Is Private Health Insurance Worth It In Canada?

TL;DR: Is private health insurance worth it?

Private health insurance may be worth it in Canada if you’re paying a lot for routine medical expenses not covered by your provincial healthcare plan or a group insurance plan. 

What does private health insurance actually cover in Canada?

Private health insurance covers the gaps that public health insurance won’t pay for.  

In Canada, public health resources are dedicated to costs defined as medically necessary. That includes doctors’ visits, hospital care, emergency medical services, and most non-elective surgeries. 

But public health insurance’s definition of medically necessary care leaves out a lot of health services that are crucial for a healthy, fulfilling life. That’s where private health insurance plans and group health coverage step in. Private health insurance works as a supplement to public plans, offering partial or full reimbursement for services not covered by public healthcare.
‍

A typical private health insurance plan covers…

• Prescription drugs: May include pre-existing prescription medication
• Dental care: Ranges from basic checkups and cleanings to major dental services like crowns, bridges, and dentures
• Vision care: Regular vision checkups and prescription eyewear 
• Paramedical services: Physiotherapy, chiropractic care, massage therapy, acupuncture, etc. 
• Mental health services: May cover visits to a counselor, psychologist, psychotherapist, or other mental health professional
• Extended health benefits: Medical equipment, in-home health care, speech therapy, hearing aids, and other medical expenses not covered by provincial healthcare
• Ambulance services: Typically covers up to 100% of medical transportation fees not covered by public subsidies
• Hospital stays: May cover private or semi-private accomodation

When private health insurance is worth it

Private health insurance is typically worth it for Canadians if: 

• You don’t have access to workplace benefits or need higher coverage limits 
• You have predictable recurring medical expenses (e.g., ongoing prescriptions, regular visits to a therapist or paramedical professional, dental cleanings, impaired vision)
• You want protection from high-cost surprises that provincial healthcare coverage wouldn’t pay for (e.g., dental surgery, orthotics, specialty drugs)

Private health insurance may be especially important for self-employed or retired Canadians whose only health insurance coverage comes from a provincial plan. If you have any ongoing healthcare costs—from a serious chronic illness to a basic need for dental care—a private healthcare plan could reduce your out-of-pocket costs, saving you money without skipping any medical care.
‍

Other key insurance benefits you may be missing

If you don’t have access to a workplace health insurance plan, you may also be missing out on key insurance benefits like: 

• Life insurance
• Critical illness insurance 
• Disability insurance

When private health insurance may not be worth it

You may not need private health insurance if: 

• You have very low and predictable healthcare expenses
• Your current budget covers your medical spending comfortably and you have a big enough safety net to cover surprise expenses 
• You already have access to supplementary healthcare coverage through an employer-provided group insurance policy

Private health insurance is designed to cover routine medical spending and insulate your finances against major unexpected costs. If neither of those apply to your situation—or if you already have robust coverage through you or your partner’s employer—buying private medical insurance could be unnecessary or redundant.
‍

The risk of relying on workplace insurance

If your workplace (or your spouse’s) provides excellent group health insurance, it may not be worth paying private health insurance premiums to double up your coverage. But group plans like this come with an inherent risk: because they’re tied to your employment, they’re not portable and could vanish if your employment changes or ends.

The bottom line: If you’re happy with your current workplace coverage, be ready to replace it with a private plan if your employment situation changes.

How to tell if private health insurance is worth it for you

Not sure if private health insurance is worth the cost in your situation? Follow these three steps to find out. 

Step 1: Estimate your annual healthcare spending

Our first step is a good old-fashioned audit. Gather up any receipts, invoices, or bank statements from the past 12 months to get a total of all of your out-of-pocket healthcare spending. You should include: 

• Bills for dental cleanings, checkups, fillings, etc. 
• All prescription drug costs not covered by your provincial plan 
• Eye doctor’s visits and prescription eyewear (including contact lenses) 
• Visits to a mental health or paramedical professional 
• Medical equipment and extended health services not covered by public insurance 
• Ambulance fees, if applicable

Add up the total of all payments you made in the past 12 months, then divide your total by 12. That’s the dollar amount of your healthcare gap.

Step 2: Compare private healthcare premiums vs. realistic reimbursements

Now it’s time to review some private healthcare plans and crunch some numbers. 

Start by looking at cost estimates for top-rated private healthcare plans in Canada. You can use PolicyMe’s guide to the best private health insurance as a starting point, or do your own research. For each plan, you’ll want to: 

• Estimate the cost of coverage: It’s usually easy to get cost estimates based on your age, province, and number of people on the plan. 
• Compare reimbursement levels and annual maximums with your current spending: How much of your ongoing healthcare spending would actually be covered by the plan? 
• Add up your total out-of-pocket costs under the plan: Include premiums, co-pays, deductibles, and anything that exceeds the plan’s annual maximum. 

Some quick definitions

Not sure how to interpret all these terms? Here’s a quick rundown of what key health insurance terms mean: 

• Annual maximum: The total amount your health care plan will pay for a given set of services in any year.
• Co-pay: The fixed amount that you pay upfront to the provider for some services before your insurer covers the rest (up to plan limits).
• Deductible: The set dollar amount you agree to pay out of pocket for a given set of services before your healthcare plan starts to cover the rest (up to your annual maximum).
• Reimbursement: Private health insurance plans typically only cover a portion of the cost of each covered service. Reimbursement rates typically range from 50% to 100% depending on the service.

Step 3: Factor in the “what-ifs”

Don’t just think about your existing expenses when weighing your healthcare decisions. It’s also worth considering the cost of major diagnoses and crises that public health care wouldn’t fully cover, such as an illness requiring in-home care, a chronic condition requiring long-term prescriptions and medical equipment, or a major dental procedure. 

It’s impossible to know for sure whether you’ll need coverage for these, so use the following cues:
‍

• Family history: If you have a family history of certain health issues, such as cancer or diabetes, it’s worth factoring that elevated risk into your calculations. 
• Red flags: Maybe your dentist has already warned you that you may need major work in the future, or maybe you have signs of an emerging health issue that could require more intensive care down the line. 
• Your own appetite for risk: For some, the peace of mind that comes with coverage is paramount. Others might feel better off protecting their short-term budget and accepting the risk of major uncovered expenses. 

Private health insurance vs. paying out of pocket

Monthly premiums for private health insurance range from about $75 to $300+ for adults aged 21 to 59. Your exact costs may vary based on the plan you choose, the level of coverage you select, and any pre-existing conditions you have (if the plan is subject to underwriting).

That comes out to around $900/year on the low end, and $3,600/year or more on the high end. According to data from Statistics Canada, most Canadian households are already spending an average of $2,332/year on out-of-pocket medical costs not covered by insurance. 

If your private health insurance plan covers a majority of those out-of-pocket costs, you could save a significant amount by paying for the plan rather than relying on your own savings. 

But remember: annual maximums, deductibles, exclusions, and reimbursement limits still apply to every health insurance plan. Do the math before you buy to make sure you’re really saving money. 

FAQ: Is private health insurance worth it?

Prices listed on this page are based on information available as of October 2025. The prices shown are for general reference only and may vary based on factors like your age, location, and product selection.