February 18, 2003

What's a Wealthy Senior?

The Campbell government has yet to release all of the details for its new Pharmacare scheme, but Health Minister Collin Hansen let slip that those who qualify for MSP premium assistance will be eligible. That means a couple who are both over age 65 will lose their Pharmacare coverage if they have a family income over $33,000.

There are five levels of MSP premium assistance ranging from full subsidy, for those with an "adjusted" family income under $16,000, to 20% subsidy for those with an "adjusted" family income under $24,000. Adjustments are $3,000 for each person over age 65, $3,000 for each disabled person and $3,000 for each dependent. So a family of two both of whom are over 65 would get $9,000 in adjustments and would receive at least 20% subsidy if their family income was under $33,000 ($24,000 plus $9,000). Note that the calculation is done on the previous year's income because it is necessary to have proof by way of a completed income tax return.

Canada Customs and Revenue Agency releases annual data on individual tax returns, but family income data is harder to obtain. Statistics Canada reported that in year 2000 the median income for senior husband-wife families, those in which at least one person was aged 65 or over, rose to $39,400. Keep in mind that median is not the same as the average; it is the point where half are above and half are below, the midpoint.

It looks like just over half of BC's seniors will lose Pharmacare benefits under the "Fair Pharmacare" program. Government argues that other low income people will receive more benefits while wealthy seniors receive less. An elderly couple living on $35,000 per year probably don't consider themselves to be wealthy. There has been no public discussion on where or how the line should be drawn for the new income test. There may be a big surprise when the Campbell government says what it thinks is wealthy.