Editorial Musing: New MSP Premiums for 2017

Sara Golling
By Sara Golling
September 29th, 2016

How much do you pay for BC Medical Services Plan (MSP)?  This year, if you’re a single person who earned $21,900 (or so) last year (“adjusted net income”), you’ll pay nothing  — as long as you applied for Premium Assistance.  But if you’re a couple, and you and your spouse earned a total of $30,001 last year, then this year you’ll pay $1632 for medical services coverage.  If you and your spouse earned more than  that, for example $4,000,000 dollars, then you’ll also pay $1632 for medical services coverage, but it won’t break your bank account unless there’s something very, very wrong with your budgeting.  A couple earning $32,640 in a year will notice it a lot more, because it’s exactly 5% of their income.

Early this year the BC government announced a 4% increase in MSP premiums for 2017, along with a number of other changes to the rates and how they’re applied.  (Before 2016, rates for 2016 were increased by 4.2%.) It seems that some of the unfairness was finally too much, and some adjustments were calculated.  But wait — not so fast!  There was an outcry about  some of the changes, and the government backtracked on that 4% increase.   Other adjustments remain. They serve to spread out the increments in rate increases so that a person earning less than $42,000 a year does not pay the full $75 per month premium.  A person earning less than $24,000 will not have to pay any premium the following year.   Also, there is now no advantage to being a couple, or to having one child — we all pay full price for each adult in a household, but nothing for children. 

In 2017, that couple with 2016 earnings between $30,001 and $34,000  will pay $1,104 in MSP premiums, instead of $1632.  That’s an improvement.

Andrew Weaver, Leader of the BC Green Party, wants to do away with MSP premiums altogether, and save taxpayers money in administrative costs while he’s at it.  He’d have people pay for medical services as we pay for many other services — as part of our income taxes, which would have the effect of ensuring that someone who earns  $30,001, or $42,001, doesn’t have to pay just as much for medical coverage as someone earning much, much more.     

Weaver says, “a B.C. Green Party government would eliminate the regressive monthly MSP premiums. Instead, a B.C. Green government would introduce a progressive system in which rates are determined by one’s earnings. And a net and substantive administrative savings to taxpayers would arise in rolling MSP premiums into the existing income tax system.”  He points out that Ontario already has a system similar to what he is proposing.

When Weaver, who is the MLA for Oak Bay – Gordon Head in Victoria, introduced the idea in the BC Legislature, a response from Finance Minister de Jong included a 1961 quote from Tommy Douglas, then a Member of Parliament.  Douglas had said, “I want to say that I think there is value in having every family and every individual make some individual  contribution. I think it has psychological value. I think it keeps the public aware of the cost and gives the people a sense of personal responsibility.

“I would say to members of this House that even if we could finance the plan without a per capita tax, I personally would strongly advise against it. I would like it to be a nominal tax, but I think there is psychological value in people paying something for their cards.

Of course, even if Weaver’s idea to do away with separate billing for MSP coverage isn’t adopted, so that everyone earning more than $24,000 a year still benefits from the psychological value of paying separately for medical services, the issue of the fairness, or unfairness, of the schedule of premiums remains.  For the 2016 rates, who decided that no one, no matter how huge their income, should have to pay any more than someone who barely makes it across the $30,000-a-year line?  It will be an improvement for a number of lower-income people, but does it make enough difference to raise that threshold to $42,000-a-year for 2017?  Is this schedule of fees fair to citizens?  Does it optimize revenue to support the medical system without imposing hardship on young families or on seniors living on fixed incomes with rising food costs?  And are the administrative costs of billing people for MSP, as distinct from other government services, worth it for the psychological benefit that Tommy Douglas favoured back in 1961?

Our MSP is a boon.  If you’ve ever been injured or ill south of the border, and had to struggle  with your health insurance company about whether or not the insurance you had purchased actually provided coverage for your problem, or if you’re old enough to remember medical costs before we had our medical plan, you’ll be grateful for it.  (Think about this on Thanksgiving.) 

While being thankful for our MSP, we can still question the way we pay for it, and seek improvements.

For the full schedule of rates for 2017,  click this link for the BC Government website.

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