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Understanding the Political Economy of the Evolution and Future of Single-Payer Public Health Insurance in Canada

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  • J.C. Herbert Emery

    (Department of Economics, University of Calgary)

Abstract

Surprisingly little attention has been paid to how we pay for health care affects how much we spend on health care. In this paper, I discuss how noncontributory finance and effective subsidization of public health care spending with federal cost sharing crowded out demand for private insurance as voters opted for high levels of public health spending. From this perspective, the Romanow Report’s call for increases in federal cash transfers to provinces for health care spending would result in an increase in provincial health spending and a diminution of the demand for private health insurance. It is not clear, however, that federal subsidization of health spending is either sustainable or socially desirable. Indeed, as Canada’s population ages, the current financing of health care represents enormous unfunded liabilities for the provinces. To sustain current levels and growth rates of health spending without tying current revenues to that objective means asking the next generation of working Canadians to pay far more for their health care than do working Canadians today. Although the effect of population aging on health care expenditures is projected to be modest, it could trigger a serious political crisis for Canadian medicare as taxes rise.

Suggested Citation

  • J.C. Herbert Emery, 2010. "Understanding the Political Economy of the Evolution and Future of Single-Payer Public Health Insurance in Canada," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 3(2), February.
  • Handle: RePEc:clh:briefi:v:3:y:2010:i:2
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    References listed on IDEAS

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    1. J.C. Herbert Emery, 2010. "Understanding the Political Economy of the Evolution and Future of Single-Payer Public Health Insurance in Canada," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 3(2), February.
    2. Emery, J.C. Herbert, 2010. ""Un-American" or unnecessary? America's rejection of compulsory government health insurance in the Progressive Era," Explorations in Economic History, Elsevier, vol. 47(1), pages 68-81, January.
    3. R.G. Evans & K.M. McGrail & S.G. Morgan & M.L. Barer & C. Hertzman, 2001. "APOCALYPSE NO: Population Aging and the Future of Health Care Systems," Social and Economic Dimensions of an Aging Population Research Papers 59, McMaster University.
    4. J. C. Herbert Emery & Ian Rongve, 1999. "Much Ado About Nothing? Demographic Bulges, The Productivity Puzzle, And Cpp Reform," Contemporary Economic Policy, Western Economic Association International, vol. 17(1), pages 68-78, January.
    5. Parry, Ian W.H., 2005. "Comparing the welfare effects of public and private health care subsidies in the United Kingdom," Journal of Health Economics, Elsevier, vol. 24(6), pages 1191-1209, November.
    6. Mathias Kifmann, 2005. "Health insurance in a democracy: Why is it public and why are premiums income related?," Public Choice, Springer, vol. 124(3), pages 283-308, September.
    7. Deber, Raisa B. & Forget, Evelyn L. & Roos, Leslie L., 2004. "Medical savings accounts in a universal system: wishful thinking meets evidence," Health Policy, Elsevier, vol. 70(1), pages 49-66, October.
    8. Evans, R.G. & McGrail, K.M. & Morgan, S.G. & Barer, M.L. & Hertzman, C., 2001. "Apocalypse No: Population Aging and the Future of Health Care Systems," Centre for Health Services and Policy Research 2001:3r, University of British Columbia - Centre for Health Services and Policy Research..
    9. Michael Yeo & J.C. Herbert Emery & Daniel Kary, 2009. "The Private Insurance Debate in Canadian Health Policy: Making the Values Explicit," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 2(3), June.
    10. Bundorf, M. Kate & Pauly, Mark V., 2006. "Is health insurance affordable for the uninsured?," Journal of Health Economics, Elsevier, vol. 25(4), pages 650-673, July.
    11. Miguel Gouveia, 1997. "Majority rule and the public provision of a private good," Public Choice, Springer, vol. 93(3), pages 221-244, December.
    12. Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
    13. Dagmar Dyck, "undated". "Fiscal Redistribution in Canada, 1994-2000," Working Papers-Department of Finance Canada 2003-22, Department of Finance Canada.
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    1. J.C. Herbert Emery, 2010. "Understanding the Political Economy of the Evolution and Future of Single-Payer Public Health Insurance in Canada," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 3(2), February.
    2. J.C. Herbert Emery & David Still & Tom Cottrell, 2012. "Can We Avoid a Sick Fiscal Future? The Non-Sustainability of Health-Care Spending on an Aging Population," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 5(31), October.
    3. J.C. Herbert Emery, 2016. "Tax-Assisted Approaches For Helping Canadians Meet Out-of-Pocket Health-Care Costs," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 9(23), June.

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