Medical necessity, Infertility, and the Taxpayer

Since Ontario’s announcement to fund one round of IVF treatment costs, there have been a number of articles written how this procedure is not medically necessary and should not be covered by taxpayers. There are things, though, that you should know before jumping on this band wagon.

The Canada Health Act provides for the transfer of funds to the provinces for their health care insurance programs for services that “are medically necessary for the purpose of maintaining health, preventing disease or diagnosing or treating an injury, illness or disability.” The Act, however, does not define what it means by medically necessary services. Instead, what is deemed to be medically necessary is defined in each province.

The medical community, backed by the World Health Organization, recognizes and defines infertility as a disease. Because it is defined as a disease, diagnostic and management of the disease is medically necessary in their opinion. This means that the failure to cover IVF is not a medical decision but rather a policy decision.

As we all know, Quebec considers IVF to be medically necessary and covers 3 rounds of IVF.

Ontario already considers IVF to be medically necessary; it just limits the procedure to some forms of infertility. In fact, Ontario used to cover IVF treatments until 1994. What happened was in 1993, the Royal Commission on New Reproductive Technologies showed that IVF was a medically proven treatment for women with blocked fallopian tubes and urged provinces to cover IVF treatment costs for these couples. It also recommended the IVF be provided for other forms of infertility and to continue to assess the effectiveness of this treatment in these cases. Ontario, in the face of sharp fiscal constraints at the time, used this decision to limit its coverage of IVF to only these women.

Of course, since 1994, IVF has been proven to be an effective treatment in the face of many causes of infertility. So much so that the Expert Panel on Infertility and Adoption recommended in its 2009 report that IVF be covered by the province. This recommendation, however, was ignored. The result is that Canada is one of few developed countries that does not fund infertility treatments. Currently, 15 US states have mandated fertility coverage by private sector providers and even providers not in these states will cover many fertility treatments, including IVF. You will find in their policies some statement that says that ART procedures such as IVF are considered both medically necessary for women with infertility and have been proven effective. The UK, Sweden, Australia, France, New Zealand, and Israel, to name a few, all provide IVF treatments to its citizens under a certain age. In fact, Israel is the world leader in IVF, with the highest rate of IVF in the world.

It is interesting that despite most provinces not funding IVF, it does fund many of the supporting costs associated with IVF, including diagnostics (like HSG, semen analysis, endometrial biopsy, various blood work, monitoring, etc.). In addition, many infertility treatments are already covered, including attempting to unblock fallopian tubes and embolization of varicocele. The result is that the out of pocket expenses from IVF is nowhere near as high as it is in non-mandated US states. In addition, it means an interesting state where some couples infertility is treated and managed through the provincial medical plan, whereas others are not. This leads to some interesting questions like: Why is varicocele embolization, the sole purpose of which is for fertility, considered medically necessary as a treatment for infertility, despite the lack of medical evidence as to its efficacy, but IVF is not, despite the abundance of medical evidence in support of its efficacy? Better yet, why is a vasectomy considered medically necessary? And more ironically, why is a woman with two blocked fallopian tubes allowed IVF access in Ontario but a women with one 100% blocked tube and the other 95% blocked, not?

The advantage of provinces considering IVF to be medically necessary as it means the treatment can be covered through the provincial health care plan. Something that Ontario has not yet actually committed to. The other route is to skirt the medically necessary debate and instead over financial support through the tax system. This is exactly what the Government of Canada and the Government of Manitoba does.

The Government of Canada allows the expenses incurred for IVF (actually all ART procedures) to be claimed through the medical expense tax credit, including both the procedure and fertility medications. This is a nonrefundable tax credit (valued at 15%), the caveat being that only expenses above a threshold are covered. The threshold is the lessor of $2,152 or 3% of net income. That is, if you earn less than $71733.33, you can claim a larger portion of your medical expenses. Median income in Canada is about $32,000. All medical expenses within a household can be pooled and claimed by just one taxpayer, preferably the one with the lowest net income but not so low that they are unable to benefit from the nonrefundable nature of the tax credit. Assuming that a round of IVF costs $10,000, the minimum level of taxpayer support for these expenses is $1,177.2. Since most claimants earn less than $71,733.33 it actually means most couples obtain much greater taxpayer financed support. I have yet to see those arguing against IVF under a provincial medical plan arguing against this taxpayer financed support.

The province of Manitoba also offers a Fertility Treatment Tax Credit. Manitoba covers 40% of the cost of IVF and related ART procedures to a maximum of $8000. Again, assuming that a round of IVF costs $10,000, Manitoba couples see an additional $4000 in support for their expenses.

The province of Quebec also have a medical expense tax credit but it is refundable. This means that those that obtain IVF treatments through the provinces medical plan get an added bonus of claiming the costs of the fertility medications through this tax credit.

The result is a rather curious, nonsensical, contradictory, and confusing landscape related to taxpayer support for IVF and related fertility treatments. Perhaps rather than another haphazard leap into the environment, Ontario and the other provinces should think clearly about the medical coverage and taxpayer support for infertility as a whole and bring a more cohesive response to this issue.

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