sales taxes to premiums for employment insurance and pension plans.

Adding to the confusion is the fact that, when Canadian health costs are reported by the country’s government, those figures “are often presented in aggregate, resulting in numbers so large they are almost meaningless.”

This lack of transparency doesn’t just hide the cost of care for Canadians, but for the rest of the world. Progressives are sure to emulate them in their own drive to bring more of the nation’s health sector under federal control.

On measures of healthcare quality, meanwhile, the comparison between the United States and Canada isn’t close. A separate Fraser report found that Canadian patients face a median wait of 22.6 weeks for specialist care after being referred by a general practitioner.

Those kinds of treatment delays would make national news in the United States. They’re an everyday occurrence in Canada.

That’s why Canadians who can afford to often leave the country to seek care. According to SecondStreet.org, a think tank, Canadian patients took more than 217,000 trips abroad in 2017 for health care.

As Canada’s experience makes clear, promises of “free” health care aren’t just empty, they’re dishonest.

What actually awaits this country should we adopt a single-payer system — or anything resembling it — is a world in which treatment delays are chronic, high-quality care is scarce, and personal healthcare costs are both unreasonably high and entirely invisible.

Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is “False Premise, False Promise: The Disastrous Reality of Medicare for All,” (Encounter 2020). Follow her on Twitter @sallypipes. Read Sally Pipes’ Reports — More Here.

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