Canada Health Insurance

While children, seniors, and social assistance recipients in Canada are three groups of people that are provided coverage for health services that the public healthcare system does not typically provide for other Canadian residents, all other individuals must obtain the additional coverage through a private health insurance plan. Because health insurance plans greatly differ from one another, and because many factors have to be taken into account, health insurance rates vary.

Overview of Health Insurance Rates
Supplemental insurance plans generally pay from 40% to 80% of the cost of particular healthcare needs such as: dental, vision, psychologists, podiatrists, chiropractors, hearing aids, and certain types of medical equipment. They also provide health coverage while travelling outside of Canada. The percentage of healthcare costs paid by the plan is one of the many factors that affect health insurance rates: high percentage = high rate.

Insurance carriers assume varying levels of risk with each person or group of individuals they insure, and varying levels of risk translate to varying costs. Auto insurance is a good example to demonstrate the correlation between risk and rate: a married 45 year old man driving a sedan will pay a lesser rate than a single 20 year old woman driving a red sports car. The risk is less with the man because his age, marital status, and type of vehicle he drives is taken into account. Health insurance is very similar. A 45 year old male smoker will pay a higher rate than a 45 year old male non-smoker because the health risk factor is taken into account.

Factors that Affect Health Insurance Rates

• The number of individuals covered under the plan – The rates are higher when an insurance carrier has to provide coverage for not only the applicant but also family members.
• What the plan covers and what it does not – Plans that offer extensive coverage are typically more expensive than plans with less coverage.
• Coverage for visits to specialists or for special procedures – This type of coverage is costly for the insurance carrier, and consequently costly to the applicant as well.
• Coverage for prescription drugs – Whether or not a plan offers prescription drug coverage and the extent of the coverage plays a significant role in determining health insurance rates.
• Coverage for pre-existing conditions – A pre-existing condition is defined as a person’s predisposition to certain illnesses or to potential hospitalization; hence, such a health risk will typically entail a high insurance rate.
• The amount of co-insurance or co-payment – Low co-insurance or co-payments usually mean high health insurance rates because the individual absorbs but a small amount of the cost of services while the remaining balance is absorbed by the insurance provider.
• The amount of the annual deductible – The higher the annual deductible, the lower the insurance rate because the insured will be paying a higher percentage of the cost of services.
• Family medical history – If you have a family history of high blood pressure, heart attacks, or other hereditary illnesses, you are considered a high risk; therefore, high rate.
• Whether or not you smoke – Smokers are more likely to develop certain health conditions than non-smokers, so it is more costly to insure them.
• Gender – Research indicates that women are generally healthier than men because they see doctors more often, therefore, men are a higher risk than women.
• Weight - If you are overweight or obese, you are high risk as you are likely to develop various illnesses or conditions.
• Marital status – Married individuals live longer than those who remain single for most of their lives, a fact that affects insurance rates.
• Profession – Individuals involved in hazardous professions will be quoted higher rates because they are at high risk of injury or illness.
• Location – Some cities and locations are rated healthier than others, which makes health insurance rates for certain locations lower than others.

Rule of thumb: individuals who are viewed as high risk will typically cost the insurance provider more in the long-run; consequently they are charged a higher rate than those who are perceived as low risk.

About the Author:
Adriana Stefania is a freelance writer for Canada Health Insurance. For more information on health insurance for Canadians please visit www.canada-health-insurance.com.