Canada and the United States of America are two neighboring countries that originally had health care systems that were mostly alike. This changed in the 1960s, when Canada and the United States started on separate paths toward solutions to the growing cost of health care. While both countries rely on private practices for the provision of care, the difference between the two lies in their policies regarding health care insurance. Overall, health insurance is managed and administered more by the government than private companies in Canada; however, in the United States health care insurance is handled largely by private companies. The direction each country has taken has had a measurable impact on the cost of providing health insurance for their citizens.

Health Insurance in Canada

Since the 1960s with the passing of the Hospital Insurance and Diagnostic Services Act and the Medical Care Act, Canada's health insurance system evolved toward the National Health Insurance model of insuring its citizens. The Canada Health Act of 1984 led to the creation of a government-managed health insurance program. Known popularly as "Canadian Medicare," this is a program in which the majority of health care costs are paid for by taxpayers and the government rather than private insurance companies. The exception to this is dental services, which are paid for either out-of-pocket or by private insurance companies. Under the Canadian Medicare system, insurance coverage is managed by the governments of the provinces, each of which has variations on their rules of coverage. For instance, citizens of one province may or may not be covered in another. While the Canadian federal government mandates a basic set of medical services to be covered by all provinces, coverage of some procedures, such as eye care or long-term care, are left to the discretion of the individual provinces. Private insurance is free to cover procedures not paid for by taxpayer-funded insurance plans. When it comes to prescription drugs, the federal Medicare system only covers drugs given to patients in a hospital. Publicly funded coverage for prescription drugs for outpatient services or people at home is left to the discretion of the provinces, whose policies and co-pays vary.

Health care in Canada typically costs less per person than it does in the United States. According to a study by the Organization for Economic Cooperation and Development (OECD) suggests that Canadians pay up to 50 percent less than Americans for care. Their average yearly expenditure is around $4,400 per month according to the OECD. Health care is cheaper for physicians in Canada as well. Canadian doctors also save money because they spend less time pursuing payment for their services than American doctors. As a result of this efficiency, they spend $60,000 less per year than American doctors to get reimbursement. While American doctors deal with a multitude of government agencies and an even greater number of insurance companies and their different rules, Canadian physicians face just one set of procedures for receiving compensation.

Health Insurance in America

The United States of America has consistently followed the Out-of-Pocket model of health care insurance, with notable exceptions. Soldiers tend to be covered under a military insurance program called TRICARE for active duty soldiers and the Veterans Health Administration for veteran soldiers. Both VHA and TRICARE are taxpayer-funded health insurance programs. Seniors over 65 years of age and those who are defined by the government as disabled are typically covered by the United States version of Medicare, a taxpayer-funded health insurance program. State governments have their own state-run version of Medicare, called Medicaid, and each of the 50 states has its own rules for qualification. The majority of the population, however, is either covered by private insurance, or is uninsured if they cannot afford private insurance. Over half of all Americans who have private insurance rely on receiving coverage through their employers, although some workers also have no coverage, especially those who work part-time, temporary workers, and the self-employed. Many unemployed citizens cannot afford coverage, and are thus uninsured. Dental care is mostly covered by private insurance in the United States, although some states have dental care plans, such as California's Denti-Cal program. Like with medical insurance, each state that covers dental care, has its own rules regarding coverage. Typically the requirements are that the recipient be poor or have certain disabilities and special needs. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows people who lose their jobs or who switch jobs, to keep their employer-supplied health insurance.

The costs involved in maintaining America's health insurance system reflects its complexity. At over $8,000 per person, Americans pay the highest average annual price in the world, for health care. This is more than $3,000 above the per capita expenditure in the next most expensive country, which is Norway. Health care consumes over 15 percent of the United States economy, while it consumed less than 10 percent of other OECD nations' economies on average. Part of the reason why costs in America are so high is because many uninsured citizens wait until they face a medical emergency and must go to the emergency room for care. Another reason is that in the United States, an average of over $800 is spent per person on administrative costs. Like Canada, health care costs in the United States are growing faster than inflation. 44 million Americans were uninsured as of 2008, partially because of the cost of insurance. Because physicians in the United States spend so much time and money pursuing compensation for their services from government agencies and insurance companies alike, a small percentage of doctors only accept cash for payment. A handful of other doctors refuse to care for patients who have Medicare, citing the cost of dealing with the insurance program. The advantage for the United States health care system is that those who can afford care, have lower waiting times for elective, non-emergency care. The United States also gives patients access to high-tech care that isn't always available in Canada.

Conclusion

The difference between health insurance coverage in the Canadian and United States is that Canada's health insurance system is more centralized. United States citizens rely more on private insurance than Canadians do. There are some similarities between the two systems, however, such as the lack of government coverage for dental insurance. Canada's move toward a more single-payer system has coincided with lower health costs per person and less costs for physicians.

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