Up to 40,000 international students not paying into B.C. health care system

While MSP fees are being fully diverted from residents to businesses under the Employers Health Tax on Jan. 1, 2020, roughly 90,000 international students enrolled in MSP at the moment will still be required to pay the fee – the same as the old Medical Services Plan fee before it was phased out in 2017 – for regular access to public health care services.

“What we’re doing now is re-establishing a contribution from those international students,” said Dix.

The government has made a conservative estimate that this will raise about $70 million per year. But there is a discrepancy between how many international students B.C. says are presently enrolled in MSP and how many long-term study permits are delegated to the province.

There were about 134,000 international students with study permits in B.C. as of Dec. 31, 2018, according to Immigration Refugees and Citizenship Canada (IRCC), which is not able to say exactly how many visas are long term. IRCC does state a “vast majority” of student visas are long term. Of the 282,350 study permits issued between 2015 and 2018, 273,925 were long term (97%), meaning for six months or more, which would trigger mandatory MSP registration requirements for residents. Based on this ratio there would have been an estimated 130,000 long-term international students in B.C. as of Dec. 31, 2018.

So, what accounts for an MSP enrolment gap, which the ministry acknowledges?

First, it’s understood from B.C.’s largest university, the University of British Columbia that, per its website, “anyone living in BC for six months or longer (including international students) is required by law to enrol in MSP and pay the plan’s premiums.” And Simon Fraser University, the province’s second largest university, makes a similar statement online.

However Michael Olson, executive director of the Canadian Federation of Students B.C. chapter, said the likely explanation for the gap is a failure of institutional and government oversight. Olson said universities and colleges routinely fail to follow up with international students to see if they are enrolled.

“It’s not consistent across institutions; they’re not provided the forms. They’re just kind of told they have to,” said Olson, adding the extended health care programs institutions offer often mislead international students into believing they’re fully covered.

And there’s no follow-up from the provincial government.

This could mean upwards of 40,000 uninsured students are not paying into the system, presenting a liability should they be seriously injured.

However it’s unlikely, based on available information from the ministry, that an unenrolled student would have to pay a large hospital bill if he or she can prove residency. One MSP customer service representative Glacier Media spoke to said the student would simply have to register for MSP and pay their fees retroactively for MSP to reimburse the hospital. The representative said MSP runs largely on the honour system.

Should 40,000 international students remain unenrolled in 2020 the government would lose $36 million in revenue.

B.C. remains one of the few destinations in Canada in which international students are enrolled in public health care; Ontario, Quebec (with exceptions for some countries of origin), Manitoba, Prince Edward Island, Yukon and Northwest Territories – comprising 65% of international students with study permits in Canada – do not extend public health care insurance to international students. Only Saskatchewan and New Brunswick unconditionally enrol international students in public health care. Meanwhile, Alberta, Nova Scotia, Newfoundland and Nunavut provide health care for students in or beyond their second year of studies. These six other jurisdictions represent only 11.3% of the study permits currently issued in Canada while B.C. accounts for just under one quarter.

“I think we’re pretty much along the lines of what it would cost you as a student in Ontario, Manitoba or Quebec if you are going to seek private care,” said Dix on a conference call with media Thursday. “The idea that there would be no contribution, which would have happened if we had just eliminated the premiums, I don’t think makes sense,” he said.

Ontario students are required to enrol in the University Health Insurance Plan managed by Sun Life Assurance Company, which charges an annual premium of $636 (compared to B.C.’s $900 annual premium). The UHIP premium appears to cover all Ontario Health Insurance Program services but caps costs at $1 million and some expenses require approval from the company.

Dix said the B.C. approach is “balanced” but acknowledged it is “debatable” how to measure true costs for international students. He said the fee approach is “balanced” and setting up something such as UHIP would be cumbersome.

Based on 2016 data from the National Health Expenditure Database that pegs the province’s per capita annual health costs for the 20-24 age group at $2,048, the province’s 130,000 such students would cost $266 million per year – much lower than the $81 million 90,000 students would pay into MSP annually, or the $70 million estimated by the ministry.

MSP was a tax on residents that accounted for a small portion of health care spending. For instance, the last year of $75 MSP monthly premiums, in 2016-17, amounted to $2.5 billion whereas the overall health budget was $17.9 billion. The rest of the money mostly comes from general revenue derived from sales and income taxes.

In 2016, about 145,000 total (103,000 long-term) international students in B.C. paid $248 million in indirect taxes and $252 million in personal income taxes, providing total tax revenue of $500 million, according to Global Affairs.

Olson’s BCFS is vocal about international student tuition fees it says are too high. For instance, they typically pay five times the rate as domestic students. BCFS points to economic activity stirred up by these students. For 2015, BCFS claimed 26,000 jobs were created as a result of international students, who spent about $3.1 billion in B.C. The group claims higher costs will stifle interest in the programs, however demand, and admissions allowed by the federal government, has continued to surge in recent years, with some observers citing the lure of immigration as the reason.

While the BCFS is not pleased with the amount of fees international students must pay to enrol in B.C. schools, the health care fee announcement at least means international students, plus their dependants, will still have the option to enrol in B.C.’s health care system, said Olson.

And, “I’m hopeful that now that it’s a mandatory fee implemented by the institution, that the institution will have authority to have that paper work filled out. But we’ve yet to see what kind of plan that will be,” added Olson.

The ministry says it is working with stakeholders, such as institutions, to roll out administration of the new fee, but details are unknown at the moment.

By implementing the new fee Dix also shored up a loophole that had allowed elementary and high school students free public health care for the past two years (while still registered for MSP, presumably). He said an unintended consequence of government moving to a family fee in 2017 meant those international students without parents living in B.C. were not charged MSP fees. There are about 20,000 K-Grade 12 students in B.C., said the ministry.