Let’s take a complicated question and simplify it. Before we get into private health insurance, let’s understand what coverage Canada’s public health care system provides.
Canada-wide, “in hospital” treatment is covered by the province where you live. (If you are in your home province at the time you need the treatment. If not, see our post on travel insurance).
Any treatment administered outside of the hospital or medical clinic setting comes out of your pocket. This includes things like:
- Prescription drugs
- Vision care
- Ambulance services
- Dental care
- Physiotherapy, chiropractic and other health practitioners
Employer group benefit plans cover some or all of these costs. However, if you are self-employed, between careers, not in school or retired, you will pay for these needs as they arise (often unpredictably).
Additional Health Coverage for Children and Seniors
Pharmacare
If you are 65 years or older and have no other prescription drug coverage, you qualify for Pharmacare. You’ll pay an annual fee based on household income. This helps residents with prescribed drugs and devices, under the Nova Scotia formulary. (It varies province to province.)
Vision Care
A routine, comprehensive eye exam is available once in a 2-year period for people under age 10 or over age 65.
Dental Care
In Nova Scotia, MSI covers basic dental care for kids from birth until the end of the month when they turn 15. Once a year, children can receive:
- Dental recall exam
- One fluoride treatment
- Two x-rays
- Fillings and other preventative services like sealants
But if you aren’t a child or a senior citizen, the public health care coverage is often not enough.
This is where private health insurance plays a role.
How Private Health Insurance Works
A private health plan covers everyday medical expenses and it insures against future risk. It can provide a financial cushion for your family, as you pay a predictable monthly cost that can help you manage cash flow. If a medical situation arises, you’ll likely have a lump sum, upfront cost.
Prescription medication alone can be expensive and financially devastating to a family’s retirement and investments plans. If you have a private health plan in place before your diagnosis, the insurer will be responsible for most of the costs.
How Much Does Private Health Insurance Cost?
The short answer to the cost of a private health plan is, it depends. Every situation is unique.
The cost of the plan depends on a number of factors:
- How many people will be covered
- What are their ages
- What are the unique health needs and medical history of each person
- How risk averse are you and your family
Health plans can be tailored to your needs. And – they can be adjusted over time, as your situation changes.
Are Health Insurance Premiums Tax Deductible?
Yes, Canada Revenue Agency states,
“Premiums paid to private health services plans including medical, dental, and hospitalization plans. They can be claimed as a medical expense, as long as 90% or more of the premiums paid under the plan are for eligible medical expenses.”
So, you can deduct this expense if you:
- are a sole proprietor
- are a freelancer
- don’t have a group plan at work
- are a small business owner who pays for a plan on behalf of your employees
- simply want to top up your coverage because you know your regular medical expenses are high
The only health plan cost you cannot deduct is if you are paying into a group benefits plan to your employer.
Is Private Health Insurance Worth It?
Let’s compare. Here are typical annual costs for a family with two children.
2 eye exams – $160
Contact lenses – $300
Physiotherapy – $328
Orthotics – $225
Massage therapy – $100
Blood pressure medication – $245
3 antibiotics – $180
4 dental cleanings $460
2 fillings – $260
1 root canal – $560
Travel insurance for 4 – $118
Total: $2,936
Your health coverage could almost pay for itself in everyday costs alone. And when you factor in the tax deduction of the premium, predictable monthly expense, and potential for unexpected medical emergencies, it seems like a smart move for your family.
Make Health Insurance Part of your Financial Planning
I realize we’re biased. As a national insurance brokerage we see Canadians purchasing travel insurance for their trips abroad, but neglecting private health insurance when it comes to their financial planning.
A review of you or your family’s health insurance picture can be as valuable, and in some cases more valuable, than an ongoing review of your investments.
Take the time to make a plan for your health insurance now. It will undoubtedly be a vital tool in cost saving as you and your family age, and in an economy that has ever rising health care costs.
Contact one of our health insurance specialists for a custom quote.