Tax-Assisted Approaches for Helping Canadians Meet Out-of-Pocket Health-Care Costs

32 Pages Posted: 28 Sep 2016

See all articles by J. C. Herbert Emery

J. C. Herbert Emery

University of Calgary - Department of Economics

Date Written: June 23, 2016

Abstract

Canadians are not saving for the inevitable costs of drugs and long-term care which they will have to pay for out of pocket in their old age, and these costs could potentially be financially devastating for them. Later in life, when out-of-pocket health-care costs mount, those who previously enjoyed the security of a workplace insurance plan to cover such expenses will face a grim financial reality. Many aspects of care for older Canadians aren’t covered by this country’s single-payer health-care system. Besides prescription drugs, these include management of chronic conditions by ancillary health professionals, home care, long-term care, and dental and vision care.

Statistics show that in 2012, Canadians’ private spending on health care totaled $60 billion, with private health insurance covering $24.5 billion of that amount. Coverage of health-care costs that don’t fall under Medicare’s purview is at present rather piecemeal. The non-refundable federal Medical Expense Tax Credit covers expenses only after the three-per-cent minimum, or first $2,171, of out-of-pocket costs have been paid by the individual. The Disability Tax Credit is available to those with a certified chronic disability, and these individuals are eligible for further support via the Registered Disability Savings Plan. A Caregiver Tax Credit is also available.

The federal government has a golden opportunity to provide an incentive for Canadians to set aside money to pay not only for the often catastrophic medical and drug costs that can come with aging, but also to save so they can afford long-term care, or purchase private health insurance.

Keywords: Out-Of-Pocket Health-Care Costs, Health Care, Health Care Costs, Medical Expense Tax Credit, Caregiver Tax Credit

Suggested Citation

Emery, J. C. Herbert, Tax-Assisted Approaches for Helping Canadians Meet Out-of-Pocket Health-Care Costs (June 23, 2016). SPP Research Papers, Vol. 9, Iss. 23, June 2016. Available at SSRN: https://ssrn.com/abstract=2844452

J. C. Herbert Emery (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada
403 2205489 (Phone)
403 2825262 (Fax)

HOME PAGE: http://econ.ucalgary.ca/emery.htm

Register to save articles to
your library

Register

Paper statistics

Downloads
34
Abstract Views
343
PlumX Metrics