Ironically, both the United States and Canada have publicly funded health
insurance programs with the same name. But whereas the American"
Medicare" was enacted in 1965 to cover people aged 65 and over,
the Canadian "medicare" was adopted in 1984 to cover all
Canadians. Canadian medicare was the product of several decades of
In 1947, Saskatchewan was the first province to establish public universal
hospital insurance, and 10 years later the government of Canada passed
legislation to share in the cost of these services. By 1961 Canada's 10
provinces and two territories had public insurance plans that provided
universal access to hospital services.
Beginning in 1962 Saskatchewan again took a pioneering step by providing
insurance for physician services. In 1968 the Canadian government began cost
sharing of physician services, and by 1972 all provincial and territorial
plans had been expanded to include these services.
In 1984 the Canada Health Act was passed. It reinforced and fine-tuned the
criteria, or basic principles, of a national public health insurance program
that had been spelled out in earlier legislation.
Today Canadian medicare covers most medical procedures provided by either
hospitals or physicians, including prescription drugs delivered in the
hospital. No copays are charged. Canadian medicare is both national and
provincial. The federal government sets national standards, but the insurance
is administered by each province (see Canada's Health System Draws Mixed
Reviews From Psychiatrists for more on Canada's medicare program).
All provinces cover inpatient and outpatient psychiatric care. The federal
government does not mandate coverage of these services, but the provinces have
elected to cover them.
Under medicare, physicians negotiate fees at the provincial level.
Agreements can last from two to three years. The provincial government is the
Although medicare does not mandate coverage of out-of-hospital prescription
drugs, each province has the option to set up outpatient prescription drug
coverage. For example, in Quebec, everyone must have prescription drug
coverage. All employees are insured by a private insurance company; the
unemployed receive their coverage through a government plan. In Alberta,
people can obtain outpatient prescription drug coverage through a provincial
plan. People with moderate or high incomes pay something for this coverage;
people with low incomes do not.
Provinces maintain their own drug formularies, although efforts are under
way to institute a common formulary. There is ongoing controversy in Canada,
as in other countries, about the inclusion of expensive drugs in drug
formularies and about whether not-yet-approved drugs should be reimbursed
under certain circumstances.
Drug costs are contentious. Prices are controlled by the Patented Medicines
Price Review Board. Its pricing formula ensures that Canada pays prices based
on the average of those charged to selected countries; they are neither the
highest nor the lowest. Older, off-patent medicines are typically somewhat
more expensive than those in the United States.
Aside from mandating universal health insurance coverage, the Canadian
federal government exerts considerable control over health care finances and
delivery. For example, there are only publicly funded hospitals. Physicians
are not allowed to have private-paying patients for covered services.
Government funds medical schools to a large extent, so that it exerts
substantial control over physician education (and ultimately the physician
Nonetheless, Canadian health care is not altogether"
socialized" medicine. For instance, many physicians are
self-employed; physicians can bill patients directly for services not covered
by universal health insurance, such as eye exams, and laboratory services are
often provided by for-profit companies. ▪