Health Insurance After Retirement in Canada: What You Need to Know
Is private health insurance worth it for retirees in Canada?
Health insurance is generally worth it for retirees in Canada, but it depends on a few key factors like where you live, your needs beyond government health services, and your pension and budget for coverage.
Canada’s provincial healthcare plans cover services such as doctors visits, hospital stays, and some prescription drugs, but they don’t include everything.
While many provinces offer additional coverage once you turn 65, the level of support can vary significantly depending on where you live. For many retirees, this means covering additional health expenses out of pocket, especially for things like prescriptions, dental work, vision care, and paramedical services such as physiotherapy.
Private health insurance can help fill the gaps not covered by provincial plans. Here’s a breakdown of the key factors that can help you decide if it’s worth it:
- Your province of residence: Each province and territory offers different levels of coverage for seniors. Evaluate your province’s specific health care inclusions, then identify any gaps or out-of-pocket expenses.
- Your health needs: If you take regular medications, use medical devices, or expect to need frequent dental or vision care, private coverage can help reduce the expenses you pay yourself.
- Your financial situation: After retirement, fixed incomes and tight budgets can make large, unexpected medical bills harder to manage. A plan that fits your budget and spreads costs out monthly may offer more stability.
According to a new PolicyMe–Angus Reid study, 47% of Canadians aged 55+ delay health appointments due to cost, especially since Provincial plans offer limited coverage. With a private plan, you can schedule your appointments without the stress of out-of-pocket costs.
Pros and cons of private health insurance for retirees
With this said, private extended healthcare isn’t always necessary. Here are a few things to consider when deciding if private health and dental coverage is right for you:
How to get comprehensive healthcare coverage when you retire
In retirement, healthcare coverage often comes from more than one place. While government healthcare continues to provide a foundation, it doesn’t cover everything; especially services like prescriptions, dental, vision, and paramedical care.
To get well-rounded coverage, most retirees rely on a mix of provincial healthcare and additional protection, either through a converted employer group benefits plan, or a personal health insurance policy. Understanding how these pieces fit together can help you plan ahead and avoid gaps in coverage.
1. Find out what government healthcare you qualify for
Canada’s public healthcare remains accessible to you after retirement, offering coverage for doctor’s visits, emergency room treatments, hospital stays, prescription drugs in hospitals, and hospital dental surgery.
Some provinces offer additional healthcare programs for eligible residents over age 65. For example, Ontario offers the Ontario Drug Benefit Program, the Ontario Seniors Dental Care Program, and the Assistive Devices Program. Other provinces, such as British Columbia, have enrollable programs that offer subsidized drug costs based on household income, while some provinces require seniors to pay a deductible based on their income.
Since coverage varies regionally, it’s worth looking into the available programs in your province to identify any uncovered services. As listed below, many provincial plans leave out routine and preventive healthcare needs that become more common in retirement.
For most retirees, provincial healthcare is a starting point, but not a complete solution. Your need for additional coverage, such as private health insurance, will depend on where you live, and the gaps in care amongst supplementary senior healthcare programs in your province or territory.
2. Consider group health benefits conversion
Some employers offer the option to continue your health benefits into retirement through a group benefits conversion plan. These plans are typically available for a limited time after you leave your job (often 31 to 60 days), allowing you to move from your group coverage to a retiree or individual policy.
Many insurers allow you to convert your workplace plan to an individual plan without medical underwriting if you apply within the required timeline; typically 31 to 90 days, depending on the benefit type. These conversion windows help you avoid gaps in coverage and are especially useful if your next job has a waiting period for benefits.
Some providers, including PolicyMe, offer health and dental plans specifically designed for Canadians who have recently lost their workplace benefits.
3. Purchase private health insurance
Private health insurance provides coverage for common gaps in provincial healthcare, including prescriptions, dental care, vision services, and paramedical services. These plans are especially useful for retirees no longer covered by an employer group plan and looking for a flexible, long-term solution.
To apply, most insurers require a health questionnaire or medical underwriting to assess your current condition. This process helps determine the level of coverage available to you, as well as your premiums. For healthy applicants, this often means access to more comprehensive or cost effective plans.
For many retirees, private coverage is the next step in protecting both their health and financial wellbeing. With that said, the best health insurance policy for you will depend on a few factors, such as your budget, coverage needs, and the qualities you look for in an insurance company (e.g. fast reimbursement, smooth claims handling or responsive customer service).
Your plan should act as a true safety net for the bigger health costs that could impact your savings over time, not just for routine checkups. With PolicyMe’s digital quote and application process, you can easily find affordable and flexible health insurance coverage to ensure you’re protected within your budget.
Misconceptions about healthcare after retirement in Canada
Many Canadians assume that once they stop working, most medical costs will be taken care of by their province. While provincial and territorial public healthcare plans will cover you into retirement, several common healthcare needs fall outside of provincial coverage.
Here’s a breakdown of common healthcare misconceptions after retirement in Canada, plus the facts to set the record straight:
Key health benefits your policy should cover
Government healthcare plans provide essential coverage for doctor visits and hospital care, but they often leave out services that become increasingly important with age. When choosing private health insurance in retirement, it’s important to focus on areas where out-of-pocket costs can add up quickly, and keep in mind that your senior health insurance needs could expand over time.
Here are some of the most valuable benefits to look for in a health and dental plan:
1. Prescription drug coverage
Medications are one of the most common and costly health needs in retirement. In fact, a recent study from the Canadian Life & Health Insurance Association (CLHIA) reported that drug claims increased by 7.1% in 2023 alone, exemplifying how often Canadians require prescription medications.
While some provinces offer partial drug coverage for seniors, plans vary widely and don’t always include every medication. It’s essential to find a policy with a broad list of covered medications, also known as a drug formulary, including both the medications you currently take and those you may need in the future.
2. Chronic health condition coverage
Many retirees manage ongoing conditions like arthritis, heart disease and diabetes, which is amongst the conditions that account for over a third of drug benefit reimbursements.
A strong policy should support regular monitoring, prescription needs, and access to specialists to help manage chronic health issues over time.
3. Paramedical services
Services like physiotherapy, chiropractic care, massage therapists, and mental health counselling are not covered under most provincial plans. These supports, which are typically covered through private plans, often become more important with age, especially when recovering from injuries, managing chronic pain, or maintaining mobility.
4. Vision care
Routine eye exams, glasses, contact lenses and treatments for age-related vision changes are not typically covered for seniors through provincial healthcare, yet these services are commonly required for Canada’s aging population.
The CLHIA found that Canadian health insurance companies provided over $1.5 billion in vision care benefits to policyholders in 2023, emphasizing the common usage of this vital benefit. A good health plan should help offset the cost of maintaining your vision and eye health.
5. Hearing care
Based on national data from StatsCan, an estimated 54% of Canadians aged 40 to 79 have at least mild hearing loss, and that number rises to 93% for those aged 70 to 79. While hearing loss is common with age, provincial support is limited. Having private coverage for hearing assessments and assistive devices can help you avoid paying out of pocket for this care, which can be expensive upfront.
6. Preventative care and wellness
Plans that cover preventive care like health screenings for special conditions (e.g. heart disease and cancer), regular check-ups, and immunizations can be beneficial for maintaining good health and catching potential issues early.
Some plans also offer access to wellness services like mental health counselling, nutrition guidance, or lifestyle coaching; tools that can help you maintain your overall wellbeing well into retirement.
7. Coverage and costs
Your health insurance plan should align with your personal needs and lifestyle. Plans that offer flexibility and allow you to customize coverage based on your health status, activities, and budget will provide the most value. This means only paying for what you need, without unnecessary extras.
With this said, it's important to find the right balance between cost and coverage. While lower premiums may seem attractive, they may come with higher deductibles or limited coverage.
Consider your health needs, current expenses, and financial situation to find a plan that strikes a balance between affordability and comprehensive care.
Checklist for soon-to-be-retirees
Whether you’re leaving an employer plan or figuring out what government coverage looks like after 65, taking time to prepare can help you avoid gaps and unexpected costs.
This checklist breaks down the key steps to take before, during, and after your retirement so you can stay covered and feel confident in your plan.
FAQ: health insurance after retirement in Canada
