Understanding Canada’s single payer healthcare system
Canada operates under a single-payer, publicly funded healthcare system called Medicare, ensuring that all citizens and permanent residents have access to medical services without direct charges at the point of care. Canada's Medicare is often confused with the American Medicare system, but the two are very different.
Canada's Medicare model emphasizes universal coverage and equal access to healthcare services and is supported by federal legislation in the form of the Canada Health Act.
How is universal healthcare paid for in Canada?
Canada's universal healthcare system is primarily funded through taxation. Approximately 70% of total health expenditures are publicly financed, while the remaining 30% comes from private sources, including private insurance and out-of-pocket payments.
In 2023, Canada's total health spending was projected to reach $344 billion, equating to about $8,740 per Canadian. This represents approximately 12.1% of the country's gross domestic product (GDP) — the total value of all goods and services produced within a country's borders over a specific period — positioning Canada as a leading spender among countries associated with the Organization for Economic Cooperation and Development (OECD).
The federal government contributes to healthcare funding through the Canada Health Transfer (CHT), which provides financial support to provinces and territories. In 2023, the CHT accounted for about 21.5% of public health spending. The remaining public funding is generated by provincial and territorial governments, which cover approximately 78% of healthcare costs.
Healthcare expenditures are distributed across various sectors, with hospitals receiving 26%, drugs 14%, and physicians 14% of total spending.
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Get A QuoteHow does America’s healthcare system differ?
Unlike Canada's single-payer system, where healthcare is primarily funded by the government through taxes, the US operates a multi-payer system dominated by private insurance companies.
However, the country does provide public forms of healthcare by way of:
- Medicare: Covers seniors (65+) and some disabled individuals (covers about 65 million people).
- Medicaid: A state-federal program for low-income Americans, covering around 87 million people.
- VA (Veterans Affairs): Provides healthcare to eligible military veterans.
Unlike Canada's single-payer system, where every resident is covered, the US system requires individuals to either obtain private insurance or qualify for government programs.
Has America enacted laws to expand healthcare coverage?
"Obamacare" is the nickname for the *Affordable Care Act *(ACA), a law passed in 2010 under President Barack Obama. It was designed to expand access to health insurance and make healthcare more affordable for Americans, especially those who were uninsured.
Before the ACA, many people struggled to get coverage because insurance companies could deny coverage for pre-existing conditions or charge very high premiums.
The ACA doesn’t create a Canadian-style universal healthcare system, but it reduces barriers to getting health insurance.
However, Trump has been adamant about repealing the ACA, telling the American population he has “concepts of a plan” during his debate with former Vice President Kamala Harris back in September of 2024.
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Start Trading TodayWhich government spends more on healthcare?
One of the biggest criticisms of the US system is its high cost.
According to the Centers for Medicare & Medicaid Services US health care spending grew 7.5% in 2023, reaching USD$4.9 trillion or USD$14,570 per person. As a share of the nation's GDP, health spending accounted for 17.6% — the highest of any developed nation.
The US total health care spending sits in stark comparison to the CDN$344 billion spent by the Canadian government. To appreciate the difference, each Canadian pays CDN$8,740 (USD$6,026) per year. Compare this to the average annual cost for an American of CDN$21,131 (USD$14,570).
What do Canadian and American citizens spend on healthcare annually?
Health insurance in the US is mostly tied to employment. This mean that losing a job often results in losing health coverage. It's a situation that can leave people in financial distress.
In 2023, 26 million people — or 8% of the American population — were uninsured, according to a report from the United States Census Bureau.
Additionally, according to the Commonwealth Fund 2024 Biennial Health Insurance Survey, 23 % of Americans are underinsured, meaning they had coverage for a full year that didn’t provide them with affordable access to healthcare.
While both Americans and Canadians can pay out of pocket for medical expenses, the USA has an average cost of USD$1,425 (or CDN$2,065) compared to CDN$1,189 (USD$820) per person in Canada.
Examples of when Canadians would have to pay out of pocket for healthcare include:
- The service is not covered by public or private insurance such as virtual telemedicine appointments
- They are not eligible for publicly funded coverage
- They have a deductible or co-payment for things like prescription drugs
- They are responsible for completing forms and medical records — like doctor’s notes
- They are a non-resident of Canada
However, most provincial and territorial governments do offer and fund supplementary benefits for certain groups like low-income residents and seniors. This includes drugs prescribed outside hospitals, ambulance costs, as well as hearing, vision and dental care that are not covered under the Canada Health Act.
Canadian vs. American attitudes towards healthcare
A 2024 survey by The Economist/YouGov found that 54% of Americans have an unfavourable view of the US healthcare system, while only 36% view it favourably.
High expenses are a major issue, with many Americans struggling to afford care. A 2023 survey highlighted that cost was the most common barrier preventing people from accessing healthcare, at 61%.
Meanwhile, a poll from 2024 indicated that 91% of respondents blame health insurance companies for problems within the healthcare system, citing practices like claim denials and prior authorization requirements.
However, things are not much rosier north of the border, with a 2024 Ipsos poll revealing how 48% of Canadians are dissatisfied with provincial healthcare, while almost two-thirds (65%) of Canadians believe Canada should emulate the French or Swedish healthcare system that allow private entrepreneurs to manage publicly funded hospitals.
Sources
1. Canadian Medical Association: How is health care funded in Canada?
2. Centers for Medicare and Medicaid Services: National health expenditures data
3. United States Census Bureau: Health insurance coverage in the United States: 2023
4. The Commonwealth Fund: The state of health insurance coverage in the U.S., by Sara R. Collins, Avni Gupta (Nov 21, 2024)
5. Peterson-KFF: Health system tracker: Out-of-pocket spending
6. Government of Canada: Canada's health care system
7. YouGov: Health care, the transition, the economy, Hunter Biden, and crypto: December 8-10, 2024 Economist/YouGov Poll
8. Time: Exclusive: More than 70% of Americans feel failed by the health care system, by Jamie Ducharme (May 16, 2023)
9. Newsweek: Americans Are Souring on the Health Care System, by Aila Slisco (Dec 11, 2024)
10. Ipsos: Less than half (48%) of Canadians are satisfied with their provincial healthcare system – The same result as last year (Spr 11, 2024)
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