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How “free” is Canadian healthcare?

PROLINK Blog

How “free” is Canadian healthcare?

July 17, 2020

One of the best things about Canada? Our healthcare system. No matter what part of the country you live in, you have access to free healthcare if you’re a permanent resident.

Under the federal Canada Health Act, provincial and territorial governments must provide basic medical and emergency care to all residents, including primary care, diagnostic and physician services, and all medically necessary hospital stays and procedures. Services vary between provinces, but it’s comforting to know you can make a trip to the ER or get a routine check-up without worrying about the financial fallout.

Graphic illustrating costs not covered by free healthcare

But just exactly how free is Canadian healthcare?

The truth is: government healthcare covers a lot less than most people think it does. In 2017, the latest year for which private-sector data is available, the Canadian Institute for Healthcare Information (CIHI) reported that out-of-pocket expenditures accounted for a whopping 49% of healthcare spending.

Depending on where you live, services deemed “non-essential” are either excluded or require a fee, even if they’re vital to your recovery or general wellness, such as: dental care; vision; prescription drugs; ambulance services; disability equipment and assistive devices (more on disability insurance); mental health and counselling services; travel vaccines, home and/or long-term care, paramedical services (massage therapy, physiotherapy, chiropractic care, podiatry)…and the list goes on.

Plus, government and employer packages are convenient, but they’re not stable–they can be changed at any time. What’s covered today might not be covered in the future.

Misconceptions about healthcare can put people in serious debt if their expenses exceed what’s covered by the government. And between prescriptions, travel, and appointments, anyone living with a major health condition can tell you how quickly medical bills can add up. According to the 2019 Sun Life Barometer, two in ten working Canadians (22%) have experienced a serious accident or health event in the past year and 19% faced significant financial hardships as a result.

So the real question is: can you afford to get sick? And what are your options if you do? Most people generally rely on employer-sponsored plans, pay out-of-pocket, or worse, forego health services altogether because they can’t afford them. But there’s a fourth option: private health insurance. Skeptical? Most people are. Read on to find out why private health insurance may be worth it for you.

1. It covers you when your employer won’t.

To attract and retain top talent, many companies offer an employee benefits package that includes vacation pay, sick days, and health insurance. But depending on your employer, a benefits package might not make a huge difference in your health expenses. Here’s why:

  • Predetermined Packages: For starters, most benefits packages are notoriously inflexible. Your health plan and provider are preselected at the employer’s discretion; that means they’re tailored to your employer’s needs, not yours. That also means you might end up paying for benefits that might go to waste, like physio and massage therapy, when what you really need is vision care and eyeglasses. Plus, you could get stuck with a poor service provider that overcomplicates the claims process and rarely reimburses you on time.
  • The Cost: Your employer has to pay part of your insurance premium, but the minimum might be low; the rest comes from your salary. Be sure to read the fine print before you sign on–the difference between your contributions and your employer’s might be substantial.
  • You Still Have to Pay: Not all services are fully insured; fixed limits in group plans often only cover a portion of your expenses, not the total cost, and percentages vary by employer. Even if you have employer-sponsored coverage, you’ll still need to have a few extra dollars–sometimes hundreds–on-hand after your next dental or eye appointment to make up the difference.
  • No Carry Over: Most employer-sponsored plans operate on a “use it or lose it” principle. You have 12 months to use your healthcare benefits and if you don’t, any unspent funds don’t carry over into the next benefit year.

2. It’ll follow you no matter what.

Depending on where you work, you might not even have access to traditional workplace benefits.

  • Unemployed: What if you’re between jobs? Whether you quit, get laid off, or your employer goes out of business, you lose group coverage if you lose your employer. And it could be months before you find new work, leaving you vulnerable to mounting health debt if an emergency situation or unforeseen medical condition arises.
  • Underemployed: Most group plans operate as a two-tier system that offer different levels of benefits based on your employee status–hourly, salaried, commissioned, and more. So if you’re a manager or an executive, you’ll be entitled to a robust compensation package. But if you’re a part-timer, you likely won’t have access to the full spectrum of benefits offered by your employer, even if you work full-time hours.
  • Self-Employed: With the rapid rise of the gig economy and spread of COVID-19, more Canadians than ever are opting for contract or freelance work. That means minimal, if any, access to group benefits since most employers rarely include for independent contractors in their healthcare plans.
  • Retired: Private health insurance is a key component of retirement planning. The 2019 Sun Life Barometer also found that 21% of retired Canadians have persistent health issues and 17% of retirees have family members with various health conditions. Meanwhile, 15% had to dip into their savings to cover the costs of a serious health event.

The coronavirus outbreak further complicates these matters. With millions laid off, working from home, struggling to find work, or forced into early retirement, many have been forced to operate without the security of employer-issued health insurance.

But, a private plan will follow you wherever you go, whatever you do, regardless of your employer, employee status, or location. Most plans even have room for family coverage that extends to your spouse and/or children. In the middle of a global pandemic when many are feeling the pinch, signing on for private health insurance might be the perfect way to stay protected and hold onto some extra cash.

3. It’ll save you money.

If you have recurring health-related expenses, like prescription medication, physiotherapy, or eyeglasses, health insurance will probably save you money on a regular basis.

Say your prescriptions cost about $200 a month out-of-pocket. With insurance, you could get a plan for $100 a month that includes 80% coverage on prescription drugs. That means you’d be paying $40 out-of-pocket, plus your health insurance premium for a grand total of $140 per month. That’s over $700 in savings every year, money that can be better put to use on your home, car payments, or even a vacation when things calm down.

4. It’ll protect your future.

If you’re young and healthy, it might seem impractical or unnecessary to factor another bill into your monthly budget. But you’re never too young to invest in your health. Remember, health complications can crop up at any age–in 5 years, 5 months, or even 5 weeks from now. And your premium will depend on your health and your age at the time your policy goes into effect, so the earlier you sign on, the cheaper your plan will be.

Additionally, the sooner you start a health insurance plan, the sooner you can take advantage of it. Routine checkups, dental cleanings, and massage therapy might even help you stay in enough good shape to avoid chronic conditions down the road.

5. It’ll protect your financial security. 

Have you ever heard people say “health is wealth”? Well, it’s true, and not just because a healthier life can lead to a happier life; it’s because bad health depletes your wealth.

Factor in your personal situation. If you become sick or injured, who will take care of you? Will they have to take time off work? And if so, how strongly will it affect your household income? With healthcare costs steadily on the rise, even a minor ailment can leave a lasting dent on your finances in ways you might not even consider.

And if you’re not prepared, you’ll be too distracted by your medical bills to focus on what’s most important–your recovery. But you should never have to compromise on your health. With health insurance, you’re not just protecting your health, family, or future; you’re protecting your financial security.

A private plan—like PROLINK’s—will supplement your primary healthcare and cover what provincial plans won’t: extended health, vision, dental, drugs, massage, chiropractic, physiotherapy, and more. Most importantly, it’ll provide you with the peace of mind to afford the care you need, when you need it.

To learn more, connect with PROLINK today! For a free, no-obligation quote, click here.


PROLINK’s blog posts are general in nature. They do not take into account your personal objectives or financial situation and are not a substitute for professional advice. The specific terms of your policy will always apply. We bear no responsibility for the accuracy, legality, or timeliness of any external content.

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