Changes to MSP premiums

The provincial government has recently announced changes to its much-debated medical services plan.

The provincial government has recently announced changes to its much-debated medical services plan (MSP).

While children will no longer be charged MSP premiums, most adults will now pay more as MSP rates increased by about four per cent earlier this year.

A few days before releasing the 2016/17 provincial budget, premier Christy Clark called the current MSP “antiquated,” signaling that perhaps bigger changes could be expected in the next few years.

“Here is the thing about the MSP system: is it is antiquated, it is old, and the way people pay for it generally doesn’t make a whole tonne of sense,” said Clark. However, the B.C. premier said it will take a while longer to make significant changes to the MSP. “I think in terms of wholesale change though, it’s going to take a little longer for us to work through some of that,” she said.

British Columbia is the only province that charges premiums for health services. In most provinces, medical premiums are paid as part of one’s income tax. This means that the amount paid in other provinces for medical premiums rises along with a person’s income.

Critics say the current MSP is unfair, as residents who barely make ends meet have to pay the same flat rate for healthcare as someone who is wealthy.

“When we continue to rely on regressive taxes like this, it is easy to see why British Columbia has one of the highest poverty rates in Canada,” said Andrew Weaver, Leader of the B.C. Green Party.

And the truth is that a significant number of British Columbians are struggling to pay their MSP premiums. Documents recently obtained by the Canadian Taxpayers Federation through a freedom of information act request revealed that more than 850,000 MSP tax payments are at least 31 days past due.

Keith Baldrey, Chief Political Reporter for Global News B.C., pointed out that according to Statistics Canada, the median income in B.C. in 2013 was $30,500, which means take-home pay for many hovers around $2000 a month.

“When you factor in other annual increases to the cost of living – B.C. Hydro rates, ICBC rates – you can see how onerous a load the MSP premiums have become for many British Columbians,” he said.

Baldrey adds that the past few years have seen annual increases of about four per cent in MSP premiums. When the B.C. Liberals came to power in 2001, MSP premiums generated less than $1 billion to the government’s budget; next fiscal year, they are forecast to contribute more than $2.5 billion.

With a four per cent increase in personal rate and growing population, the government expects to collect more MSP each year of its three-year budget plan than with the current system. The B.C. Green Party recently presented an online petition at the B.C. legislature calling for an end to MSP premiums. As of Feb. 22, more than 68,000 British Columbians had signed the petition. The NDP opposition has also called for MSP premiums to be eliminated as a regressive tax.

“The premier could have made this budget about tax fairness, but she chose to just tinker around the edges of the MSP tax, which amounts to little more than a shell game,” said New Democrat Leader John Horgan.

With such strong opposition to the MSP, and the province’s premier herself calling it antiquated, it might just be a matter of time before we see the end of MSP premiums in B.C.