Buying private health insurance
By Peter Diekmeyer • Bankrate.com

Canadians look at public health care as more than just a birthright. It is one of the characteristics mentioned most often in surveys about how we define ourselves as a nation.

Yet it's no secret that our health care system is on the ropes. Burdened with an aging population, governments struggle to fund the system adequately and have trouble keeping up. As a result, private health insurance is expected to play an ever-expanding role for more and more people in coming years.

Medicare has long been far from perfect. A wealth of medical expenses are excluded or just partially covered. These include dental and vision care as well as certain tests and procedures. Worse, getting timely access to existing services is increasingly challenging. By some estimates the government-funded proportion of our nation's health bill has dropped to as low as 60 percent.

"If you need to get a nonemergency MRI scan from a hospital, you could end up waiting a long time," said François Boisjoli, vice-president (group insurance) at SSQ Financial Group in Sainte-Foy, Quebec. "And if you're not covered by a private plan, paying for the scans could cost you several hundred dollars."

Private health plans through work
By far the majority of Canadian private insurance coverage originates at the workplace. It is typically provided through group insurance plans administered by companies such as SSQ Financial Group, the nation's fifth-largest provider with $743 million in premiums collected during 2003.

Group insurance plans usually comprise life and disability insurance, health and dental benefits, extended medical care and prescription drug coverage in most provinces.

The plan's costs are typically split between the employer and employees. In general, employees in a designated group are automatically accepted for the health portion of the coverage. Although most fill out a detailed medical questionnaire, this is usually for the life and disability portion of the group insurance.

Individual coverage
Those not covered at work, such as people who are self-employed or on contracts, must resort to individual health coverage by companies such as Blue Cross. According to Guillaume Fauteau, a Blue Cross support counsellor, coverage offered is fairly standard across the country, but there are some important regional differences.

"Health care is a provincial jurisdiction," Fauteau says. "And services that are covered by Ontario may not be in Quebec and vice versa."

Individual plans tend to be more expensive to administer than group plans. As a result, they often cost more (and because employers often cover half or more of the cost of group plans, individual plans seem much more expensive by comparison).

Nevertheless, the coverage offered is extensive. For example, Blue Cross's Health Plus plan offers benefits that include a semi-private room upon hospitalization (medicare typically only provides a common dormitory), extended health care coverage for physiotherapy, acupuncture and psychological treatment, as well as vision and dental care.

To qualify for an individual plan, you'll have to complete a medical questionnaire, give the insurance company permission to see all of your doctor's files and maybe even undergo a physical (at your own cost). You should also keep in mind that under most individual plans, you are not covered for any pre-existing conditions, whether it's allergies or AIDS.

Before agreeing to any plan, make sure you get written quotations from at least three suppliers and check the coverage they offer carefully. Also be aware that health insurance rates increase significantly as you get older.

For all of these reasons, many self-employed people decide against buying private health insurance and instead opt to claim whatever medical expenses do arise on their taxes. For more information, check out Bankrate's article on how to claim medical expenses.

The downfall of professional discounts
Some professional organizations, like the Periodical Writers' Association of Canada, have sought to reduce the costs of individual health coverage by negotiating group rate deals for their members. These packages should be taken with a grain of salt.

Health care packages are notoriously hard to compare. By changing a few lines in the contract to amend exemptions or increase the deductible portion, insurance companies can drastically reduce their policy's selling price. So, it can be difficult to figure out if getting an individual policy would be better than going with your professional organization or not. You may wish to engage the services of a professional insurance broker to help you analyze your options.

The bottom line is that it pays to do your own research before blindly accepting the recommendation of a professional services organization of which you are a member.

Travel insurance
Although Canada's health care system has its shortcomings, its strengths quickly become apparent when you travel. Canadians who require medical care while outside the country are responsible for covering their own expenses. These are typically only partially reimbursed by provincial health care authorities.

But the amounts can add up. Hospital stays can cost hundreds of dollars per day. In the case of major surgical interventions, the bills can run into the tens of thousands of dollars.