What Is Private Health Insurance and Do You Need It?
Learn how private health insurance works in Canada, and when it becomes an important part of your financial plan
Canada’s public health system provides access to many essential services, but it is not designed to cover everything. Dental visits, prescription drugs, therapy, vision care, and travel insurance are just a few of the areas where Canadians often pay out of pocket. That is where private health insurance comes in.
Private health insurance helps fill the gaps left by public coverage. It can reduce your out-of-pocket expenses, protect you during travel or job transitions, and support long-term wellness strategies. Whether you need it, and what kind, depends on your personal situation.
What Private Insurance Covers That Public Plans Often Don’t
Each provincial health plan covers medically necessary care like hospital visits, surgeries, and doctor consultations. But beyond that, Canadians are often responsible for common health-related costs that can add up over time.
Here is how public and private coverage typically compare:
| Service | Public Insurance | Private Insurance |
|---|---|---|
| Hospital and doctor visits | Covered | Not needed unless for upgrades (e.g., private room) |
| Prescription drugs | Limited coverage | Covers outpatient medications, especially for adults |
| Dental care | Not covered | Covers cleanings, fillings, and procedures |
| Vision care | Not covered (except children/seniors) | Covers exams, glasses, and contacts |
| Therapy and counselling | Limited or not covered | Covers psychologists, social workers, and more |
| Paramedical services | Not covered | Includes massage, physiotherapy, and chiropractic |
| Medical equipment | Partially covered | Expands options and improves affordability |
| Emergency travel medical | Not covered | Covers urgent care abroad or in other provinces |
Tip: If you use these services more than once or twice a year, private insurance can help reduce your long-term costs and give you more control over your health care choices.
How Private Insurance Works in Canada
Private health insurance is available through:
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Group benefit plans provided by employers
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Individual plans purchased directly from an insurance provider
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Health spending accounts (HSAs) that reimburse you for eligible medical expenses
Plans vary in cost and coverage levels. Some focus on core health needs, while others include wellness services, mental health support, or travel coverage. You can also choose add-ons for specific concerns like catastrophic drug coverage or dental benefits.
Note: If you are self-employed, you can often deduct private health premiums through your business, depending on how your income is structured.
When Private Insurance Becomes Important
Private health insurance may be a good fit if you:
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Do not have access to employer-sponsored benefits
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Are retired or planning to retire soon
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Have recurring medical costs like prescriptions or therapy
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Want faster access to services like physiotherapy or counselling
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Travel frequently and need protection outside your home province or Canada
Caution: Before buying a plan, review what services you already access and calculate the typical costs. Paying for coverage you do not use can be more expensive than paying out of pocket.
Finding the Right Balance Between Public and Private Coverage
Private health insurance is not a replacement for public coverage. It is a supplement that helps reduce financial strain, improve access, and offer peace of mind for services not covered by your province.
For many people, especially those in transition such as changing jobs, retiring, or self-employed, private coverage offers valuable flexibility and control. The key is matching the coverage to your real needs and revisiting your plan as life changes.