Justin Trudeau’s transformation of the Liberals into the NDP continues apace, and I’m not just talking about their downward march in the polls towards territory traditionally occupied by the NDP, but also the government’s new insurance-based dental care program. The creation of the dental program was a condition of the Liberal-NDP confidence-and-supply agreement, and the NDP is of course crowing that they forced the Liberals to deliver it.
The ongoing cost to taxpayers was estimated in Budget 2023 to be $4.4 billion annually, with lower costs to begin because the program will be phased in. However, given the Liberals’ tendency to overspend what they originally budget by often astonishing margins, and especially because this is a joint initiative with the NDP, any cost estimate should be taken as a floor. It may well be much more expensive.
Indeed, one of the main effects of insurance in general is to drive up expenses: the most infamous example is American health care. When the insurance company pays, or the government pays, everybody is spending everyone else’s money — and therefore spending with far less care. Insurance is why American health care is so expensive, and the main reason Canadian health care may appear cheaper is in Canada the government either denies people medical care and gives them physician-assisted suicide instead, or offers them physician-assisted suicide but the patient may be rich enough to spend a lot of money to travel to the United States and pay for medical care there, or makes patients wait half a year or more before they are able to get medically necessary treatment under Canada’s “universal” system.
The problem with health insurance, and now increasingly dental insurance in Canada, is it makes no sense to insure against ordinary events. The purpose of automobile insurance is to protect people in the event of a major accident, but we do not insure against the possibility that the car will become dirty from driving in the snow, and then bill the insurance company for a car wash.
Why is it then that a check-up visit to a doctor’s office — or in the case of the new public dental care program, routine services like cleanings and fillings — is covered by insurance? The answer is, the government either provides the insurance (medical care) or gives significant tax incentives for employers to provide insurance (existing private dental care plans). The result is we are a country with far too much insurance and far too high costs, a problem about to get worse.
Moral hazard is yet another problem with the government’s dental insurance program. By protecting people against the costs of harmful behaviour, government will produce more of it. A great many dental problems are largely preventable: diligent toothbrushing, flossing, and avoiding sugary drinks reduces significantly the incidence of cavities and tooth decay. By socializing dental costs, the government dental program effectively will redistribute income from people who diligently brush and floss to people who neglect their oral health and consume large quantities of Coca-Cola. This is not wise.
A blog post by economists with the Fraser Institute (full disclosure: for which I also write), suggests one takeaway from the dental care rollout is it offers lessons for health care reform. The government, the Fraser economists say, “did not eliminate private insurance as was effectively done when universal health care was introduced. It did not nationalize dental facilities to minimize the private sector’s involvement in the delivery of dental care. And it did not bureaucratize the pricing of dental services.” It is an analysis undoubtedly correct. The government’s dental care plan is not nearly as bad and certainly less controlling than the government’s health care program. However, anyone who hopes the dental care plan might be used as a model to make government health care less awful is bound to be disappointed.
There is simply no reason to believe an economically illiterate government overseeing shambolic intervention A, will upon implementing new intervention B which is deleterious but not as bad as A, use B as a model to improve A. What we should expect is the reverse. Health care will not improve to be more like dental care, but instead, the Liberal-NDP dental program, already a bad idea to begin with, will almost certainly become increasingly worse to mirror Canada’s shambolic health care system. Dental care probably will not get quite as bad as health care: I do not foresee the government soon offering physician-assisted suicide to people on account of their tooth problems. But you never know.
Matthew Lau is a Toronto writer.