Is private health insurance worth it for retirees in Canada?
Typically yes, private health insurance is a worthwhile investment for Canadian retirees.
Provincial healthcare covers the basics (e.g. doctors visits, hospital stays, and some prescription drugs), and some provinces offer increased coverage for seniors. But even with some extra programs in place, provincial care doesn’t cover all of the routine and preventive services that become more commonly needed with age, including hearing aids, physiotherapy, and chiropractic care.
Private health insurance can help fill any gaps left uncovered by provincial plans, and premiums are predictable so you can budget for your coverage to avoid expensive and unexpected out-of-pocket costs.
The best way to decide if private health insurance is worth it as a retiree is by assessing your medical needs, provincial coverage and financial situation. Ask yourself these questions:
What benefits to look for in a health insurance plan for retirees
In retirement, the best health insurance plan for you will support your current health needs and the unexpected medical expenses you could face in the future.
Provincial plans can offer a foundation for healthcare, but many common health services are only partially covered, or not included at all. Here are some of the important benefits to look for when considering your private health insurance options in retirement:
How much does private health insurance for retirees cost?
Private health insurance costs vary based on your age, health, coverage levels and where you live. On average, Canadian retirees between the ages of 60 to 64 can expect to pay around $106.80 per month for private health insurance.
To put things in perspective, here’s a summary of starting monthly rates for PolicyMe’s Economic plan by age group. Note that rates are an average across Canada, but there is cost variance per province:
Each provider uses a different underwriting process to determine your health insurance rates. Start by comparing health insurance quotes from different insurers to understand the cost of private health insurance for your specific profile and needs.
Is it cheaper to pay for healthcare expenses out-of-pocket in Canada?
In most cases, it’s not cheaper to pay for healthcare expenses out-of-pocket as a retiree. Paying out of pocket tends to be more expensive in the long run, especially since new health issues may arise as you get older.
The CIHI’s National Health Expenditure Trends show that Canadians aged 65 and older use around 45% of public healthcare funds across the nation, but only make up approximately 18% of Canada’s population. This goes to show how high-demand healthcare coverage can be in retirement.
Costs for prescriptions, dental visits, vision care, and paramedical services can quickly add up. You’ll need to weigh your healthcare needs against your provincial coverage and consider how much you could potentially pay out-of-pocket without private coverage.
And think about what your savings or pension can support. If you have limited room for unexpected costs and you prefer monthly premiums upfront, private health insurance is likely the better option.
You may not notice it over time, but out-of-pocket costs for healthcare can quickly add up. A recent PolicyMe–Angus Reid study found that 29% of Canadians paid $1000 out of pocket in the past 12 months for health or dental-related services, and 9% paid over $3000. For seniors, those numbers can be even higher due to more frequent medical appointments, prescriptions, and specialized care.
Key benefits of health insurance for retirees
Health insurance in retirement can help you cover routine expenses and protect your wallet from larger unexpected costs that could strain your savings. You may view monthly premiums as an extra expense, but they can provide real value compared to your potential out-of-pocket costs without coverage.
Here are the key benefits of private coverage in retirement:
- Covers costs: Private health insurance helps manage and offset the cost of frequent or ongoing health needs.
- Beyond public care: You’ll have budget-conscious access to services that aren’t covered by most provincial plans (e.g. physiotherapy, mental health support, massage therapy).
- Predictable payments: Your healthcare costs will be spread out evenly across monthly premiums, making them more predictable and easy to plan for.
- Wide safety net: You’ll be prepared with coverage if you experience an unexpected change in health that leads to a large one-time expense.
A good private health insurance plan does more than reduce your out-of-pocket costs. It also helps you gain more control of your healthcare in retirement, even as your needs change. With the right health insurance provider, coverage, and premium, you can have peace of mind knowing your health and finances are protected.
Who should get private health insurance after retirement in Canada?
Private health insurance coverage is especially useful for retirees who want greater healthcare flexibility, lower out-of-pocket costs, and peace of mind as they age. While retirement planning, you may want to consider private health insurance if:
- You’re coming off a group plan: Most workplace health plans end at retirement unless your employer offers a conversion option. Without private insurance, this transition can leave you responsible for the full cost of services that were previously covered.
- Provincial healthcare doesn’t cover enough: Government coverage varies by province, but regardless of where you live, it typically leaves a lot of services uncovered. A private health plan can offer coverage for dental, vision, paramedical services, and more.
- You’re interested in additional care: After retirement, you may feel inclined to improve your health with holistic care. Private health insurance provides a financial safety net to explore paramedical services, counselling, and preventive care.
- You’re already paying out of pocket for routine care: If you’re regularly paying for prescriptions, dental visits, or paramedical care, a private health insurance plan can help turn those varying expenses into consistent monthly premiums.
Some insurance providers offer simplified solutions to securing healthcare coverage after retirement. For example, PolicyMe’s fully digital quoting and application process can help you identify the best coverage level for your needs within a few minutes.
FAQ: Is health insurance worth it for retirees?
