Let’s start with understanding public health care so there is some context. Canada’s health system provides coverage for many medical procedures and care. Throughout BC, treatments that take place in a hospital in your home province are covered by that province. (If you visiting another province when you need hospital care, take a look at our post on getting sick while traveling).
If the medical care you receive is outside of a hospital or medical clinic, it isn’t covered by public health, and you’ll need to pay. This includes care like:
- Prescription drugs
- Eye appointments and glasses
- Ambulance services
- Dentist visits
- Chiropractor, physiotherapist, psychologist and other health practitioners
Sometimes employers will cover some of these costs through their group benefit plans. However, if you are a freelancer, or in between careers, retired, or not a student, you’re responsible for covering these expenses as they happen. Some of them are predictable, but others are not.
Added Health Coverage for Low Income Families in BC
- Pharmacare – The Fair PharmaCare plan will cover the cost of many prescriptions and some medical devices for British Columbians. The amount of coverage is based on income. Learn more about Fair PharmaCare and see if you qualify.
- Eye Care – If you receive income assistance, BC Health will cover most of the cost of routine eye exams every 2 years and new eyeglasses
- Dental Care – Similar to eye care, basic dental services and some proceedures are covered, if you receive income assistance.
If you don’t qualify for assistance, oftentimes the provincial public health care coverage is not enough.
This is when private health insurance is beneficial.
How Does Private Health Insurance Work?
Private health plans cover the cost of everyday medical procedures and treatments. Most importantly, they insure against future risk. In the unfortunate event that a medical emergency happens, you’ll likely have a lump sum, upfront cost to pay. A private health insurance plan can provide a financial safety net for your family in this time of need. And it can help you manage cash flow, with a predictable monthly cost.
Even prescription medications can be expensive, depending on what they are treating. The cost can be devastating to a family’s retirement and investments plans. However, when you have a private health plan in place before the prescription need and associated illness arise, the insurer will be responsible for most of the costs.
What is the Cost of Private Health Insurance Cost?
It’s difficult to give a definitive answer because there are many factors that determine the cost of a private health insurance plan. And everyone’s situation is unique.
Some of these factors include:
- The number of people that will have coverage
- Their ages
- The medical history and specific health needs of each person
- Your risk tolerance level
The good news is the plans themselves are highly customizable. And if the health status of someone receiving coverage changes, your plan can be adjusted.
Can You Deduct Health Insurance Premiums from Taxes?
You can. The Canada Revenue Agency website states that for “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 self-employed
- work for an employer that doesn’t provide a group plan
- own a small business and you pay for a plan on behalf of your staff
- want to top up your health coverage because you know your regular medical costs are high
The only cost associated with a health plan that is not deductible, is if you pay into a group benefits plan through your employer.
Is It Worth It for Private Health Insurance?
The best way to determine value is to look at what you might pay for typical health care items that are not covered by public health. This list is based on a family with two children over the course of a year.
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
Based on these pretty average costs occurrences, your health coverage could almost pay for itself. When you also consider the tax deduction of the premium, the predictable monthly fee, and the possible unexpected medical emergencies, then a private health plan is a smart idea.
Private Health Insurance and Financial Planning
As a national insurance brokerage we often see Canadians neglecting private health insurance, and yet they will purchase travel insurance for their trips abroad. Medical emergencies happen at home too.
When it comes to financial planning, a review of you or your family’s health insurance situation is just as important as a review of your investments. Make time now to plan for your health insurance. There’s no doubt it will be a critical cost saving tool as you and your family get older, and in an economy where public health care uncertainty and costs are on the rise.
Take a look at our Pacific Blue Cross health insurance plans. Get a customized quote from one of our health insurance specialists today.