Canada: National Health Insurance

Canada’s health care system is ranked second best (after Australia) among the 11 nations studied by the Commonwealth Fund. Like the United States, Canada is a financially successful democracy made up of various provinces and territories more or less equivalent to U.S. states. Although its GNI per capita of $43,420 is around one-third lower than that of the United States, its economy is strong. In addition, because of steady immigration, Canada’s population is younger on average than populations in the majority of more developed nations, which increases the likelihood of having a relatively healthy population.

Canada is also, however, a huge country, with vast social differences reflecting its vast geographic spaces. Its population is highly concentrated along its southern border, as are most health care personnel and facilities. Neither health status nor health care access is as good in rural areas or in its remote northern regions, where many of the residents are poor Native Americans (known in Canada as indigenous peoples).

Structure of the Health Care System The backbone of the Canadian health care system is the Canada Health Act of 1984. That act stipulates that health in- surance must cover all medically necessary services except mental health care. In addition, insurance must be universal, portable from province to province, publicly administered on a nonprofit basis, and accessible to all regardless of ability to pay.

The Canadian system is built around public insurance paid for primarily by each Canadian province, with assistance from the federal government. For this reason, the Ca- nadian system is referred to as national health insurance, or (as the previous chapter noted) a single-payer system. In fact, however, the Canadian system is a decentralized one, with each province retaining some autonomy and offering a somewhat different health care system. Underpinning the system are payments that the federal government gives the provinces yearly to run their health care systems. To receive these payments, provinces must offer comprehensive medical coverage to all residents through a public, nonprofit agency. Although the details of coverage vary across provinces, each province must charge residents only minimal fees and must allow residents to move to another province without losing their coverage.

Purchasing Care Through a combination of federal and provincial taxes, the public health insurance systems cover 70% of all health care costs, including most costs for hospital and medical care and some costs for prescription drugs, dental care, long-term care, and mental health services. Because the system is based primarily on graduated income taxes, it is financially progressive: Wealthier persons pay a higher proportion of their income in taxes and therefore pay more toward health care than do others.