Opinion: Time to take MSP off life support

Green Party leader Andrew Weaver right about rolling MSP premiums into income tax

The B.C. Liberal government made a big show of selectively easing Medical Services Plan fees in its budget for the coming election year.

In what is becoming a pattern for Premier Christy Clark, the biggest beneficiaries are single parents. The new MSP is calculated for adults only, so a single parent with two children saves as much as $1,200 a year.

Premium assistance is expanded, with discounts for single people making up to $42,000, rather than $30,000. But for singles, couples and seniors who don’t qualify for discounts, the rate is going up another four per cent effective Jan. 1, 2017.

Indeed, with population growth, the finance ministry expects its take from MSP premiums to rise every year, reaching $2.5 billion in the coming years.

MSP revenue covers about 17 per cent of B.C.’s health budget, and Clark and Finance Minister Mike de Jong insist that Canada’s only direct health care charge is a vital signal to people that health care isn’t free.

This argument has failed.

One seldom-discussed fact is that for half of the people charged MSP, it’s paid by their employers. In private sector terms it’s a hefty payroll tax, creating one more obstacle for businesses to hire full-time staff with benefits.

So most full-time employees don’t receive this supposedly vital signal, unless they get laid off because their employer is losing money.

Also note that politicians and public sector employees have never paid MSP premiums. Their employers, taxpayers, pick up the tab for them.

People who have to pay out of pocket are what the bureaucracy calls “pay direct accounts.” Jordan Bateman of the Canadian Taxpayers’ Federation recently revealed that nearly 400,000 of these accounts are currently in arrears by more than 30 days, owing a grand total of $457 million.

Of course this is Canada, so even if you haven’t paid or even registered for MSP, you still get treatment at the hospital. Another potential signal lost in the noise.

For people who lose their jobs, MSP is like being kicked when they are down. Their employer stops paying, and the slow-moving bureaucracy charges them based on their income from the previous year.

There was a fuss in 2004 after the B.C. Liberals contracted out MSP administration to a Virginia-based back-office specialist, delightfully named Maximus Corporation.

Now Maximus goes after delinquent MSP accounts with collection agency tactics, and attempts to keep up with the comings and goings from other provinces and countries.

Opposition parties decry the continued inequity of the MSP premium system, which charges the same for a single person making $45,000 or $450,000 a year.

NDP leader John Horgan rails about inequality and accuses Clark of using MSP revenues to establish her prosperity “slush fund,” but he stops short of calling for the elimination of MSP premiums.

One would expect the NDP to lead another “axe the tax” campaign, as they did with the carbon tax and the HST, but they aren’t. Perhaps this is because workers for this unnecessary Maximus machine remain members of the B.C. Government and Service Employees’ Union.

Green Party leader Andrew Weaver has it right. He staged a popular petition drive to roll MSP premiums into income tax. If the government wants to send a message, it can interrupt its continuous “Jobs Plan” advertising.

Scrapping MSP and raising income tax rates on higher brackets to compensate would fix the private sector payroll deterrent, make salaried employees (including me) pay their share, and end a tax break for the wealthy.

Don’t hold your breath.

Tom Fletcher is B.C. legislature reporter and columnist for Black Press. Email: tfletcher@blackpress.ca

 

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