Provinces chip away at seniors’ health benefits

Senior Couple At Home With Bills Worried About Home Finances

If you are budgeting for retirement and you haven’t included a line item for escalating medical costs and long term care you could be in for a shock. Recent budgets in Alberta and Saskatchewan and a trial balloon floated by the New Brunswick government suggest that the writing is on the wall.

Sooner or later seniors could be paying more for health and end of life care. And there will continue to be a significant variance between the costs transferred to seniors across the country.

Here are some of the more recent developments that we are aware of:

Alberta

Premier Jim Prentice called an election for May 5th. But the province’s March 25th budget will surely be passed if the Conservative party is returned to power. The budget imposed a new Health Care Contribution Levy based payable through the income tax system that will cost each Albertans up to $1,000 per year.

Unlike the previous Alberta Health Care Insurance Plan premium eliminated after 2008 that was a flat fee for individuals, the levy has a progressive structure (See Table 1 below).  In addition, each member of a family filing an income tax return who has income over $50,000 will be subject to the levy and seniors are not exempt. This amounts to a new unprecedented tax payable by seniors in Alberta.

Taxable Income Annual Health Care Contribution Levy Payable
From To
$0 $50,000 No Health Care Contribution Levy
$50,000 $70,000 (Taxable Income – $50,000) x 5% to a maximum of $200
$70,000 $90,000 $200 + (Taxable Income – $70,000) x 5% to a maximum of $400
$90,000 $110,000 $400 + (Taxable Income – $90,000) x 15% to a maximum of $600
$110,000 $130,000 $600 + (Taxable Income – $110,000) x 15% to a maximum of $800

SOURCE: 2015 Alberta Budget

Saskatchewan

The 2015 Saskatchewan Budget lowers the income threshold above which individuals are not permitted to participate in the Seniors Drug Plan. While the current cap is $80,255, it will be lowered to $65,515 effective July 2015.

CBC news reports that lowering the income threshold will save the province $3M and disqualify 6,000 seniors formerly entitled to discounted prescriptions. People eligible for the drug plan pay a maximum of $20 per prescription for drugs listed on the provincial formulary.

New Brunswick

CARP reports based on a Tuesday March 24th discussion in the New Brunswick legislature during question period that it seems the government is floating a trial balloon on the introduction of “means testing” as opposed to “income testing” for seniors who need nursing home care.

A means test is a determination of whether an individual or family is eligible for government assistance based upon whether the individual or family possesses to means to do so without help.

The catch is that means testing takes both income AND assets into account, including the family home in its value which could mean seniors will have to mortgage or sell their home if one partner needs financial help for nursing home care.   Conversely, income testing only takes into account the individual or family’s income – using all streams of available income but leaving assets like the main family home in place.

Means testing is one of the major factors that results in differences in long term care service access from province to province. In addition, there are numerous other provincial differences in the way provincial long-term care has evolved, including different service amounts, types, and eligibility criteria. Differences in eligibility criteria and means testing may result in Canadians being denied services, or denied funding for services, in one part of the country that they would be able to obtain in another.

Those who support means testing will say that it is a mechanism for allocating scarce healthcare resources and stretching healthcare dollars. Each province must determine how to best serve its population with the resources it has at its disposal. One of the major difficulties is that when different criteria are applied in each jurisdiction, inequality of access can result.

 

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