Canadians now pay roughly 30% of their healthcare costs directly out of pocket, according to a HuffPost Canada report. For a typical family of four with an average income of $156,086, that means about $15,847 per year flows out through taxes for public healthcare — and then you still pay separately for prescription drugs, dental visits, and eye exams. In 2023, total out-of-pocket health spending in Canada exceeded $35 billion, with prescription drugs, dental care, and vision care accounting for the largest shares, according to the Canadian Institute for Health Information.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
That 60% figure — roughly 27 million Canadians — mostly get coverage through their employer. But if you’re self-employed, work part-time, retired early, or between jobs, you’re on your own. Medicare covers doctor visits and hospital stays, but it explicitly leaves out prescription drugs, dental care, vision care, physiotherapy, and mental health counselling for most working-age adults. The question of whether private health insurance is worth it comes down to one thing: how much of those uncovered costs would land on your kitchen table. Here’s what you actually need to know.
What Private Health Insurance Actually Covers — and What It Costs
One term you’ll see on every application: medical underwriting.
What I tend to notice is that people focus on the monthly premium and ignore the underwriting question. That’s backwards. A low premium on a plan that excludes your asthma medication isn’t a bargain — it’s a waste of money. The coverage details matter more than the price tag.
The Real Cost of Skipping Private Insurance
To understand whether private insurance is worth it, you need to compare what you’d pay without it against what a plan would cost. The table below shows what Medicare covers versus what a typical private plan covers, and what you’d pay out of pocket without one.
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| Service | Medicare Covers? | Typical Private Coverage | Out-of-Pocket Cost Without Insurance |
|---|---|---|---|
| Prescription drugs | No (except Quebec & some low-income programs) | 70–90% after $25–$50 deductible | $200+/month for chronic conditions |
| Dental care (basic) | No | 70–90% up to $1,000–$2,500/year | $200–$600 per visit |
| Vision (frames & lenses) | No (exams only for children/seniors in some provinces) | $150–$300 every 2 years | $200–$600 per pair |
| Physiotherapy / chiropractic | Limited or none | $300–$600 per service/year | $70–$130 per session |
| Mental health counselling | No | $300–$600 per year | $150–$250 per session |
| Hospital room upgrade | Public ward only | Semi-private or private room | $200–$400/night |
Here’s a real scenario. A 45-year-old with high blood pressure who takes a daily medication costing $150 per month, sees a dentist twice a year for cleanings at $300 total, and buys one pair of glasses every two years at $400. Without insurance, that’s about $2,300 per year. A basic individual plan costing $80 per month ($960/year) would reimburse most of it. The math works in favour of insurance for anyone who uses these services regularly. If you’re healthy and rarely visit a dentist or pharmacy, the numbers look different — and that’s where the common mistakes creep in.
Four Mistakes That Cost Canadians Money
Assuming Medicare Covers Everything
This is the most expensive assumption. Many people don’t realise that Medicare covers only about 70% of healthcare costs, according to data from Insurance Informant. The remaining 30% includes things like ambulance rides, which aren’t covered in most provinces except Yukon. A single ambulance trip can cost $400–$800. If you don’t have private insurance, that’s entirely on you. Walk through your actual spending from the past year — not just what you think you might need — and see where the gaps are.
Ignoring Provincial Drug Programs Before Buying Private Insurance
Every province has some form of public drug coverage. Ontario has OHIP+ for residents under 25 and the Trillium Drug Program for low-income households. British Columbia runs Fair PharmaCare based on income. Quebec has a mandatory public prescription drug insurance plan. Many people buy private insurance that duplicates coverage they already qualify for through these programs. Lifetime’s Canada guide notes that checking provincial eligibility first can save you from paying for overlapping coverage. The fix: check your province’s drug program before you apply. If you qualify, you may only need a private plan that covers dental and vision — not prescription drugs.
Overlooking Pre-Existing Condition Clauses on Individual Plans
Individual plans require medical underwriting. If you have a condition like diabetes, asthma, or high cholesterol, the insurer can exclude it from coverage or impose a waiting period of 3–12 months. Group plans through an employer or professional association don’t do this. What I see happen most often is someone leaves a job with group coverage, buys an individual plan assuming it works the same way, and then discovers their regular prescription isn’t covered. A health insurance guidebook can help you compare policy wording, but the real safeguard is reading the exclusions section before you sign.
- Check what your provincial drug program already covers
- List your regular prescriptions and their monthly costs
- Note any chronic conditions diagnosed in the last 5 years
- Count how many times you visited a dentist, physio, or massage therapist last year
- Check if your employer or professional association offers a group plan
Buying the Wrong Amount of Coverage
Comprehensive plans can run $200–$400 per month for a single adult, according to Insurance Curator. If you’re relatively healthy, you might not need a plan that covers paramedical services up to $1,000 per year. A basic plan at $80–$150 per month with 60% reimbursement on key services might be enough. The mistake is buying too much coverage you won’t use, or too little that leaves you paying for the things you actually need. Match the plan to your usage patterns — not to what the insurer’s brochure says is “comprehensive.”
A Practical Guide to Choosing and Buying Private Health Insurance
Start With What You Already Have
Before you compare plans, know what you’re already entitled to. If you’re a veteran, a First Nations person, or a senior, you may have federal or provincial benefits that cover some of the same services. If you’re under 25 in Ontario, OHIP+ covers prescription drugs. If you’re in Quebec, you’re already required to have prescription drug coverage through RAMQ or a private insurer. Understanding your starting point prevents you from paying for coverage you don’t need. For a deeper look at how different plans structure their networks, read our guide on understanding your healthcare network coverage in Canada.
Compare Plans by What Matters Most
Not all plans are built the same. Focus on three things: the annual maximum for each service, the co-insurance percentage (what the insurer pays versus what you pay), and the deductible. A plan with a low premium but a $1,000 deductible and 60% co-insurance on prescriptions will cost you more in the long run if you take regular medication than a plan with a higher premium, a $250 deductible, and 90% co-insurance. Use a comparison tool or talk to a licensed insurance broker who can show you side-by-side quotes from multiple providers like Manulife, Sun Life, Blue Cross, and Canada Life.
The Application Process Step by Step
- 1Gather Your Health HistoryYou’ll need a list of current medications, any chronic conditions, recent surgeries, and past hospitalisations. Be honest — insurers can deny claims later if they find omissions.
- 2Choose Your Plan TypeDecide between individual, family, or group coverage. Group plans through an association often have lower rates and no medical underwriting. Individual plans are portable but require underwriting.
- 3Submit the ApplicationComplete the medical questionnaire. The insurer reviews it and may request additional records from your doctor. This underwriting process takes 1–4 weeks.
- 4Review the Policy DocumentsCheck the annual maximums, deductibles, co-insurance rates, and any exclusions. Confirm the waiting periods for specific services like maternity or major dental work.
- 5Add Riders if NeededConsider optional extras like travel medical coverage ($1M–$5M per trip), orthodontic coverage for children, or hospital room upgrades. These riders add cost but fill specific gaps.
What’s Changing in 2026
More insurers are offering flexible or modular plans that let you pick and choose coverage areas rather than buying a bundled package. Health spending accounts (HSAs) are also growing in popularity among self-employed Canadians and small business owners, according to Lifetime’s Canada. HSAs allow you to set aside pre-tax dollars for eligible medical expenses, and reimbursements are tax-free. If you’re incorporated, an HSA can be a tax-efficient alternative to a traditional insurance plan. For more on how to make the most of these accounts, see our tips for using health savings accounts in Canada.
Frequently Asked Questions
Do I need private health insurance if I’m healthy and rarely see a doctor? ▾
Can I get private insurance if I have a pre-existing condition? ▾
What’s the difference between a health spending account and private insurance? ▾
Does private insurance cover travel outside Canada? ▾
How long does it take for private insurance to start after I apply? ▾
Can I keep my private insurance if I change jobs or move provinces? ▾
Private Insurance Is a Bridge, Not a Solution
Private health insurance fills the gap between what Medicare covers and what your actual healthcare costs. But it’s not a replacement for the public system, and it’s not always the right financial move. For someone with chronic prescriptions and regular dental visits, the numbers usually favour buying a plan. For a young, healthy adult with no regular medical costs, self-insuring — paying costs as they come — may be cheaper. The judgement call comes down to your specific health profile, your provincial benefits, and your tolerance for surprise bills. If this was useful, you might also want to read understanding personal insurance for hospital stay coverage.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
Sources and Further Reading
10 tips to choose the right health insurance provider in Canada — Next steps on narrowing down insurers and comparing quotes effectively.
Understanding high-deductible health plans in Canada — A closer look at how deductible levels affect your total costs and whether a high-deductible plan makes
