Lifetime distributional effects of publicly financed health care in Canada : Effets redistributifs du financement public des soins de santé au Canada : analyse sur une durée de vie

Publicly financed health care provides access to a package of valuable core services to all Canadians--services that provide necessary care when needed and help improve the health and well-being of Canadians. In addition to being a valuable public service, publicly financed health care plays another role that is often overlooked: it redistributes income among different socio-economic groups. In effect, how much different population groups pay for health care through various mechanisms, such as income taxation, and how much they receive back in terms of services vary. As a consequence, health care financing may affect the income of population groups differently. Since health care represents a large and growing part of public-sector spending (35% of total provincial and territorial expenditure in 2011), it is important to consider the redistributive effects of publicly financed health care in Canada. This analysis estimates how publicly financed health care expenditures and associated tax payments vary across income groups. In this study, we estimated what happens to the distribution of income after taking the value of benefits received from publicly financed drugs, hospitals and physician services into account. This analysis is novel in that we estimated the distribution of health care expenditures and tax payments over the life course of Canadians and compared results with a more common approach that looks at the effect on one year only. A life course approach incorporates the fact that those in higher-income groups tend to live longer and therefore benefit from publicly funded health care services over a longer period.