Along with hockey and politeness, universal health care is known to define us as Canadians. But there’s a good chance you don’t have as much protection against health costs as you might think.
What does your provincial health plan cover?
The 2019 Sun Life Barometer examined Canadians’ attitudes toward their health and finances. It found that 22% of working Canadians have experienced a serious accident or health event. This means they’re likely to receive or need additional medical attention such as physiotherapy, surgery or prescription drugs. But how much does your health plan cover? And how much comes out of their pocket?
Provincial health plans cover only “medically necessary” services. These include those provided in a hospital. Various provinces have expanded the scope of their plans to cover expenses such as prescription drugs or eye exams. But these are usually only given to certain groups of people. These include seniors, children or those in need. That leaves a range of health or health-related expenses uncovered for most of us.
Are your employee benefits enough?
Do you have employee benefits at work? You may think that will take care of the gaps left by your provincial plan. But closer review of your benefits may reveal only partial coverage for the cost of things like eyeglasses, orthodontia or laser eye surgery. Or, in some basic-level plans, you may not receive any coverage at all for these medical needs.
Let’s look at your child’s braces or a set of adult braces as an example. Those braces may cost $5,000 to $6,000. But your workplace plan may cover only half. You may also have to manage other limitations, such as deductibles, co-payments, annual and lifetime maximums. These restrictions and limitations may leave you significantly out-of-pocket for health-care expenses for you and your family.
And what about your medical expenses after you retire? Many Canadians don’t have a company pension. If you do have one, the odds are increasing that it won’t include medical benefits. For retirees, this may become a pressing financial concern.
So what can you do to help reduce the financial stress of health care as you age? For starters, it helps to look into all your health insurance options to see what’s right for you.
Types of health insurance
Health insurance in its various forms can help address these gaps. Here’s a few to keep in mind and consider as part of your financial plan:
Personal health insurance helps cover medical and dental expenses not covered by your provincial plan.
Critical illness insurance pays you a sum of money. You can use it as you wish if you’re diagnosed with a serious health issue that’s covered by your policy. To receive this money, the waiting period required by your policy must have passed.
- Do you need critical illness insurance?
- Find out how a serious illness could affect your finances. Try this Critical illness insurance calculator.
Long-term care insurance helps cover health-care costs over an extended period of time. You’ll receive reimbursement or money back for your expenses. Or, you’ll get an income benefit during the period you require care.
Disability insurance pays you a percentage of your salary if you can't continue working due to an injury or illness. You must be under age 65 to qualify for this insurance.
Travel insurance is another form of health-care coverage. It helps protect you against medical costs when you’re travelling to another province or country.
Just as you go to a doctor for medical advice, it’s wise to see a professional for help with your financial plan. When you’re reviewing your finances with an advisor, you may want to review your health protection as well. An advisor can provide more information and knowledge about insurance and which type fits well with your financial situation.