Trump has repeatedly praised Canada’s health-care system, which has a very similar structure to Medicaid, as offering a model for the United States to emulate. However, the reforms proposed in both the House and the Senate bills would in fact bring Medicaid even closer to the structure of Canada’s health-care system — only with a far more generous level of funding.
.. Canada’s federal funding system was established in 1957, with the national government providing one dollar for every dollar that provinces spent on hospital and physician services. By the 1970s this arrangement was widely recognized to be causing costs to soar, and the Liberal prime minister Pierre Trudeau reformed this “Canada Health Transfer” so that provinces would receive a fixed annual allocation from the national government.
.. The U.S. Medicaid matching payment to states ($344 billion, or $1,071 per American, in 2015) already well exceeds the Canadian block grant to provinces (US$26 billion, or US$716 per Canadian) — even though the Canada Health Transfer is supposed to cover Canadians of all ages and income levels, whereas Medicaid is dedicated to 21 percent of the U.S. population with low incomes.
.. U.S. federal taxpayers spend an additional $646 billion on Medicare, and $122 billion on other health entitlements such as CHIP or VA — yielding total federal health-care entitlement spending of $3,461 per capita.
.. Canada is not getting more value for money; it is just getting fewer services. Canada’s federal payment doesn’t cover prescription drugs; only hospital and physician services are paid for. Canada also saves money by rationing operating-room time and the ability of physicians to order costly services.
.. Nor does Canada pay significantly less for its physicians than the United States; it just limits access to the expensive ones. In 2010, family physicians earned incomes (net of practice expenses) averaging $159,000 in the United States and US$156,000 in Ontario, while cardiologists averaged $325,000 in the United States and US$283,000 in Ontario. According to the World Bank, the United States has 2.45 and Canada 2.07 physicians per 1,000 inhabitants, while the United States has 0.55 specialist surgeons per 1,000 and Canada 0.35.
.. Waiting lists save lots of money because some patients get better by themselves, others give up seeking care, and a substantial number die before receiving treatment.
.. the allocation of federal payments by open-ended matching has caused funds to be distributed according to how much states can themselves afford to put in. As a result, the states that need help the least received the most assistance. In 2015, Connecticut collected $12,240 in federal Medicaid funds per resident under the poverty line, whereas Alabama received only $4,070.
To keep funds from being captured by the richest states (which generally use them to expand eligibility to wealthier individuals who mostly already had private coverage), it therefore makes sense to cap the increase in funding that each state is able to claim from the federal government every year.
.. The Canada Health Transfer currently increases the funds received by each province at a standard rate of 3.0 percent every year. By comparison, the House GOP’s proposed reform would limit the annual increase in federal payments claimed by each state to a statistic that has increased around 7.0 percent for spending on the aged and disabled and 4.9 percent for that on able-bodied adults and children