Finance Minister Carole James is beginning to phase out Medical Services Plan premiums, which accounted for 17 per cent of B.C. health care spending in the past year. (Tom Fletcher/Black Press)

End is near for B.C. medical premiums

Break of $900 a year for average working couple, other taxes going up

The B.C. government takes its first step toward eliminating Medical Services Plan premiums on Jan. 1, slashing single adult rates by half and eliminating the need for new residents to register.

The NDP government is implementing an election campaign promise first made by the B.C. Liberals, who tinkered with Canada’s only user fee for medical services for years before announcing plans to phase it out last spring.

The Canadian Taxpayers’ Federation calculates that the reduction will save an average household with two adults $900 per year, and applauds the NDP government’s promise to eliminate MSP entirely within four years.

Kris Sims, B.C. director for the CTF, notes that the MSP break will soon be offset by tax increases, including the first increase in five years to B.C.’s carbon tax. That tax rises to $35 per tonne of carbon dioxide emissions as of April 1, translating to an increase from seven to 8.5 cents on a litre of gasoline and more than 10 cents per litre on diesel fuel.

Finance Minister Carole James announced in September that the NDP government is going beyond the 50-per-cent cut to MSP promised by both parties in the May 2017 election. She said the B.C. Liberal pledge to apply the rate cut only to those with household incomes below $120,000 is “unworkable,” and announced plans to scrap the income-tested application form.

Single adults with income above $26,000 and couples with two children earning more than $35,000 will still have to pay the reduced rate in 2018, on a sliding scale based on household income.

Phasing out MSP leaves a large hole in the province’s health care budget. The finance ministry estimated last year that income from medical premiums covers 17 per cent of health costs, by far the largest operating expenditure in the B.C. government, and James has yet to say how the revenue will be made up.

Eliminating MSP also means the phase-out of its administration and bill collection, which was contracted out to U.S.-based back-office specialist Maximus Corp. in 2005. Maximus took over existing administration staff represented by the B.C. Government Employees’ Union, and had to add more staff after B.C. assessed penalties on the contractor for slow service to the public.

The NDP has long opposed MSP as an unfair tax that has the same rate for people earning $45,000 and $450,000 a year. For government and large corporation employees, it is generally a payroll tax paid by their employers, while self-employed and small business workers have to pay it out of pocket.

BC legislatureHealthcare

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

‘Someone knows something’: a look into Vancouver Island missing persons with interactive map

There are more than three dozen people listed as missing throughout Vancouver Island

Parksville soccer player invited to elite soccer academy in Portugal

Wylee Franks aspires to become a professional player

Provincial COVID-19 data can now be used for B.C. to prepare for a second wave

In the past week, B.C. has seen a slight spike in daily test-positive case counts

Qualicum Beach volunteer Mark Watson honoured for 30 years of service at fire hall

‘He has such a good spirit in everything that he does’

Islanders want BC Ferries to follow order that lets residents board before tourists

For ferry-dependent communities, ferries are often the sole practical lifeline to work, school or medical appointments.

B.C. Ferries increasing passenger capacity after COVID-19 restrictions

Transport Canada 50-per-cent limit being phased out, no current plans to provide masks

Comox’s Kassidy Stewart takes Miss Teen BC title

She is set now to compete in nationals this summer

Shopping resumes aboard Nanaimo ferry sailings

B.C. Ferries reopens gift shops on Queen of Cowichan and Queen of Oak Bay

Genetic detectives begin work to trace spread of COVID-19 in Canada

The kinds of genetic technology being used for this project did not exist when SARS hit Canada in 2003

Amber Alert for two Quebec girls cancelled after bodies found

Romy Carpentier, 6, Norah Carpentier, 11, and their father, Martin Carpentier, missing since Wednesday

Island Health provides Baby Beds for infants

A safe place for baby to sleep is key to reduce sleep-related deaths

Sports fishers protest Fraser River Chinook closures

Public Fishery Alliance wants hatchery fish open for harvest

Most Read