Improving Access to Canadian Health Care: The Role of Tax Policies

The Conference Board of Canada, 78 pages, May 26, 2016
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This research assesses several Canadian fiscal and tax policies related to health care. It examines their role in providing access to uninsured or underinsured health care services, and their costs in terms of foregone federal revenues.

Document Highlights

Equitable and timely access to essential health services, products, and programs helps ensure population health and wellness in Canada, which leads to a healthier workforce. Despite our predominantly publically funded health care system, out-of-pocket costs—such as those for dental care and prescription drugs—pose a significant financial burden for many Canadians, particularly elderly, low-income, self-employed or unemployed people.

Governments have recognized a need to alleviate out-of-pocket costs for health care through fiscal or tax policies. This research assesses several of these, including the medical expense tax credit and the children’s fitness tax credit. It examines their role in improving access to uninsured or underinsured health care services, and their costs in terms of foregone federal revenues. It also discusses the potential impact of implementing a health-related tax deduction in Canada. All in all, it is unclear whether health-related fiscal policies can be leveraged to improve access to health care.

Table of Contents

EXECUTIVE SUMMARY

Chapter 1–What Are Fiscal Policies in Health and Health Care?

Chapter 2–The Medical Expense Tax Credit

  • The Relationship Between METC Use and Income
  • Who Uses the METC?
  • Costs of the METC
  • Easing the Burden on Low-Income Canadians: The Refundable Medical Expense Supplement

Chapter 3–Children’s Fitness Tax Credit: Lessons Learned for Health Services?

  • Who Uses the CFTC?
  • Costs of the CFTC
  • Lessons for Health Services

Chapter 4–Refundable Health Tax Credit: Recommendations of the Advisory Panel on Health Innovation

  • Costs of the Refundable Health Tax Credit

Chapter 5–Tax Deductions for Health in Canada

Chapter 6–The Implications of Making Employee Benefits Taxable

Chapter 7–Implications for Fiscal Policy

  • Alleviating the Burden of Non-Insured and Underinsured Health Care With Tax Credits and Deductions
  • Fiscal Policies: Equity Implications and Opportunity Costs
  • Taxing Employer-Paid Benefits: Not a Simple Solution
  • Changing the Structure of the METC to Increase Access and Improve Equity
  • Limitations
  • Next Steps

Appendix A–Health Care-Related Tax Credits

Appendix B–Usage of Tax Credits

  • Medical Expense Tax Credit
  • Children’s Fitness Tax Credit

Appendix C–Bibliography

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