Canadian vs. American Health Care

You know how you always hear "Well, taxes are REALLY HIGH in Canada" in response to any argument about how their social services might fare better than U.S. services?? Is this really the case for the average person? That is, would the average U.S. couple be better off under the U.S. system or the Canadian system in terms of money left over after taxes and insurance??

Let's make some estimates with actual data…


It looks like the highest combined Canadian Federal and Provincial tax brackets is not quite 46.95%. That's 29% Canadian Federal plus 17.95% New Brunswick Provincal. http://www.cra-arc.gc.ca/tax/individuals/faq/taxrates-e.html

By comparison in the U.S., the highest federal bracket is 35%. http://www.irs.gov/formspubs/article/0,,id=150856,00.html

Of course, lots of STATES have income taxes too. Some states don't but the vast majority do… Taking a swing at an average (in my head) for the highest bracket, I'm going to say it looks like about 6.5%... Ohio is a VERY average state for the U.S., their highest income tax bracket for 2007 is 6.555%. I'll use 6.5%... http://tax.ohio.gov/documents/forms/ohio_individual/individual/2006/PIT_IT1040_Instructions.pdf

Let's not forget LOCAL taxes. In the area in which I live, there are lots of suburbs with their own rate, they average about 2%.

The average annual health insurance premium in 2000 was $2,655 for single coverage and $6,772 for family coverage in private-sector establishments. http://www.ahrq.gov/news/press/pr2002/insprepr.htm

That last figure is for family coverage and so is higher than the other figure but those figures are also seven years old. Given that health insurance premiums have been rising dramatically over the last few years, I'm going to use the last figure. http://www.cbo.gov/ftpdoc.cfm?index=5152&type=0

Note also that these figures will go up dramatically as you age. http://www.ahipresearch.com/pdfs/Individual_Insurance_Survey_Report8-26-2005.pdf

An average couple in the U.S. making the median U.S. household annual income earns 48,201.00. http://pubdb3.census.gov/macro/032007/hhinc/new04_001.htm
Neglecting tax credits, shelters, etc. for sake of simplicity, they pay 6475.15 in Federal Income Tax. If they live in the state of Ohio, they'll pay another 1617.00 in State tax. They can probably count on a local tax bill of around $964.00. For an approximate bill of $9000.00. If they want insurance, they're looking at another $6000 in premiums! $15,000 per year total.

In Canada, our couple makes a bit less (Thank you Federal Reserve Board). Let's say about $48,000 Canadian. Again neglecting tax credits, etc. they'll pay $8143.43 in Federal Income Tax. Taking Alberta's tax rate (because it's easy) of 10% for everyone, the couple pays another $4800.00 for a tax bill of 12943.43… Of course, in Alberta residents are covered by the Canadian Health Care Act. http://hc-sc.gc.ca/ahc-asc/media/nr-cp/2002/2002_care-soinsbk4_e.html
While there are some services which permit "Extra-Charging", these fees are small, on the order of co-payments common in U.S. care, and will be similarly neglected.

It looks like our young couple comes out ahead by a few grand in Canada…

Two final points:
1) As health care cost rise in the U.S., this disparity is only going to get bigger.
2) For those individuals who suspect that Canadian health care is "Like going to the DMV", have you TRIED to get an appointment with a specialist in the U.S. recently? Long waits are quite common in the U.S.; you can easily wait MONTHS to see a good specialist... The DMV would be an improvement.