Article published in the National Post, November 18, 2000, p. D-11
Strangely, or perhaps conveniently, the political debate on public health insurance has ignored the system’s fundamental feature: private insurance (other than complementary insurance for uninsured public services) is forbidden by law. For reasons we will see, many people don’t believe this, or don’t believe it matters. Let’s look at a sample of provincial health insurance laws adopted in the late 60s or early 70s.
– Ontario Health Insurance Act, section 14, subsection 1, titled “Other insurance prohibited”: “Every contract of insurance … for the payment of or reimbursement or indemnification for all or any part of the cost of any insured services … performed in Ontario for any person eligible to become an insured person under this Act, is void and of no effect in so far as it makes provision for insuring against the costs payable by the [Ontario Health Insurance] Plan and no person shall enter into or renew such a contract.” Non-government insurance is only permitted for non-insured services. “Insured services” are defined in section 11.2(1) as “prescribed medically necessary services” which are paid for by OHIP.
– Alberta Health Care Insurance Act, section 17, subsection 2: “An insurer shall not enter into, issue, maintain in force or renew a contract or initiate or renew a self-insurance plan under which any resident or group of residents is provided with any prepaid basic health services or extended health services or indemnification for all or part of the cost of any basic health services or extended health services.” As defined by subsection 1, “self-insurance” basically means private insurance. An exception is made in subsection 4 for supplementary insurance “over and above the benefits payable by the Minister.”
– Québec Health Insurance Act, section 15, subsection 1: “No person shall make or renew a contract of insurance or make a payment under a contract of insurance under which an insured service is furnished or under which all or part of the cost of such a service is paid to a resident or a deemed resident of Québec or to another person on his behalf.” The definition of “insured service” (sections 1 and 3) amounts to prohibiting non-government insurance for anything insured by the monopolistic public system.
Provincial laws grant a monopoly to their health insurance plans by forbidding concurrent types of insurance. The monopolistic character of the public health insurance system is mandated by the federal Canada Health Act and preceding legislation, which created this cartel of provincial monopolies. The official justification is that monopolistic health insurance is less expensive. In reality, the absence of competitors (private insurance firms, HMO, unions, cooperatives) hides the system’s inefficiencies and blurs the distinction between its redistributive and its insurance components. Medicare ideologues also believe that that less-and-equal is better than more-but-less-equal for everyone.
Most public health systems in the West (the United Kingdom is one exception) also have a monopolistic character. The Canadian system’s originality lies in the scarcity of specialized private clinics (and “private” often means “run by private doctors,” not “owned by for-profit corporations”), and in the absence of for-profit general hospitals. Canadians are blessed with the Western world’s most nationalized health care system. Compare with, say, the French system, where prohibition of private insurance coexists with a diversified and thriving for-profit private hospital sector.
In fact, Canadians have the ultimate two-tier system. Very wealthy individuals can pay out of their own pockets to be treated at top-rated U.S. private hospitals. This is exactly what independently wealthy former Premier of Québec Robert Bourassa did, although he had once declared that health care and profits were incompatible. People with the right connections can also jump the queues in the public system. Jean Chrétien is treated at the National Defence Medical Centre, and Allan Rock would certainly not wait months to see his preferred specialist or be admitted to his favourite public hospital. The rest of us have been forbidden for three decades to make private insurance arrangements that would have given us what only the rich and the rulers get.
The prohibition of non-government health insurance is sanctioned by fines and jail terms (see, for example, the Alberta Health Care Insurance Act, section 38). This is why no private insurer, or no cooperative, offers basic health insurance in Canada. Such illegal businesses could not get bank loans, make public offerings on stock exchanges, etc. Because, at the end of the day, after the judges have issued their rulings, the armed men of the state would be there to enforce the prohibition. Monopolistic health care insurance is not only about compassion and brotherly love.
One solution to the present mess – call it the French solution – would allow public insurance holders to be treated in the public or private clinics or hospitals of their choice (up to the cost of public facilities), and remove the political and regulatory obstacles to the development of a private health care industry. A better solution – the English solution – would decriminalize non-government health insurance, and allow the development of private clinics and hospitals staffed by private doctors and financed by private insurance. Only a couple of articles in provincial laws need to be abrogated. The public system would remain for those who want it, as the Québec Chamber of Commerce proposed in the mid-80s.
National standards (or, should we say, the national substandards) would have be modified to permit this. Better, the feds could get out of health care, and give us the money back.
People accept our ultimate two-tier health insurance monopoly because they are addicted to the state. The youngest have been born with medicare cards in their mouths. Many others cannot imagine a world without state health insurance. As Auberon Herbert, British MP in the late 19th century, wrote, “If government half a century ago had provided us all with dinners and breakfasts, it would be the practice of our orators today to assume the impossibility of our providing for ourselves.” Real solutions will have to wait until we have broken our addiction to the state, and discovered that prohibition and force are not the most efficient solutions to human problems.