Despite living in Canada, where we have universal healthcare, it is still worth considering what costs might need to be footed out of pocket. Because there is a fair amount that is not covered by our “universal” healthcare, despite what the terminology might initially lead you to think.

The unsexy bottom line is…you need health insurance. What each person will want to have covered will vary depending on your level of caution and personal/family history.

But get health insurance.

In More Depth…

It can be strange as a healthcare provider to consider healthcare from the other perspective. Some of us, from various trainee stages up to staffhood, may be lucky enough to not have had much interaction with the healthcare system from the patient or family member end.

For someone planning out financial independence +/- early retirement, it is worth thinking about what costs might come your way, especially if you do not have healthcare coverage through work/retirement benefits.

Compared to our neighbours south of the border, healthcare expenses are a much smaller consideration in the overall financial picture in Canada, especially for people without chronic health conditions. Our healthcare system covers many costs. Many, many costs.

But not all.

And some of those costs might still break the bank.

Covered

• Hospitalization – room, food, medications, procedures, medically-indicated surgeries, in-hospital equipment, etc. (private rooms cost extra though)
• Maternal care
• Physician visits (e.g. family practice, specialist clinic, office procedures). However, there are private options now as well, where a patient might pay for ancillary services.

Not Covered or Partially Covered

• Prescription medications
• Home care
• Long term care
• Dental care
• Vision care (by optometrists)
• Psychotherapy (unless provided by an MD physician)
• Fertility treatments (except in Quebec – fully covered)
• Cosmetic surgery
• Some elective surgeries
• Medical assistive devices (e.g. wheelchairs)

There are some exceptions (e.g. based on age and indigenous status) that are beyond the scope of this post.

Scenarios in Which Healthcare Breaks Your Bank

Any of those not-covered or partially covered costs could potentially pull your savings into an infinite black hole.

Expensive Medication Needs

“Ah, who cares. I’ll just choose not to go on the expensive medications.”

Well. You might say no to expensive medications for yourself.

Would you say no to expensive medications for your child, if it could make a difference in their longevity or quality of life? Would you say no to expensive medications for your partner, for your parents?

The amount of money that people directly spend on healthcare has only increased over time, the largest categories in this spending bring drugs (33%) and non-physician healthcare professionals (33%).

In 2017, out-of-pocket health spending was over $970 per person. This is much increased from the 1988 amount of $278. Using this inflation calculator, $273 in 1988 is worth $503.71 in 2019. So, the rise in cost cannot be accounted for by inflation alone. Per person, drugs were $682 on average, other professionals: $684 (Canadian Institute for Health Information. Health Expenditures in the Private Sector — Private-Sector Chartbook, 2019. Ottawa, ON: CIHI; 2019.)

$682? In a year? Meh. (Bear it mind that this is the average – which means some people spend a lot more than $682, and some people spend $0. We don’t know what the spread of numbers is, that gave this average.)

To continue – $682 in a year, on average doesn’t sound too bad.

But here are some sobering figures.

Canadian Institute for Health Information (CIHI) data from 2018: