The debate over health care reform in the United States has drawn Canada under the microscope. Canada's health care system is frequently offered as a model for American national health insurance. Curiously absent from this policy discussion is any talk about the relative out-of-pocket costs of alternative models. In this paper, we provide data on these costs for American and Canadian elderly for medical, hospital, and ambulatory pharmaceutical use. Despite the fact that the elderly in America are generally viewed as facing fewer problems with access and out-of-pocket costs than younger Americans, their direct costs far exceed those of their Canadian counterparts. We also present data suggesting that, despite these greater costs, rates of growth in use of these services by American elderly have followed roughly the same pattern as those found in Canada. If Uncle Sam retired north of the border, being old and sick would also mean being wealthier and happier.

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