Canada Health Act

The Canada Health Act (CHA) is a Canadian federal legislation, adopted in 1984, which specifies the conditions and criteria with which the provincial and territorial health insurance programs must conform in order to receive federal transfer payments under the Canada Health Transfer. These criteria require universal coverage (for all "insured persons") for all "medically necessary" hospital and physician services, without co-payments.
The CHA deals only with how the system is financed. Because of the constitutional division of powers among levels of government, adherence to CHA conditions is voluntary. However, the fiscal levers have helped to ensure a relatively consistent level of coverage across the country. Although there are disputes as to the details, the CHA remains highly popular.
In popular discussion, the CHA is often conflated with the health care system in general. However, the CHA is silent about how care should be organized and delivered, as long as its criteria are met.
Another cause for debate is the scope of what should be included as "insured services". For historical reasons, the CHA's definition of insured services is largely restricted to care delivered in hospitals or by physicians. As care has moved from hospitals to home and community, it increasingly has been moving beyond the terms of the CHA. International data shows that approximately 70% of Canadian health expenditures are paid from public sources,[1] placing Canada below the OECD average.[2]
The key battles around the CHA, however, concerned the question of charges to insured persons for insured services. These were termed 'extra billing' when they referred to physician care, and 'user charges' when they referred to hospitals. The policy debate was a long-standing one. Health care differs from many consumer goods to the extent that it is allocated on the basis of need. If someone who needs care is not to be denied it on the basis of ability to pay, providers often find themselves providing charity care. A guaranteed payer can thus benefit both patients and providers, to the extent that there are no longer bad debts.[3] But a single payer has monopsony buying power and can enforce cost control on providers should it care to do so. Should this power be abused, providers may be under-paid for their activities, face restrictions on their clinical judgement, and so on. The optimal situation for providers is thus the ability to rely upon the guaranteed payer for those unable to pay, while retaining clinical autonomy and the ability to charge more to others. For patients and payers, however, this may present issues around access, equity, and cost control. The debate about the extent to which payers could control providers has been a constant theme in the Canadian health care debate, with extra billing and user fees being a frequent topic.