Health Care Insurance
Study guides: Exam 6C, Exam GH-201C, Exam GH-201U
Health Care Insurance in Canada is the single-payer, provincially administered system ("medicare") that covers medically necessary hospital and physician services for all residents, funded from general taxation rather than from risk-based premiums. Private insurance is prohibited from duplicating covered services in most provinces and instead fills the supplementary layer — drugs, dental, vision, paramedical, and hospital upgrades.
- The five principles of the Canada Health Act, which provinces must satisfy to receive full federal transfer payments: public administration, comprehensiveness, universality, portability and accessibility. These are the framework's defining list and are examinable directly.
- Federal-provincial structure. Health care delivery is provincial (Federal-Provincial Jurisdiction); the federal role is the spending power — the Canada Health Transfer, conditional on the five principles. Ottawa influences a system it does not administer by paying for part of it.
- What is not covered is where private insurance lives: prescription drugs outside hospital, dental, vision, physiotherapy and psychology, private or semi-private rooms, and out-of-country care. Group benefit plans covering these are a very large private market beside the public one.
- Why single-payer at all: health care is the extreme Adverse Selection case — the sick would buy, the healthy would not — and administrative cost is far lower with one payer than with many. The counter-arguments are queues for elective procedures, absence of a price signal, and no consumer choice of insurer.
- Interaction with P&C insurance is direct and examinable: provincial health insurers hold statutory subrogation rights to recover the cost of treating accident victims from at-fault parties, so auto and liability insurers pay health-system costs through subrogated claims. Auto accident benefits similarly pay for treatment the public system does not cover.
- Out-of-country travel insurance exists precisely because portability covers only the provincial rate, which is a small fraction of a foreign hospital bill.
Who Pays for the Accident Victim's Care A person is seriously injured in an automobile collision caused by another driver. Their care includes: emergency and surgical treatment in hospital, six months of physiotherapy, prescription drugs at home, a modified vehicle, and lost income.
Identify the payer for each, and the coordination between them.
Answer
- Hospital and physician care — the provincial health plan, at no charge to the patient. The province may then subrogate against the at-fault driver's liability insurer to recover its cost, so a P&C insurer ultimately pays for part of it.
- Physiotherapy — outside the Canada Health Act basket, so the auto insurer's accident benefits respond, up to the applicable injury-tier limit (MIG or non-catastrophic).
- Prescription drugs at home — accident benefits again, with a private group drug plan as an alternative payer; coordination-of-benefits rules decide the order.
- Vehicle modification — accident benefits, within the medical/rehabilitation limit, and effectively only available at the non-catastrophic or catastrophic tier.
- Lost income — accident benefits income replacement first, then a tort claim against the at-fault driver for the shortfall, with benefits already received deducted as a collateral benefit.
The structural point: Canada's auto insurers are, in effect, a second health payer for accident victims, covering exactly what medicare does not. That is why Canadian auto accident benefit costs are dominated by paramedical treatment rather than by hospital care — and why a change in what the public plan covers moves auto insurance costs directly.