Private Health Insurance in Canada

Returning to Canada for Christmas, I was surprised to see that the country’s life and health insurers were lobbying the government for health savings accounts and pressing ever closer for the right to compete against the failing state monopoly on health insurance (a.k.a. so-called “single-payer” health care).

Today, I was surprised to see a 3/4 page advertisement for health insurance in the Globe & Mail, Canada’s “national newspaper” (somewhat, very roughly, akin to the offspring of a drunken mating of the New York Times and USA Today). The insurer is the Canada Protection Plan.

Canadian businesses have always offered supplemental health benefits to their employees, underwritten by private insurers. This is legal as long as the benefits don’t compete against the medical and hospital insurance that the state promises (but often fails to deliver). Therefore, prescription and dental coverage are the standard employer-based benefits in Canada.

What surprised me about the newspaper advertisement is that I don’t recall seeing private, supplemental, health insurance marketed aggressively to individuals when I lived here. (I left Canada in January 2004.) The policies advertised are cash indemnity for terminal illness and hospitalization, as well as prescription and dental coverage.

My key point here is that these policies are underwritten: those who don’t smoke, or are not obese, pay lower premiums. In the U.S., we’d call these “pre-existing conditions”, and both Mr. Obama and the U.S. health insurers’ largest trade association, AHIP, want to outlaw such underwriting.

But even in Canada – “ground zero” of single-payer health care – folks understand that you can’t have health insurance that fills in the cracks of the government’s failed “system” without underwriting.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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