How much are Canadians paying for public health insurance in 2021?

Think tank unpacks average healthcare costs for Canadian households based on family type and income

How much are Canadians paying for public health insurance in 2021?

The amount of money Canadians spend on public healthcare is difficult to estimate even in normal times. But during the ongoing global pandemic, it’s even more challenging – but that hasn’t stopped analysts from the Fraser Institute from trying.

In a new report titled The Price of Public Health Care Insurance, 2021, authors Nathaniel Li, Milagros Palacios, and Bacchus Barua noted that the true cost of public health care is hard for Canadians to understand.

Because Canadians do not pay directly for their health care, and determining the value of their contribution to public health care insurance is also difficult, it can be hard to shake off the misconception that health care in Canada is free rather than being paid for through taxes.

“[Canadians] pay a substantial amount of money for health care through the country’s tax system,” the report said. “Unfortunately, the size of these tax payments is hard to determine because there is no ‘dedicated’ health insurance tax.”

Drawing on estimates of tax costs and other figures, the report estimated the average payment for public health care insurance for six common Canadian family types in 2021. The numbers ranged from $3,842 for single-parent, two-children families to $15,039 for two-parent, two-children households.

Projected public healthcare insurance costs for the other types of families, according to the report, include:

  • One, parent, one child - $3,909;
  • Unattached individuals - $4,296;
  • Two parents, no children - $13,533; and
  • Two parents, one child - $13,746.

The institute also came up with estimates of health care insurance costs incurred by households based on income. It found that those in the lowest 10% income bracket, with an average cash income of $18,686, will pay an estimated $726 in healthcare insurance this year, while those in the highest 10%, earning $286,808 on average, are projected to pay $41,916.

Those in the middle decile, with an average cash income of $75,300, were estimated to be paying $6,521 for public health care insurance.

The authors also estimated that the cost of public health insurance for the average Canadian family rose by 177.6% between 1997 and 2021. That rate, they said, was 3.4 times as fast as the increase in costs paid for clothing over the same period; 2.2 times as fast as the cost of food; 1.7 times as fast as the cost of shelter; and 1.6 times faster than average income.

The estimates of healthcare costs paid, the report noted, should be treated with caution because of the limitations to the data. One caveat, it highlighted, was how estimates of income and total taxes for various types of Canadian families have been warped by the economic response to COVID-19.

“The estimates of the total tax bill for families in 2021 … do not account for deficits, which will have to be paid for by taxes on future generations,” the report stressed.