Legislative and Administrative Regulation of Voluntary Health Insurance in Canada

Abstract

BY the end of 1953, approximately half of the Canadian population was insured in some degree against the costs of hospital or medical care. This protection is obtained through a variety of agencies-commercial insurance companies, the so-called voluntary prepayment plans sponsored by the provincial hospital and medical Associations, co-operatives, industrial plans, and the government in British Columbia, Alberta, Saskatchewan, and Newfoundland. It has been found necessary, as in other similar activities, to exercise legislative and administrative supervision of the activities of the non-governmental agencies to assure their operation in the public interest. In view of the remarkable variety of agencies providing medical and hospital care insurance, it is not surprising to find provincial enabling legislation equally remarkable for diversity in type and major provisions, as well as for the frequently contradictory interpretations to be found from province to province. The inconsistency of the pattern of legislation in Canada resembles, in fact, the variety of legal provisions to be found in corresponding state legislation and rulings in the United States.' The legal status of prepaid medical and hospital plans is largely affected by the issue of whether their services constitute The decision on this question is important because if medical and hospital care plans were legally regarded as insurance and dealt with as such, they would be liable to the stringent supervision and legal and financial requirements embodied in provincial and federal insurance legislation. The wide variety of views held concerning the classification of the operations of the medical and hospital care plans in Canada would seem attributable to the variety of interpretations of the word insurance. The opinion that prepayment plans do not constitute insurance emphasizes the idea that the essence of an insurance contract is indemnity for some loss, and the indemnity is payable in money. The hospital and medical care plans on the other hand are regarded in the nature of contracts for services. Furthermore, the hospital and medical care agreements with the subscriber do not undertake to pay him money *This article is based on a chapter of Professor Taylor's forthcoming book, The Administration of Health Insurance in Canada. 1Louis Reed, Blue Cross and Medical Service Plans (Washington, 1947), chaps. vii and xvIIm; Nathan Sinai, Odin Anderson, and Melvin Dollar, Health Insurance in the United (New York, 1946), chap. Iv; Edward Holmann and George Cooley, Voluntary Health Insurance in the United States in (1950) 35 Iowa Law Review 183-208; Horace Hansen, Laws Affecting Group Health Plans, ibid., 209-36.