February 16, 2016 5:52 pm
Updated: August 4, 2016 10:10 pm

Government increase exemptions for MSP premiums, but raise rates for others

WATCH: This year's provincial budget contained reductions in MSP premiums for some British Columbians, but increases for others. Tanya Beja explains.

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MSP premiums are going down for single parents and low-income adults, but going up significantly for others.

That’s the takeaway from a significant reform of the system, one that changes the amount virtually everyone in the province will be paying beginning in 2017.

“I believe the rates, and certainly the adjudged rates, are fairer than the ones that have been in place,” said Finance Minister Mike De Jong.

“When you reduce as we have the costs…to someone at the lower end, there is an impact elsewhere.”

Relief offered by the government for premiums came in two different ways:

  • The calculation of premiums no longer include children, meaning every single parent family will see reduced rates. As one example, a single parent with two children who makes over $48,000 will see their premium reduced from $150/month to $78/month, a savings of $864 a year.
  • Previously, all individuals making at least $30,000 pay the same rate. That limit has been raised to $42,000, and anyone making between $22,000 and $42,000 will pay a pro-rated amount in premiums. As one example, a person making $35,000 will see their premium go from $75/month to $58/month.

(The government has created a calculator for people to find their new rate, which can be found here.)

The basic amount individuals and couples with children will pay is rising by four per cent, as expected, from $75/month to $78/month.

WATCH: Finance Minister Mike de Jong announces the B.C. Liberal government’s plans for MSP.

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However, couples without children and senior couples, who will pay a basic rate of $136/month, will pay $156/month next year – an increase of $240 from one year to the next.

It means the amount of money the government will receive from MSP premiums will continue to rise, from $2.43 billion this fiscal year to an estimated $2.55 billion in 2016/2017.

“Rolling premiums into a progressive tax structure is the kind of sharing economy British Columbians really need,” said Hospital Employees Union secretary-business manager Jennifer Whiteside.

“Instead, B.C. stands alone in collecting more than $2.5 billion in unfair health premiums.”

The government defended the increases, saying it means all adults will pay the same amount of $78/month in 2017 regardless of their age or dependents.

“I’ve heard the argument, and actually accept the principle around attempting to inject more elements of [progressive rates] into the MSP scheme. When you reduce the costs that accrue to someone at the lower end, there is an impact elsewhere,” said De Jong.

“The big change here, is that two adults will pay twice the individual rate. That is true, they will, which translates into $10 more per person. A whole host of other people and other families are going to enjoy some significant benefits.”

MSP premiums have been heavily criticized by both the NDP and the Canadian Taxpayers Federation in recent weeks, who argue it should be included within people’s income tax.

“Forget the nonsense about kids being exempt from MSP – this is a tax hike, plain and simple,” said Jordan Bateman, B.C. Director of the Canadian Taxpayers Federation, in a statement.

“The B.C. government had an opportunity to fix the MSP system and help make life more affordable and they blew it.”

But that idea was forcefully rejected by De Jong.

“Whatever your view on MSP premiums, they are the opposite of the hidden tax. It’s a hidden tax where you hide it elsewhere,” he said.

“It may be politically attractive to create the impression that MSP premiums don’t exist, or disappear, but of course they do. The $2.4 billion that we receive in MSP premiums will need to come from somewhere. I’d rather be as open and honest with British Columbians as possible by disclosing what they are paying and what purpose they are paying.”

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