Canada is known for its high-rated public healthcare system, but its interesting to know how it works and who is paying for our medical billing? Are all our medical services free as we know? It is not true. Let’s understand the basics of our healthcare system.
Canada has a decentralized, universal, publicly funded health system. Canadian Health care is funded and administered primarily by the country’s 13 provinces and territories. Each one has its own insurance plan, and each receives federal assistance too. Benefits and delivery approaches vary. All citizens and permanent residents, receive medically necessary hospital and physician services free. To pay for excluded or uninsured services, including outpatient prescription drugs and dental care, provinces and territories provide some coverage for targeted groups. It is believed that about two-thirds of Canadians have private insurances to cover the expenses related to uninsured services.
The Ontario Health Insurance Plan commonly known by the acronym OHIP is the government-run health insurance plan for Ontario. In Ontario, one needs a valid health card to get healthcare services covered by OHIP. Every Ontario resident with his or her primary and permanent home in Ontario is entitled to access emergency and preventive care under OHIP free of charge. However, it is important to be aware that OHIP covers only medically necessary and insured health services. There are many medical services that are not covered by OHIP. Ontario residents may go to a participating doctor—mostly every doctor practicing in the province, get insured services free and the services are billed through OHIP to the government. However, the question is- is it really FREE? and if it is free, who is paying for the Ontario Health Insurance Plan (OHIP)? So, the answer is- OHIP is the government-run health plan for Ontario, and it is funded by money from taxes paid by Ontario residents and businesses.
Most people are unaware of the fact that in Ontario, OHIP is funded by a payroll deduction tax by residents who are gainfully employed, by businesses in Ontario and by transfer payments from the Government of Canada. Hence, the health premium is paid by Ontario residents through the personal income tax system. Money collected through the tax helps fund Ontario's health services.
How is the health premium paid?
The health premium is paid by Ontario residents through the personal income tax system. Money collected through the tax helps fund Ontario’s health services. The health premium ranges from $0 if one’s taxable income is $20,000 or less, to $900 if taxable income is more than $200,600. One pays the health premium if he/she is a resident of Ontario, and their employment or pension income is more than $20,000 a year. In most cases the premium is automatically deducted from one’s pay or pension. It is included as part of the income taxes deduction on their pay stubs. If one doesn’t have taxes automatically deducted from the pay or pension, the premium is paid when he/she files annual personal income tax and benefit return with the Canada Revenue Agency (CRA). One doesn’t need to pay the health premium, only if his/her income is $20,000 or less.
Ontario Health Premium Rates-Data tracking the estimated Ontario Health Premium amounts paid by individuals. The premium ranges up to $900 if individual’s taxable income is above $20,000.
People who are self-employed or pay income tax instalments
If one is self-employed and making $20,000 or more a year, they pay the premium as part of their return. The premium is based on an individual’s taxable income, regardless of whether someone is married, divorced, separated or single. Those with higher health premiums can pay in instalments throughout the year. Instalment interest may be charged if the payments are not enough.
Individuals with Indian Status and Seniors
Those with certificate of Indian Status identity card, they pay the premium if their taxable income for the year was generated off-reserve and is more than $20,000.
Seniors receiving a pension of more than $20,000 a year, need to check with their pension provider to verify the premium is being deducted automatically with other taxes. If they receive income from sources that don’t deduct the taxes, they can request the health premium be automatically deducted from their pension, or Old Age Security (OAS) and Canada Pension Plan (CPP) benefits.
References:
5. OHIP
6. Govt of ON
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