Medical services plan premiums are going up — again — this time by 4%, or $3 a month, to $78 a month for individuals.
However, the province will reduce monthly MSP payments for families with children and is extending premium assistance to more people by increasing the income cut-off.
The 4% increase will provide $101 million to government coffers by the 2017 fiscal year.
Rolling MSP payments into the income tax system, an option some critics have said would be fairer and save the government money, isn't on the table, said Finance Minster Mike de Jong during a briefing on the provincial budget, because the current system reminds British Columbians that health care isn't free.
Families with children will no longer have to pay a monthly fee for the children, meaning a single parent of two children would save $864 a year.
Currently, only individuals and families who make up to $30,000 can qualify for MSP assistance. The government has raised that to $42,000 for single people, $45,000 for families and couples, and to $51,000 for couples who are seniors.
Documents recently obtained by the Canadian Taxpayers' Federation show the province is owed nearly $500 million in outstanding payments, which are collected via a third party company.
B.C. is the only province to collect health care payments via a separate fee. Most other provinces fund health care via general income tax collection. Ontario charges a premium, but collects it through the income tax system, an arrangement which involves entering into an agreement with Canada Revenue Agency. Adopting Ontario's system would cost the government less in administrative costs, Lindsay Tedds, a professor of economics at the University of Victoria, told Business in Vancouver in a January interview.
It also allows the system to be more progressive, meaning higher income earners pay more than those who make less money; under B.C.'s new premium assistance rules, an individual who makes $45,000 a year will still pay the same as someone who makes $150,000.
“There is no question that there may be improvements that can be made in the realm of collection,” de Jong said. “There may be approaches to this that can import notions of progressivity.”
But de Jong maintained that the existing stand-alone payment system is preferred for its educational aspect.
“It's a stark reminder to people that this is a cost we incur as a society and is in the realm of our provincial budget,” he said.
