I am an emergency room registration clerk.
Short answer to your question: yes, most red and white cards are invalid now.
Long answer to your question: A patient comes in with a red and white health card. I run the card, like every card, though the ministry of health. They reply with a code that indicates whether or not that card is valid. Most of the time in reply to the red and white cards we get a code that translates to “This card is invalid. We’ve sent them a notice about it that they’ve ignored. We’ll take the card today, but we now reserve the right to cancel their health coverage completely if the don’t deal with this in the next 48 hours”. This doesn’t mean they will cancel your health coverage in 48 hours, but they can.
If your card comes back with the code that reads “ineligible for health coverage”, probably because you’ve ignored that notice for too long or you’ve gotten flagged for that 48 hours and still didn’t go to Service Ontario, you can still be seen by a doctor. A clinic can probably turn you away, but an emergency room can’t. You become what is called a Self-Pay Canadian. All that means is that you get seen by us, then you go to Service Ontario and get your stuff sorted out…. and if you don’t we send you a massive bill (akin to what you would see from a hospital in the States).
Addendum: Jan 06 2016 So I did receive a letter from the Ontario Government about upgrading my health card. The process was pretty simple. Canadian citizenship document, driver’s license, credit card and the old health card is required. There are alternative docs that are also ok. There is no charge, and it takes only a few minutes, not including standing in line. I guess the new card will come in the mail on a couple of weeks. The old card now has a small circular hole in it, along with a document saying that it is still valid. With these two I am still covered. A month later the new card arrived, with my B&W photo. My picture was not as bad as I thought.