Hidden Healthcare Costs for Canadian Retirees (and How to Prepare)

Canada has a robust universal healthcare system, but that doesn't mean that all healthcare expenses are covered. When living on a fixed income in retirement, every cost adds up, and the last thing you want is to be surprised by hidden healthcare costs.

Here, we explain what Canadian Medicare does and doesn't cover and explain some of the healthcare costs that you should expect to pay in retirement.

What Canadian Medicare Does (and Doesn't) Cover

Before we look at the hidden healthcare costs for Canadian retirees, let's look at what the country's publicly funded health system, Canadian Medicare, does and doesn't cover.

According to the Commonwealth Fund, "all citizens and permanent residents receive medically necessary hospital and physician services free at the point of use." The Commonwealth Fund also includes that citizens must pay for excluded services, "such as vision and dental care, outpatient prescription drugs, rehabilitation services, and private hospital rooms."¹

Each territory has its own regional system, though, and coverage may vary between provinces and territories. In addition, each province has its own enrollment standards and requirements.

For example, here is what the Ontario Health Insurance Plan (OHIP) covers:

• Visits to all doctors
• Hospital visits and stays
• Lab testing in community labs or hospitals
• Medical or surgical abortions
• Eligible dental surgery in hospitals
• Eligible optometry/eye health services
• Podiatry
• Ambulance services
• Travel for health services if you live in northern Ontario²

OHIP does not cover:

• Prescription drugs provided in non-hospital settings
• Dental services provided in a dentist's office
• Eyeglasses and contact lenses
• Laser eye surgery
• Cosmetic surgery

As you can see, while regional health insurance systems cover a lot, they don't cover everything. This brings us to the list of potential healthcare costs in retirement.

Hidden Healthcare Costs for Canadian Retirees

If you rely solely on Canadian Medicare and your territory's plan, you can expect to pay out of pocket for the above expenses, including:

• Dentist visits and all associated care
• Prescription drugs
• Over-the-counter drugs
• Optometry services, including exams, glasses, and contacts
• Eye surgery not performed in a hospital
• Hearing care, including hearing aids
• Ambulance transportation services if not deemed medically necessary
• Physical therapy
• Assistive devices such as a cane or wheelchair
• Home and car modifications if you have a disability
• Private or semi-private hospital rooms
• Nursing homes or other residential care facilities
• Home care services

So how can you avoid these hidden costs? The best thing you can do is research your insurance options and pay for a private insurance plan that covers everything your federal insurance doesn't. There are many options for private health insurance, and some providers provide discounts for retirees.

There's no denying that without insurance, healthcare costs in Canada are expensive! According to International insurance, an MRI could cost over $2,000 and lab tests could be over $360. The Globe and Mail estimates that the average retiree in Canada may need to pay about $5,000 a year in out-of-pocket medical expenses.^2,3

Because of this, it's important to properly plan for all of your expenses in retirement, including healthcare. By creating a comprehensive retirement income plan, you can rest assured that you won't face any hidden costs or unexpected expenses.