Canadians must pay 30% of healthcare costs directly from their own pockets.
This means that each province only pays for 70% of most people's healthcare costs.
Some individuals and families receive private health insurance through their workplace. This can be a relatively common thing in Canada.
Other individuals may choose to pay out of pocket for private health insurance. Depending on the plan or their health needs, this can be incredibly beneficial, both in terms of cost and convenience.
In this article, we'll look at Canada's private health insurance and what it does and does not cover. Then, we'll take a look at whether purchasing health insurance is something you and your family should consider.
What Does Medicare Cover?
Medicare, to the uninitiated, is the term for single-payer universal healthcare in Canada. It is not the same thing as Medicare in the United States.
Medicare covers most things in Canada and allows most Canadians access to publicly funded hospitals and other institutions.
However, there are parts of the system which are not accessible to those without private insurance or deep pockets.
Most provinces and territories in Canada do not cover dental visits or dental work. If a complex dental procedure must be performed in the hospital, Medicare may cover this. However, typically, they do not cover anything that takes place in a dentist's office.
Medicare does not cover optometry beyond a yearly eye exam, and even if it does, that's dependent on your age and province of residence. If the exam determines you need glasses or contacts or other vision aids, this is also not covered under the universal healthcare system.
Psychological care is also not covered or severely limited in scope. This creates a huge burden on society by forcing patients to pay out of pocket or through a third party insurance plan. In June of 2021 when this article was updated, Canadians aged 15-24 are reporting staggering declines in their mental health in the wake of the Covid 19 pandemic.
Canada's Medicare does not pay for prescription drugs if they are administered out of a hospital setting. If you're hospitalized, you may receive medication in the hospital free of charge. If you go to an outpatient facility and a doctor prescribes you medication, you must pay out of pocket.
Additionally, podiatry, wheelchairs, prosthetic limbs, and chiropractic care are not covered under provincial health care plans. Some private insurance policies may cover, or help you cover, the cost of these services.
Do I Need Private Health Insurance If I Have Medicare?
While the Canadian healthcare system is great for emergency and maternity services, doctor and specialist visits, diagnostics, referrals and rehabilitation, it doesn't provide many of the services that are necessary for preventative care; not to mention eye or dental coverage. More to that, there's no coverage for prescription meds, hearing aids, chiropractors, physio and psychological therapy. Because of that, approximately 60% of Canadians as of June 2022 have a private healthcare plan to supplement their provincial plan. So in essence, yes, you need a private health insurance plan. It's the best way to protect yourself and your family against conditions and ailments that may prove worse in the future.
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Many Canadians are surprised to learn that ambulance and emergency services are not totally free. For many, private insurance helps bridge that gap. Private insurance typically covers transport by air, sea or land.
Medicare does not pay for ambulance rides unless it is to transport patients from one hospital to another. Some provinces do limit the amount of money the hospital can charge the patient for the ambulance ride. Others, however, are uncapped. This can mean it can be very expensive to ensure emergency services save your life.
The Yukon Territory does cover ambulance rides and emergency transport for its citizens. It is the only part of Canada to do so.
If you are hospitalized with private healthcare, in some hospitals, you can stay in nicer accommodations. If these accommodations are not available at the hospital you're in, you can be eligible to receive a certain amount of money per day for up to a certain number of days. This will be the difference in what the insurance company would have paid for private accommodations versus the cost of public accommodations.
Traveling At Home and Abroad
Although Canada offers single-payer health insurance, if you travel between provinces, you may not be covered where you are visiting. More to that, travelling outside Canada comes at your own risk. Each province runs its own healthcare, as is typically responsible for caring only for its residents. This means that even if you're from Alberta, if you become injured and require hospital care while visiting a friend in Ontario, you may not get coverage. This could leave you with a whole lot of responsibility out of pocket.
Additionally, if you travel abroad frequently, it is also something to consider. If you become ill or injured abroad, you may have to use a local hospital. While many countries do have single-payer health insurance, as a foreigner, you're not guaranteed access to it. As a result, you'll have to pay out of pocket for any healthcare you receive.
Private healthcare usually insures you while you're abroad so that you don't have to worry about this issue. Depending on your policy, your health insurance can pay for all of your healthcare needs in another country. Or, it may only pay a portion. Still, it is far better than having to pay fully out of pocket.
Moving Out of Province and Health Insurance
If you move out of your home province or territory, whether for school or a new job, you must apply for insurance through the government. This can take several months. OHIP, Ontario's insurance program, takes three months to kick in, for example.
For some people, this is an uncomfortable period of time to not have health insurance.
If a new job does not offer coverage that begins immediately, individuals may choose to take out a private plan. They may then choose to continue the private plan after Medicare kicks in or to cancel it completely.
Canada's Private Health Insurance
Many individuals opt for private health insurance to help cover some of these costs that Medicare does not cover.
Depending on the private health insurance, you may get dental, vision, psychological care and prescription drugs on your policy.
Most policies only pay for a percentage of care, however. Most also have a cap on the amount of money you're able to spend per doctor or treatment.
For example, some policies will allow you to see a psychotherapist for an unlimited number of sessions. But, the policy will only pay until you reach a certain threshold. They may elect to pay as little as $200, but may be much more depending on your insurance.
Often times, they also cap the amount of money they will pay per session. For example, a policy may state that you can see a psychotherapist with your insurance. While the therapist may charge $50 a session, your insurance may only pay $30 per session. This means you will have to pay the difference out of your pocket.
Similarly, the policy may elect to only pay a percentage of dental care, or other care, until you reach a maximum. For example, you may need $1500 worth of dental work. Your policy may state that they will pay for up to $3000 worth of dental care. But this doesn't mean you're off the hook. Your policy may also state that they will only pay 70% of care up to $3000. That means only 70% of your dental work or $1050 of your care will be covered. You will be responsible for the rest.
How much your insurance policy covers depends on the type of insurance you buy. Many things may influence your decision to purchase certain insurance policies as well. We'll go over that in the next paragraph.
Private Health Insurance and Medical Underwriting
Private health insurance may be chosen for you if you work for a company that offers it as a perk. You may receive a small choice in your policy, or you may not. This depends largely upon your employer and what they have decided to provide for employees.
Other employers do not provide health insurance. It is not mandatory that they cover their employees.
When choosing a private health insurance plan, it is important to consider your health, what you can afford and whether the insurance requires underwriting.
Underwriting is when the company sets stipulations about all or certain policies. This means that they can reject you on the basis of your health, weight, age, medical history or pre-existing conditions. Typically, the most comprehensive plans require medical underwriting in order for the individual to qualify.
There are medical insurance companies that will approve almost any individual that applies. For the most part, these insurance companies only insure people under a certain age. But, they do not require medical underwriting and cannot deny you coverage if you're within the right parameters.
In the case of policies that do not require medical underwriting, individuals may begin their coverage rather quickly. They will not get kicked off if they become ill or overweight. The only requirement is the payment of the monthly fee.
In these cases, the individual is often responsible for many of the fees leveraged, as they will not cover the entire amount.
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Canada's private health insurance is becoming necessary for many. If your job does not provide private insurance, it is prudent to consider private care. After all, it is an investment in yourself and your family.
For more on Canada's health insurance and your options, visit us here.
