Scrap MSP?

[Popeye69]

So do we honestly think that if we drop the MSP the provincial government wont get their pound of flesh? The day its scrapped is the day they increase provincial income tax. Remember the HST rape? Government always gets their money... just ask ICBC.
Now for people who's employers pay their MSP its gonna hurt. They now will pay it in income tax and the people who will "supposedly" be saved will still end up paying. It will end up being yet another break for "the man" and a burden for Joe taxpayer.
That's my take on it.... What's yours?

[GordonH]

So do we honestly think that if we drop the MSP the provincial government wont get their pound of flesh? The day its scrapped is the day they increase provincial income tax. Remember the HST rape? Government always gets their money... just ask ICBC.
Now for people who's employers pay their MSP its gonna hurt. They now will pay it in income tax and the people who will "supposedly" be saved will still end up paying. It will end up being yet another break for "the man" and a burden for Joe taxpayer.
That's my take on it.... What's yours?

The other Provinces that don't charge MSP monthly premium, get the funding from income taxes. So yes if BC drops monthly premium they to would do the same... just dropping 1 tax and increasing another one.

[jayro]

I think it should be rolled into income tax somehow obviously we cannot just scrap it as our our province's finances are a mess (I don't buy any of Christy's BS by the way) but something needs to be done why are we the only province that pays this? I also don't understand why it is increasing again if our province is running a huge surplus like they say we are ???

[Even Steven]

...but something needs to be done why are we the only province that pays this?

Newsflash - they all pay for it. Just in a different form. For some it's part of income taxes, for us it's straight up fee. Twelve of one, dozen of the other. We all pay for it one way or the other.

[GenesisGT]

Other provinces do charge an extra fee/tax/premium whatever you want to call it.

Ontario and Quebec have premiums. Manitoba and Newfoundland have a payroll tax.

http://www.normandin-beaudry.ca/userfiles/file/Aide-memoire-2012_Quickfacts_2012_EN.pdf

And lets not forget Nunavut, the farmers dozen now thirteen.

[Veovis]

I think it should be rolled into income tax somehow obviously we cannot just scrap it as our our province's finances are a mess (I don't buy any of Christy's BS by the way) but something needs to be done why are we the only province that pays this? I also don't understand why it is increasing again if our province is running a huge surplus like they say we are ???

I think the one difference is that MSP is direct Healthcare funds, and income tax becomes general revenue. Yes you could simply earmark more from general to healthcare, but straight taxes would also have the detrimental effect of moving employer paid MSP fees to the people who it is paid for, and that is a lot. Not you have to then factor that maybe it needs to be a blended payroll deduction which brings in piles of other calculations and effects that will help and hurt people accordingly.

The concept of "get rid of MSP and raise taxes on the rich" sounds great as a news bite, but the actual tax act changes and calculations would be a very complicated process.

I'm not saying I'm against changing the route things work, just that it is far far more complicated than people would like.

[Hassel99]

So do we honestly think that if we drop the MSP the provincial government wont get their pound of flesh? The day its scrapped is the day they increase provincial income tax. Remember the HST rape? Government always gets their money... just ask ICBC.
Now for people who's employers pay their MSP its gonna hurt. They now will pay it in income tax and the people who will "supposedly" be saved will still end up paying. It will end up being yet another break for "the man" and a burden for Joe taxpayer.
That's my take on it.... What's yours?

What hst rape?

Are you one of the people who voted against it becouse it felt bad without understand it was a benefit to bc?

[Rosemary1]

Obviously scrapping MSP is unrealistic. Who will pay for health care? It’s either MSP, taxes or going to private insurance. We have seen how well that works elsewhere for those with lower income or no employer coverage or those with serious medical conditions.

A billing system that takes annual payments at time of income tax filing can streamline process and save administrative costs. Rates would still be calculated on income based formula and do not need to represent an ‘additional’ tax. Yes rates may go up over time but that is regardless of the system in place. Controlling health costs and premium will continue to be challenge no matter what insurance system is in place.

MSP is still one of the better medical insurance plans compared to many countries.
Ideally it may be helpful as a start if Canada Health Accord could also define national common standards for medical treatments covered under all provincial insurance plans. Next could be similar standards for prescription drug coverage under provincial extended health insurance plans.

[hobbyguy]

The funding will come from somewhere. For a 50K earner, BC income taxes are the lowest at 7.7%. The next lowest is Alberta, 10%. Quebec is at 20%.

If we were to scrap MSP and go to income tax:

1) a LOT of funding currently supplied by corporations/companies who pay MSP premiums on behalf of employees would be transferred to regular folks.
2) our income tax rates would jump, likely to roughly what Manitoba pays, 12.75% for the 50k bracket.

Maximum cost to a 50k earner for MSP = $1,800
Extra income tax if we scrap MSP, (12.75 - 7.7%) x 50k = $2,525 (rough estimate)

The difference is point 1 above.

(Note: Manitoba has significantly higher income taxes on higher earners and yet at 50k must charge higher rates than BC.)

Good luck getting companies/corporations to increase wages to compensate for the lost benefit...or actually paying more income tax to help out...

Be careful what you wish for.

[flamingfingers]

hg wrote:

1) a LOT of funding currently supplied by corporations/companies who pay MSP premiums on behalf of employees would be transferred to regular folks.

Corporations/companies deduct MSP premiums from your gross pay per pay period/month - it is a taxable benefit and is reflected as part of your gross income. Therefore, you do in fact PAY MSP premiums through your work - employers deduct this amount from your gross pay and send MSP a cheque - all it does is save you the trouble of writing a cheque to MSP every month:

Premiums under provincial hospitalization, medical care insurance, and certain Government of Canada plans You may be paying premiums or contributing to a provincial or territorial hospital or medical care insurance plan for an employee. The amount you pay is considered a taxable benefit for the employee. Report this benefit in box 14, “Employment income,” and in the “Other information,” area under code 40 at the bottom of the employee’s T4 slip.

http://www.cra-arc.gc.ca/E/pub/tg/t4130/t4130-16e.pdf

[Veovis]

Corporations/companies deduct MSP premiums from your gross pay per pay period/month - it is a taxable benefit and is reflected as part of your gross income. Therefore, you do in fact PAY MSP premiums through your work - employers deduct this amount from your gross pay and send MSP a cheque - all it does is save you the trouble of writing a cheque to MSP every month:

This is most assuredly not how the taxable benefit works. The employee does not pay the premium. Some plans may have the employee pay a portion and the employer pay a portion but all companies I know pay the premium at 100% with no cost to the employee other than the tax ramifications which are a fraction of the cost.

[Urbane]

I don't agree with flaming at all but I think what she's saying is that there is no such thing as a benefit from the employer because the employer is simply paying less in salary to compensate for the benefit. She's used the same argument previously about sick days saying that the employees pay for the sick days and not the employer. I'd like her to tell us, then, why unions negotiate these benefits if they don't actually benefit their members.

[flamingfingers]

^^Sigh....:

Other Permitted Deductions
An employee may request that certain amounts be
paid directly to a third party.
Upon receiving written permission from the
employee, an employer must make deductions for
medical premiums; extended health or dental
coverage; charitable donations or pension plan
contributions if the amounts are tax-deductible; and,
maintenance payments under the Family Maintenance
Enforcement Act.

http://www2.gov.bc.ca/assets/gov/employ ... s_wage.pdf

If the employee does not give written permission, they must make medical premium payments individually. Most employees given written permission so they don't have to write a cheque to MSP every month.

Because it is NOT legal requirement for an employer to pay an employees' MSP, you can be sure that the shareholders in the company would hold a necktie party for any CEO who told them their 1,000 employees were receiving a hundred bucks a month in benefits 'out of the goodness of their hearts!'

[Urbane]

^^ Sigh all you want but you haven't answered my question. Nor have you countered the points made by others. I'm not opposed to looking at better ways to collect the money currently collected by way of the MSP premiums but we need to be careful that the "improvement" isn't one step forward and two giant steps backward.

[Lady tehMa]

I'd rather have it taken out of income tax.

Notice how after 30,000 everyone pays full? But below that everyone gets breaks.

Here we have a more even distribution.