Publicly Financed Health Care in Canada: Who Pays and Who Benefits Over a Lifetime?

Canadian Institute for Health Information, May 2013


All Canadian taxpayers contribute to publicly financed health care, regardless of their use of the system. Publicly funded health care services are available to all on the basis of need, regardless of ability to pay. When we look at the relationship over a lifetime, only the most affluent (the top 20%) contribute significantly more to health care than they receive. For other income groups, the value received from publicly funded health care is approximately the same as or more than the value of taxes paid to fund those services. The redistributive effect of publicly funded health care in Canada is a 16% reduction in the income gap between the highest- and lowest-income groups. Without the publicly financed health system, the lowest-income Canadians would be at risk of going without needed health care or of being impoverished by paying for it.

This report from Canada demonstrates one of the more important functions of a well designed single payer system. To ensure access while preventing impoverishment, financing must be redistributive, because health care costs are unaffordable for moderate and low income individuals and families. Not only does the redistributive financing ensure universal access, it also ameliorates, to a limited extent, the impact of the worsening Gini coefficient (measure of income inequality).