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Personal Health Insurance in Ontario, Canada - The Ultimate Guide

Why Personal Health Insurance Is Important:

A personal health insurance plan is an extremely valuable insurance product. Personal health insurance can cover many of the health and prescription drug related expenses not covered by Provincial health care. Purchasing personal health insurance before you have any medications or even minor health issues can ensure that your bills are paid should anything happen and forms an integral part of your financial security. If you wait, you may no longer be insurable, have exclusions or only have access to basic plans.

Benefits Available:

Accidental Death and Dismemberment:

Commonly referred to as AD&D, this benefit provides a lump-sum payment in the event of death due to accident, and a lesser lump-sum in the event of the loss or loss of use of the Insured’s limbs.

Extended Health Care:

Commonly referred to as EHC, extended health care covers eligible medical expenses not covered by the Provincial health plan that are the result of illness or injury in the Insured’s province of residence.

Paramedical Services:

Benefits are payable for these services after the yearly maximum allowed (if any) under the Provincial health plan has been reached.

Paramedical services typically include:

  • Chiropractor
  • Acupuncturist
  • Osteopath
  • Physiotherapist
  • Podiatrist
  • Psychologist
  • Speech Therapist
  • Chiropodist
  • Naturopath
  • Ophthalmologist or Optometrist
  • Registered Massage Therapist

The annual maximum may be a flat amount per visit such as $20.00, up to a specified number of visits, such as 20. Another option may be a fixed maximum such as $600.00 total combined for all specialists, annually, until the maximum is depleted for the current year.

Medical Supplies:

EHC will typically cover the purchase or rental of medical supplies such as:

  • Wheelchairs
  • Crutches
  • Walkers
  • Canes
  • Splints
  • Braces
  • Trusses
  • Cervical collars
  • Ostomy supplies
  • Oxygen
  • Respirators
  • Non-motorized hospital beds
  • Diabetic supplies

The insurer will usually set an annual maximum for all medical supplies such as $2,500.00 per year.

Coverage may also include:

  • Prostheses and accessories
  • Accidental dental coverage
  • Hearing aids
  • Ambulance

Prescription Drugs:

Prescription drug coverage in a personal plan covers prescribed drugs that are not available over the counter. The drug coverage will typically cover the lowest cost generic drug available. The private insurance sector is responsible for the majority of all drug expenditures making this one of the most valuable forms of any insurance plan. Drug limits vary from $500.00 for a guaranteed issue (no medical) plan up to $10,000.00 or even $250,000 per year. Adding catastrophic health insurance coverage as an add-on to a personal health insurance plan can provide a higher amount of drug coverage or even an unlimited amount and greater extended health care security.

Vision Care:

Vision care is often included with the base EHC plan and provides reimbursement toward the cost of prescription lenses, frames and contact lenses. The amount ranges from $100.00 every two years to $300.00 every two years. This benefit may also include coverage for eye exams.

Emergency Travel Medical Insurance:

Emergency travel medical insurance covers the Insured for the cost of emergency hospital and medical care when travelling outside of their province of residence or out of the country. The benefit typically covers an unlimited number of trips per year up to a specified number of days per trip, for example 30, 60, or 90 days. Some plans will only cover short trips such as nine days and offer the option of adding on extra days to the core plan at the time of applying for coverage. Some plans do not include any travel insurance coverage.

The contract will outline what pre-exiting condition limitations are applicable and what constitutes a pre-existing condition. Generally, a pre-existing condition includes any condition for which the insured had any symptoms, visited a doctor or was advised to do so, sought medical treatment, or took medication, whether the condition is diagnosed or not, if the activity in questions occurred within a specified period of time prior to departure. The time frame for varies from 90 days to 180 days typically.

The pre-existing condition period is measured from each departure date from the home province, and is not measured only from the plan’s inception.

Catastrophic Health Coverage:

Some insurers offer enhanced coverage to protect against catastrophic loss from serious accident or major illness at a reasonable rate. A deductible must first be satisfied, typically from $4,500.00 to $10,000.00 or more, after which the insured is protected against drug expenses. There may be limits per incident. Some plans have maximums of $10,000.00 to $25,000.00 and some provide unlimited coverage, with or without a lifetime maximum.

When designing the core plan one should factor in the core plan’s drug limit and the deductible for the catastrophic coverage to allow for seamless coverage.

Hospital Coverage:

Hospital coverage is typically purchased as an optional add on to a personal insurance policy. This feature provides for the additional cost of preferred over basic accommodation to be covered up to a stated maximum charge per day and a limited number of days per year.

Medically Underwritten v. Guaranteed Issue Plans:

A medically underwritten plan offers higher annual maximums because the insurer has the opportunity to review the applicant’s health in advance and determine the basis on which coverage will be offered. An underwriter will look for existing conditions, medication used or prescribed and not taken, practitioners used (massage etc.) amongst other factors and typically approve, decline the coverage and for some plans apply exclusions. The underwriter may request information from the applicant’s physician and review medical records. Though not common, a paramedical, urine specimens and blood chemistry profile may be asked for.

Some insurers will offer coverage but exclude all existing medications. Others may exclude the underlying condition.

A guaranteed issue plan does not require applicants to complete a health questionnaire but will typically offer coverage on a limited basis when compared to that of a medically underwritten plan. That being said guaranteed issue plans are ideal for those with pre-existing conditions that cannot get approved though traditional means.

Deductibles and Coinsurance:

The deductible is the amount of eligible expenses that the Insured pays each year before coverage begins. The deductible is paid before coinsurance is factored into the payment calculation of a claim. In addition to the deductible, the plan will usually have a coinsurance factor. Coinsurance is the cost-sharing percentage between the Insured and the Insurer. The term coinsurance typically refers to the percentage that the Insurer will pay and the co-payment represents the remaining percentage that must be paid by the insurer.

For example, if a plan has an annual deductible of $25.00 and 80% coinsurance, the Insured will pay the first $25.00 of eligible medical expenses each year, after which the Insurer will then pay 80% of the remaining eligible expenses incurred. The other 20% of the eligible expenses is known as the co-payment and is paid by the Insured. In summary, the Insured pays a 20% copayment on each $1.00 of eligible expenses incurred after the $25 deductible has been satisfied.

The deductible and coinsurance factors will vary.

Maximums:

A maximum time period may be used, such as a calendar year, benefit year or anniversary year. A calendar year follows the twelve month calendar year, from January to the end of December. A benefit year means the period of 12 consecutive months following the date a claim for a specific benefit is first incurred. An anniversary year is the consecutive 12 month period following the effective date of the insurance coverage and annually thereafter. Plans may use any one or all of these definitions.

In addition to annual maximums by benefit category, EHC may be subject to a lifetime maximum, such $100,000.00, or $250,000.00.

Drug Card:

Virtually every plan will provide the Insured with a drug card that is to be presented to the pharmacist when purchasing a prescription.

Dispensing Fee:

Some plans will limit or cap the amount that will be covered for the pharmacist’s dispensing fee. Any amount charged over the set cap must be paid for by the insured at the time that the medication is purchased. A dispensing fee is the fee charged for the professional services of the pharmacist when dispensing a drug which includes explaining how to take the drug and any side effects. Ontario pharmacies must post the fees in view of consumers when they fill a prescription. Dispensing fees vary from pharmacy to pharmacy ranging from $6.00+ to $14.00+ while most pharmacies are typically charging in the $10.00-$12.00 range. Some plans may share the dispensing fee (50%) with the insured. Shopping around for a lower dispensing fee could save you money.

Group Insurance v. Personal Insurance:

One might consider purchasing a personal health insurance policy when they have group coverage or in place of group insurance coverage for the following reasons:

  • To top-up their group insurance coverage and pay out of pocket amounts
  • Group Plans are not portable while personal insurance plans are fully portable, and one may be able to opt-out of the group health and dental if they already have personal insurance coverage for health and/or dental on their own
  • The majority of group plans are one size fits all and you get whatever is being provided to you whereas a personal plan can be customized to certain degrees
  • Most group insurance plans rates are based on claims whereas personal plans will typically have stable rates
  • A group plan may be designed a very basic level to accommodate an employer’s budget. A healthy individual and/or their family could purchase a more comprehensive personal health insurance plan and opt-out of the group health and dental coverage.
  • If an employer cannot get enough staff to participate in the group plan, they may not meet the requirements to have a group plan at all. In a case like this, the employer can mass bill individual plans for only the employees who want coverage. The coverage may be subject to full medical underwriting.

Leaving a Group Insurance Plan (Converting Coverage or Retiring):

If you are leaving a group plan some insurers allow for guaranteed coverage as long as you apply within 60 days of losing your group insurance coverage. This coverage will not be identical to your group coverage and will typically be less comprehensive than what is available on a medically underwritten basis. This option is ideal for those with pre-existing conditions as it offers a one-time option to purchase insurance that they would otherwise be declined for or have exclusions applied to.

Are Personal Health Insurance Premiums Tax Deductible?

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. Specific rules and limits apply, per The Canada Revenue Agency (CRA) guidelines.

Personal health insurance can be complex with each carrier having different offerings and medical underwriting can be stressful, please feel free to request a quote and we will be glad to help find the plan best suited for you.

Get a personal dental insurance quote and apply online:

Visit our online health insurance quote page for flexcare products if you are looking for health insurance and drug coverage only.

If you need better or different coverage, please feel free to request a quote.

Looking to learn about personal dental insurance?

Visit our personal dental insurance article for more information.

Personal Health Insurance  - The Ultimate Guide - Ontario, Canada

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