Private insurance premiums are Canadians’ single largest out-of-pocket health expense, averaging $1,200 a year per affected household, according to a new study from the University of British Columbia.
The analysis, published online this week in the journal Health Policy, shows that Canadian households spent nearly $20 billion out-of-pocket on health care in 2009, with premiums amounting to $5.9 billion of that total. Spending on private premiums has increased 53 per cent since 1998.
The bulk of private premiums includes the employee-paid portion of employer health benefits plans. Typically, these plans cover non-Medicare-covered health items including prescription drugs, dental services, and disability coverage.
The next-highest out-of-pocket costs were direct user charges for dental services, prescription drugs and eye care.
“As drug plans and other benefits have become more expensive, some employers are coping by passing these costs off to their employees,” says lead author Michael Law, an assistant professor in the School of Population and Public Health and a researcher in UBC’s Centre for Health Services and Policy Research. “I don’t think Canadians facing these charges realize they’re paying $1,200 a year on average, as the charges are simply taken right off their paycheques.”
The UBC study examined spending by Canadians on private health insurance premiums and patient charges for health care services not covered by Medicare. The study used data from over 160,000 Canadians who completed Statistics Canada’s Survey of Household Spending, and examined changes between 1998 and 2009.
The researchers also found that a growing proportion of households face potentially catastrophic health care costs. In 2009, 1.4 million Canadians spent more than 10 per cent of their after-tax income on health care – a 57 per cent increase from 1998. This spending level was more common in households with a senior, and those living in British Columbia and the Atlantic provinces.
“Canadians often think that our health care system is universal and free of patient charges,” Law says. “For physician services and hospital stays, this is largely true, but for other important services such as prescription drugs, the amount Canadians are being charged is rapidly increasing. There is little doubt these rapidly rising costs are causing families to defer or avoid necessary healthcare services and putting their health at risk.”