Health care industry warns of ‘massive’ cost blowout as cost-sharing increases continue
The Canadian Association of Independent Business said Wednesday that the federal government’s proposed health care overhaul will push up the costs of insurance coverage for all Canadians by a “massive” amount, but that the sector is prepared to “keep fighting” to protect the current health care system.
In its latest forecast, the group says that by 2026 the cost of premiums for an individual will be $16,000 higher than the average cost in the United States.
The forecast also forecasts that premiums will increase by a whopping $16.4 billion a year over the next decade.
The forecast is based on the government’s plan to increase premiums by 1.3 per cent a year for 2018.
This increase is a far cry from the 1.7 per cent rate hike the government announced in the fall.
It is also significantly lower than the increases the federal health care and retirement plan announced in February.
The Liberals have also announced a plan to phase out a $10-a-day surcharge on employer-provided health insurance for everyone in 2018, and a $15-a, flat-rate surcharge for all employees in 2019.
“This will lead to more cost increases for consumers, but at the same time, it will lower the cost for employers,” the group said in a statement.
The group added that the increase in premiums will have the greatest impact on the middle class, who have historically seen higher premium costs than higher income earners.
The government has said that it wants to increase the minimum wage, increase the Canada Child Benefit, and make changes to the tax system to increase revenue.
The Liberals, meanwhile, have proposed a series of tax cuts that will lead the federal economy to grow faster than the global economy over the coming decades.
The health care sector, however, is not prepared to support those measures, the association warned.
“We have already seen the government increase premiums in the private sector, so why not in the health care industry?” said Bob Campbell, president of the association.
“The cost-containment mechanisms are there to protect consumers, and if you’re going to put in an extra tax, that’s what you have to do.”
The association estimates that a 15-per-cent increase in the minimum rate for individuals, which would mean an additional $1,800 for a family of four, would drive up health care premiums by almost $20,000 a year.
While the increase for the private health insurance sector will be relatively small, it could drive up the cost to health care providers by $1.8 billion a time, according to the association’s latest forecast.
The cost of health insurance coverage will increase to $13,000 for a single person and $16 the next year for a couple, the organization warned.
The association expects that the rate hike will increase the cost, on average, by about $10,000 in 2026.
The association also said the health insurance industry’s premium contribution rate will increase, which will be higher for larger employers, to about 25 per cent, compared to 23 per cent for smaller employers.
The Canadian Association for Independent Business, which represents more than 800 companies in the country, said the federal Conservative government’s health care bill is a “sham” that will drive up premiums for all consumers.
“It’s really unfortunate that the Conservatives have decided to pursue a plan that will cost Canadians $16 billion and then go on to raise premiums to the maximum,” Campbell said.
“What’s at stake is the future of the Canadian economy and the health of the country.”