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.

Just Posted

Snowy winter meant high costs: LDM

Rapid melting could cause floods

Houston Fire Department working harder

The Houston Volunteer Fire Department has seen a significant increase in the… Continue reading

Houston athlete trying out for regional girls’ team

Zone 7 girls’ team is first in eight years

Winter road maintenance standards boosted

Quicker response times, longer winter tire season to be implemented

HVAC overhaul to continue this summer

Upgrades at Houston Secondary School (HSS) are a long-time coming, according to… Continue reading

Toronto van attack suspect faces 10 counts of first-degree murder

The suspect in the Toronto van attack that killed 10 people and injured 15 others on Monday is a 25-year-old man named Alek Minassian

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Small aircraft touches down on Calgary street

The twin-engine plane was apparently short on fuel forcing an emergency landing

Issues split Trump and Macron, handshakes and kisses aside

Donald Trump and French President Emmanuel Macron professed a sunny, best-friends relationship

How hospitals prepare for mass-casualty incidents

Code Orange alerts explained following the Toronto van attack

Jury to deliberate after Cosby painted as predator

A jury of seven men and five women are to decide actor Bill Cosby’s fate

Memorial to victims of Toronto van attack continues to grow

The subway station where a van was used to run down pedestrians has reopened in Toronto

B.C.’s living wage increase curbed due to MSP cuts, child care subsidy: report

Living wage varies between $16.51 in north central B.C. to $20.91 in Metro Vancouver

Doctor sees healing power in psychedelic plant as Peru investigates death of B.C. man

Peru’s attorney general has ordered the arrest of two suspects in the killing of 41-year-old Sebastian Woodroffe

Most Read