Health Care Coverage and Costs in Retirement
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Health care coverage and costs should be an important consideration in your retirement planning. You need to have an idea of what coverage you will need and the associated costs, and then plan accordingly.
When we are younger, most of us don't think much about health care. We don't tend to have the health issues that come with age. Many of us are fortunate enough to have employer-sponsored health benefits to minimize the cost of our drug, dental and other health care benefits while we are working.
As you get older, the cost to maintain your health increases. Canadians spend about $15 billion a year on prescription drugs, about half of which are purchased by seniors as they are more likely to have chronic health problems which require regular medication.
Because of high costs, more and more companies are discontinuing the practice of extending health benefits coverage for their former employees as they retire. Even if you currently work for a company that has health benefits in place for retirees, you should consider that they may not continue to offer them in the future.
What follows are summaries of provincial health care coverage. In addition, there is some information on supplemental health insurance plans for those interested in additional health care coverage for services not covered by provincial plans.
PROVINCIAL HEALTH COVERAGE FOR SENIORS
Each province has a health plan that covers a wide range of services for their residents, with special coverage for seniors.
The provinces have restrictions on how long you must reside in that province in order to maintain your health benefits coverage. You must be physically present in that province for a specific amount of days in any 12-month period and make your permanent and principal home there. If you meet these terms, you will have coverage for most medically necessary health services at home or when you are travelling outside that province, in or outside Canada.
Most of the provinces have similar coverage for many benefits. Income, in most cases, determines whether you are eligible for coverage of a certain benefit and determines the cost, if any.
Here are the more common benefits for seniors across the provinces:
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Eye Care |
Covered ? One eye exam by a medical doctor or
optometrist every year; some provinces also provide one colour vision test
every year ? Other medically necessary care such as
cataract surgery ? In some provinces, seniors may borrow
visual devices if they have low vision, if they are eligible Not
covered ? Eyeglasses and contact lenses Note: In |
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Hearing |
Covered ? Hearing tests, if ordered by a doctor ? Part of the cost of a hearing aid, if they
are eligible Not
covered ? Services provided by audiologists for
fitting and evaluation of hearing aids |
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Physiotherapy |
Covered ? Therapy received in a hospital or in a
licensed physiotherapy clinic Not
covered ? Services provided in private clinics |
|
Dental Services |
Covered ? Some dental surgery that must, by
medical necessity, be provided in hospital Not covered ? Dental services provided in a dentist's
office Note: In |
|
Equipment |
Covered ? Partial coverage of supplies including
mobility aids, supplies for insulin dependent diabetics, respiratory
equipment, oxygen and oxygen delivery equipment, wheelchairs, orthopaedic
braces and breathing aids (based on income) Note: In |
|
Chronic Care |
Covered ? Room, board and other basic necessities
in addition to medical care (rate is determined by the patient's monthly
income and the number of dependents that the patient has; the maximum
co-payment in |
|
In-Home Services |
Covered ? Partial coverage for services including
nursing care, physiotherapy, palliative care, personal support services such
as bathing and dressing, and meal preparation (determined thorough needs
assessment) |
PROVINCIAL PRESCRIPTION DRUG PLANS
More than three-quarters of households with at least one senior report prescription drug spending, at an average of more than $500 annually. Prescription drugs make up the largest portion of out-of pocket health care spending for senior households (27.3% of their health care budget was allocated to this item).
Senior households with prescription drug expenses also tend to be on a fixed income. Almost 60% relied on government benefits as their major source of income.
Canada doesn't have a uniform drug plan. The provinces have different plans for coverage of prescription drugs bought in that province. In some provinces, the senior must pay a co-payment, which is the portion of the prescription that is paid each time a prescription is filled. In other provinces, the senior must pay an annual premium. Some provinces have a combination of both co-payments and premiums.
Some of the plans automatically enrol you so you are entitled to receive benefits for the cost of drug products from the first day of the month after you turn 65. In other provinces, you are notified that you have to enrol in them to have coverage.
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In If you or your spouse was born in 1939
or earlier, 75% of your eligible costs are covered for the rest of the year
(otherwise it is 70%). Families are assigned a family maximum (% of your net family income). ?If you reach your family maximum, 100% of your eligible drug costs are covered for the rest of the year. |
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Eighty-five per cent of seniors will
either not be required to pay a premium or will have their premium reduced by
25% or 50% based on their taxable income.?
Depending on their income, some seniors won't pay a co-payment or a
premium. Seniors with a slightly higher income will pay a co-payment, but not
a premium. Other seniors will pay a co-payment and a monthly premium. |
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Seniors pay a maximum of $15 for their
prescription drugs (if a drug costs less, they pay less). |
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Residents have 100% of drug costs
covered once the income-based deductible is reached.? The minimum annual deductible is $100 and
the maximum is 6.08% of your family income. |
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If you are a single senior with an
income of less than $16,018 a year, or you are part of a senior couple and
your combined income is less than $24,175 a year, you may be asked to pay up
to $2 for each prescription filled. |
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Residents must
pay a premium, whether or not they purchase prescription drugs, which varies
from $0 to $585 per adult, depending on net family income.? Seniors receiving
94% to 100% of Guaranteed Income Supplement (GIS) don't pay the premium (the
current maximum annual benefit for a single person, for example, is $7,830). |
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Seniors receiving the Guaranteed Income
Supplement (GIS) are required to pay a co-payment of $9.05 for each
prescription, up to a maximum of $250 in one calendar year.? Seniors who qualify based on their
annual income are required to pay a co-payment of $15 per prescription. |
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Seniors must pay the first $11 of the
medication cost plus the pharmacy professional fee for each prescription. |
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Seniors contribute to the program in two
ways, through a premium and a co-payment.?
The premium is the fee that is paid each
year to join the program and is currently $424.? It may be reduced or waived entirely
depending on their income level or if they receive the Guaranteed Income
Supplement (GIS). The co-payment is 30% for each prescription,
with an annual cap of $382. |
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The cost for the drug ingredient is paid
by the |
You should check with your provincial health plan provider to determine the details of your province's specific plan. Each has a website with detailed information and toll-free telephone numbers. Entering "[your province] seniors drug plan" into a search engine such as Google will provide you the results.
In addition, Veterans Affairs Canada provides a wide range of benefits and services, including prescription drugs, to qualified veterans, still-serving Canadian Forces members, RCMP members, and certain civilians as well as their dependants and survivors.
SUPPLEMENTARY HEALTH INSURANCE PLANS
You can purchase supplemental health insurance plans such as Blue Cross. Premiums are charged and then these programs reimburse you for costs associated with an illness or accident which aren't covered by the provincial health plans, such as prescription drugs, registered specialists and therapists, dental care, vision care, etc.
Meet Harvey and Sylvia, a retired couple. Harvey is 70 years old, 5 feet, 9 inches, and 190 pounds. Sylvia is 66 years old, 5 feet, 5 inches, and 150 pounds. Both are non-smokers.
Depending on the level of benefits chosen, here are examples of the ranges of their Blue Cross monthly premiums if they lived in British Columbia, Ontario or Quebec:
Their premiums will increase as they get older.
SUMMARY
Most of us look forward to our senior years as a time of freedom, a chance to do all the things we didn't have time to do while in our working years.
Modern medical technology allows us to live longer fuller lives, but there is a cost.
It's important to be aware of what health care benefits will be provided to you and plan accordingly so you can ensure you have the coverage you need to enjoy the retirement you always dreamed of.
Author: Teena Dawson, www.teenadawson.com
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