Canada's healthcare system isn't as "universal" as most people think. The reality is, it doesn't cover all medical costs. And if you have a pre-existing condition or fall outside certain age groups, you can be turned down for many health insurance plans.
If you don't have coverage through your job or a plan that was in place before you needed care, you could be facing some significant medical bills.
Yes, even in Canada.
Prescriptions alone are costly for many Canadians. Fortunately, guaranteed issue health insurance is available in Canada and can help reduce your healthcare costs by quite a bit.
Let's take a look at how these plans work and what they can cover.
What Is Guaranteed Issue Health Insurance?
To state the obvious, it's exactly what it says in the name - health insurance that is guaranteed to be issued when you apply.
In other words, the insurance companies offering these plans guarantee issuance regardless of your age, pre-existing conditions or anything else that could make you ineligible for underwritten plans.
Medically underwritten plans, on the other hand, require medical exams and may have various requirements that have to be met. You've got three possible outcomes when you apply for an underwritten plan:
- You're accepted
- You get a counter-offer, usually excluding the pre-existing condition from your coverage
- You're declined
With a guaranteed issue plan, you've got one possible outcome - accepted.
What If You're Losing an Employee Health Insurance Plan?
While guaranteed issue plans ensure you will be accepted, there are some situations where there can still be conditions. One of the most common is a group conversion plan.
Group conversion plans are for people losing employee benefits that want an insurance plan to continue the coverage. This could be due to retirement or leaving the job for some other reason such as becoming self-employed.
These plans usually have a fairly short window of time, like 30 or 60 days, when you can get guaranteed coverage. As long as you apply within that window of time, they guarantee issue for the new insurance plan.
That's not to say the group conversion plan will always carry over everything from the employee benefit plan it's replacing. You may have lower coverage maximums, more excluded items or other limitations versus the previous plan.
Is There a Catch to Guaranteed Issue Plans?
When something sounds too good to be true, there's often a catch. Guaranteed issue insurance is no different. There are some trade-offs necessary to avoid the medical exam and other requirements you would have to meet with an underwritten plan.
The biggest difference between the two types of insurance plans is coverage. Guaranteed issue plans usually have lower maximums for coverage amounts and they may also have more exclusions.
You should consider these limitations when choosing a plan. In some cases, you might find that you'd spend less on the health care costs themselves than you would on the insurance. This is especially true if your plan has low maximums or complete exclusion for certain types of costs.
Exclusions are one factor that can make a big difference. For example, if you need a certain type of medication on an ongoing basis and the plan you're considering doesn't cover it, you would end up paying for the cost of the insurance on top of the cost of the medication.
Make sure the plan you're considering is going to meet your particular needs.
Health Care Costs in Canada Are on the Rise
Health care costs have more than doubled for Canadian families over the last 20 years. Depending on the number of people in the family, average annual costs range from $4,640 to $12,935.
That's much different from the "free health care for all" that many people consider one of Canada's biggest selling points. In reality, only about 70% of health care costs in Canada are paid for by the government.
And the other 30% can add up pretty quickly.
There are many things that are not covered, including:
- Upgraded/preferred hospital rooms
- Private nursing services, including home care for the elderly or infirm
- Some prescription renewals
- Medical "notes" required for work, school or insurance reasons
Essentially anything that isn't considered "medically necessary" probably won't be covered by the universal health care system.
Plus, insurance companies can reject coverage for many reasons, which can make it challenging for some people to even get insurance coverage in the first place.
Guaranteed issue health insurance is the best way to avoid rejection and get the coverage you need to help lower those costs that seem to keep going up from one year to the next.
What Can Be Done About the Increasing Cost of Health Care?
This is the $100,000 question, isn't it? Probably with a bunch more zeroes than that, in fact. Governments around the world would love to find the answer to that question.
One of the biggest parts of out-of-pocket health care costs for many Canadians is the cost of prescriptions. Canada is one of the few countries in the world with a universal health care system that doesn't include coverage for prescription drugs.
Because those costs are such a large piece of the pie, they drive up the prices of private health care plans, guaranteed issue or otherwise. If they were included in the universal health care coverage, it could help reduce the out-of-pocket expenses for a lot of Canadians.
Another thing that leads to Canadians having to pay out-of-pocket for their health care is losing a job. A lot of companies provide extended health benefits and if someone loses their job, their health care coverage likely goes along with it.
One possible way around this problem would be to take a page out of regulations already in place for life insurance coverage. If you lose your job, and your life insurance plan along with it, insurance companies in Canada have to allow you to convert the plan to an individual insurance plan to continue coverage.
And you have to be able to do so with no medical exams or other requirements along those lines. In other words, this term life insurance guarantee is effectively the same thing as a guaranteed issue health care plan.
The difference is, there are rules and regulations in place that require life insurance companies to offer this option to everyone. If the same kind of rules applied to health care insurance, it might lead to more guaranteed issue options for people leaving their jobs.
That's not to say insurance companies aren't moving forward, mind you.
Guaranteed Issue Health Coverage Enters the 21st Century
Health care insurance is keeping up with the times. One of the hot-button topics in Canada (and many other places) over the last decade is the legalization of cannabis.
Guaranteed issue health care plans have even started covering the cost of medical cannabis. The fact that they are quick to adjust to new realities is a good sign and seems to show that these guaranteed plans aren't going anywhere.
How Do You Choose the Best Plan for Your Needs?
There's obviously a lot to consider when choosing your health care insurance. One of the most valuable things you can do when choosing your health care plan is to learn some health insurance basics.
Understanding some of the language used by insurance companies, such as deductibles and copays, will help you make sense of the different insurance plans you're considering.
It also doesn't hurt to do a bit of research into how insurance works in some other countries. The United States' Affordable Care Act, commonly known as the ACA or Obamacare, is probably the most well-known system in recent years. It has a lot of differences from the universal health care system covering Canadians (including some rules about guaranteed issue coverage) but reading up on it can give you some idea of what kind of changes could happen down the road in Canada as well.
Arming yourself with knowledge is one of the best ways to ensure you get the best plan for your needs, at the right time, for the best price.
Trouble is, it can be time-consuming to track all that information down. And if you don't know where to look, you may miss options - some of which could be the ideal fit for your needs.
Fortunately, you don't have to do it all yourself. Insurdinary.ca works hard every day to put together the latest information and best deals for health care insurance, from a wide range of sources.
You can compare coverage from most of the major insurance and financial institutions in Canada and apply online right from our website. It's fast, easy and best of all, completely free of charge.
Health care insurance is something you hope you'll never need but appreciate if you ever do. Visit us today to find the best-guaranteed issue health insurance plan for your needs and rest easy that you and your loved ones will be covered.