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FIN 512 (27)
Chapter 6

Chapter 6.docx

14 Pages

Course Code
FIN 512
Giulio Iacobelli

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Chapter 6: Health Care This chapter is the first of the three that addresses life and health risks. These risks are addressed by: - Health care plans for the provinces and territories - Income protection plans - Life insurance, and - Retirement plans, which are not covered in this textbook There are three sources of health care benefits which are summarized in Table 6.1: 1. Government plans 2. Group plans through employers or associations 3. Individual plans Sources of Coverage Risk Plans Through Employers Government Plans or Associations Individual Plans Health Care Provincial and Group Insurance Individual plans such as (Chapter 6) Territorial Health Plans Blue Cross Travel Insurance Long-Term Care Insurance Income Workers Group disability Disability insurance Protection Compensation insurance Critical illness (Chapter 7) Employment Insurance insurance Canada Pension Plan disability benefits Life Canada Pension Plan Group life insurance Individual politics: Insurance death benefit Key person insurance Term (Chapter 8) (maximum $2500) Whole Life Universal Life Segregated Funds Retirement Canada Pension Plan Registered Pension Registered Retirement Income retirement benefits Plans (RPP) Savings Plan (RRSP) Old Age Security Deferred Profit Sharing Individual Pension Program which Plans (DPSP) Plans (IPP) includes Old Age Supplementary Security Pension (OAS) Retirement Account and Guaranteed Income (SRA) Supplement (GIS) Government Health Insurance Plans: Canadians have the benefit of universal health care- health care coverage available to all residents of a province or territory Background: - T.C. (Tommy) Douglas is known as the father of Medicare born in Scotland, and settled in Winnipeg - Douglas came close to having a leg amputated due to a bone infection since his family could not afford a specialist however, a surgeon offered to operate it for free if his students could attend the surgery, thus saving his leg and his life (this is said to be the formation of his dream of universal health care) Hospital Insurance Plans: - By the 1920s, Saskatchewan was providing treatment and free hospitalization for tuberculosis patients - Under Douglas, the Saskatchewan CCF passed the Saskatchewan Hospitalization Act to provide free hospital care (universal hospital care) in 1946 - Limited provincial hospital insurance plans followed in B.C. and Alberta - In 1957, the federal Hospital Insurance and Diagnostic Services (HIDS) Act funded 50% of the cost for any jurisdiction that adopted a universal hospital insurance plan - The HIDS Act contained 5 conditions that are also the requirements of the current Canada Health Act: public administration, comprehensiveness, universality, portability, and accessibility Health Care Plans: - In 1961 the federal Conservative party under John Diefenbaker created a Royal Commission on Health Services, led by Supreme Court Justice Emmett Hall - In 1964, his report, the Hall Report, recommended a national health care plan- a joint federal/ provincial system to cover the costs of preventative health care services and hospital care for everyone - In 1966, the federal Liberals under Lester Pearson introduced the Medical Care Act of 1966, which once again paying 50% - Provinces and territories started charging users fees and allowing extra billing or, in the case of Ontario, paid 90% of the Schedule of Benefits amount in order to fund increasing medical costs - In 1980, the Health Services Review, again under Emmett Hall, recommended putting an end to user fees and extra billing - In 1984, the federal government passed the Canada Health Act (CHA), which mandated 5 criteria for the health plans and banned extra billing and user fees Canada Health Act (CHA)- Provincial and Territorial Health Plans - The Canada Health Act is Canadas federal health insurance legislation - The act sets out the primary objective of Canadian health care policy: To protect, promote, and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers. - Our system is based on the principle of universal health care for residents of provinces and territories, comes under provincial jurisdiction, and is based on the Canada Health Act that sets out the minimum criteria that provinces and territories must meet: 1. Public Administration. The plan must be administered and operated on a non-profit basis by a public authority accountable to the provincial or territorial government. 2. Comprehensiveness. The plans be comprehensive- it must cover all health services provided by hospitals, physicians, or dentists (i.e., surgical-dental services that require a hospital setting) and, where the law of the jurisdiction so permits, similar or additional services rendered by other health care practitioners. 3. Universality. All of the province or territorys residents must be covered by the plan based on uniform terms and conditions. Provinces and territories generally require that residents register with the plans to establish entitlement, usually as evidenced by having a valid health card. Newcomers to Canada, such as landed immigrants or Canadians returning from other countries to live in Canada, may be subject to a waiting period not to exceed three months as set by a province or territory before they are entitled to receive insured health services. 4. Portability. Converge must be portable form one province to another, i.e., you are never not covered while in Canada. The waiting period from province-to-province must not exceed three months. In addition, the following applies: a. Residents temporarily absent from their home province or territory or from Canada must continue to be covered for insured health services during their absence. i. This does not entitle a person to seek services in another province, territory, or country. ii. It is intended to permit a person to receive necessary services in relation to an urgent or emergency need when absent from Canada temporarily, such as on business or vacation. b. While temporarily absent in another province or territory, insured services are paid at the host provinces rate- the rate in the jurisdiction where the patient needs treatment. c. While temporarily out of the country, insured services are to be paid at the home provinces rate- the rate where the patient normally lives. (Note: This is where the problem arises when travelling in, for instance, the United States, where the costs are significantly higher.) d. Prior approval by the health care insurance plan in a persons home province or territory may also be required before coverage is extended for elective (non-emergency) services to a resident while temporarily absent from his or her province or territory. This means that if someone goes to the United States for a hip replacement, for instance, he or she needs prior approval from the home provinces plan, which may reimburse either the homes provinces rate or the full cost. 5. Accessibility. The same services must be provided for all residents in a province or territory so that insured persons have reasonable access to insured hospital, medical, and surgical-dental services on uniform terms and conditions, unprecluded or unimpeded, either directly or indirectly, by charges (user charge
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