How Canada’s Healthcare System Works | Advantages and Disadvantages

How Canada’s Healthcare System Works | Advantages and Disadvantages

Canada is usually praised for its free healthcare system. It is indeed an interesting system since it is tax-funded and not private.

Even though it works very differently than the healthcare system in the United States, for example, its unique way of operating has advantages and disadvantages.

A question that often emerges though, is whether Canada’s system is actually free and how is that accomplished. 


What do we know about Canada’s healthcare system?

First of all, this system is also known as Medicare.

Medicare is supported by the Canada Health Act of 1984. With Medicare, the government of Canada guarantees universal, free, and accessible healthcare for everyone. 

Canada’s ideology, regarding healthcare services, is characterized by a strong ethic to care for all people. That means that healthcare should be available for everyone, despite their financial income or social class. 

Looking at how this system actually works, it is important to know that it is tax-funded. This means that civilians pay for healthcare with their taxes. However, government tax revenues are those that directly fund the country’s healthcare system. 

Therefore, it can’t be fully estimated how much each Canadian civilian pays for their healthcare each year. Nevertheless, the Canadian Institute for Health Information (CIHI) calculated in 2017 that approximately $6,604 is paid by an average Canadian annually for Medicare.

This number does not concern the more wealthy Canadians because they pay higher taxes. For example, people who barely have an income might have to pay around $477 in taxes only for public health insurance, when those who are quite wealthy can pay up to $37,180 (just for Medicare). 

In particular, many attempts have been made to estimate better how much public money goes to Medicare. It is estimated that an average Canadian family of 2 parents and 2 children will gain $119,082  annually, from which $11,735 will be given through taxation to Medicare (2015 data).

An individual, who has no family, with a salary of $42,244 will pay—through taxes—$4,222 for Medicare.

Interestingly enough, this system’s services are “free” and available for everyone, but at the same time, not every medical procedure is included. Most of the time, prescription drugs as well as visual and dental care are excluded, therefore every citizen must pay with his or her own money. 

Another characteristic of this healthcare system is that its services are different in each province of Canada. 

For instance, in Ontario, hospital fees, doctor visits, medication, and vision care, and exams for the elderly and children are provided for free.

In the province of British Columbia though, doctor visits, hospital fees, massage therapy, naturopathy, and acupuncture are offered without any extra charges. 

Advantages of Canada’s healthcare system

A significant advantage of this system is that it is truly available for everyone. The system does not discriminate against citizens.


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That is why there are no criteria that need to be fulfilled to receive medical care (unless you are a non-legitimate immigrant). The Canadian Government also tries to raise awareness, regarding health issues, by organizing events in which people get informed about the healthcare system and about how to protect themselves from diseases and viruses.

It is noteworthy that this system takes care of everyone on equal terms, especially those with special needs. People with disabilities receive all the sufficient medical care by Medicare as well. They don’t have to pay more. This fact reflects upon the ethos Canada includes in its healthcare system.

Disadvantages of Canada’s healthcare system 

Even though this system provides all the basic medical care, it lacks many services. First of all, the exclusion of vision and dental care—as mentioned above—needs to be taken into account.

Reflecting on the information mentioned above, “free” is not a valid name for the healthcare system of Canada. After all, the taxes citizens pay are very high for a reason. Even though there is not a ” healthcare tax,” a good part of taxes paid are absorbed by the Medicare system.

Furthermore, Medicare is not sufficient. A lot of people have taken advantage of their ability to also have private health insurance.

This is justified because private health insurance companies cover every kind of medical care and anything that is needed such as prescription drugs, ambulances, dental care, and many more services. Also, many people receive private health insurance from their employers. 

When it comes to Insurers that provide private healthcare insurance, there are three:

1. Co-operatives: Basically, this category concerns small groups of people that work together and purchase healthcare.

2. For-profit: These insurers are the “classic” insurers we all know of. They profit from providing extra medical care insurance to individuals and families. They usually offer health insurances that include every service and access to every medical facility. Despite their high cost, many people prefer them because of the “safety.”

3. Not-for-profit: These insurers do not provide their profits to shareholders, but instead they put the profit to their businesses. They usually provide health insurance for families, but not to individuals. 

Pharmaceutical coverage: an important issue

Quite recently, Pharmacare was endorsed by the Canadian government. Pharmacare is the concept of reducing the price of drugs to give every citizen the ability to buy pharmaceutical supplies and drugs.

This was introduced because not every Canadian can afford private healthcare insurance, since Medicare does not cover their supply financially. 

Therefore, Pharmacare reduces the price of prescription drugs. Pharmacare is a concept that was an issue during the 2019 Canadian Federal Election. This motion passed, despite the opposition of the pharmaceutical companies (their profits would decrease significantly). 

Possible solutions

Taking everything into consideration, it is vital to highlight the most important points mentioned above and their significance. 

First of all, the fact that the whole health care system of Canada is based on taxes is very confusing. Taxes that civilians pay sustain hospitals. Yet, there is not one tax that is known to be explicitly for health care fees. This whole notion cancels the label of “free.”

  • The taxes Canadian citizens pay are, in general, very high. Hence, Canada might benefit from introducing laws or regulations that “declare” where taxes are going. In this way, people will know how much money they are paying for Medicare.
  • At this moment, it could be argued that by not release more transparent statements, the government is concealing how they apply taxes to the healthcare system.
    • One concern about this is that Canadians might be mad to know how much money the government has in its coffers, but still can’t pay for vision and dental. This might not go over too well. 
  • Another solution could be to raise taxes a small amount to supplement the already existing system. This would allow the government to include vision and dental.
  • A more radical solution would be the “destruction” of public health care, meaning Medicare wouldn’t exist. Therefore, people would only have private healthcare insurance, like America’s healthcare system.
  • Even though many Canadian citizens can afford basic private health insurance, the government shouldn’t neglect those who have lower income. Everyone has a right to medical healthcare and this shouldn’t be forgotten. Thus, insurers could also create health insurance packages that are low-cost.
    • A system like the above would demand a lot of changes and political as well as financial arrangements. 

Canada has always had a “free” healthcare system (Medicare) which is based on beliefs that universal healthcare is a basic right. And, despite some problems, Medicare is a good healthcare system that can be great with some minor improvements. 

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