Insights & advice
Guide to out-of-pocket expenses in health insurance
Feb. 2022 – 15 min read
Key takeaways
Healthcare costs not covered by insurance, that you pay for, are called “out-of-pocket” expenses
There are a variety of expenses that aren’t covered by either provincial/territorial plansOpens in a new window, employer or personal health insurance
Many out-of-pocket expenses are tax deductible
What are out-of-pocket expenses in health insurance?
Healthcare costs that aren’t covered by insurance, and that you pay for with your own money are called “out-of-pocket” expenses. Some out-of-pocket expenses not covered by provincial/territorial health insurance plans include:
- Most eye exams
- Dental care
- Some prescription drugs (for most people)
- Procedures considered to be cosmetic in nature
- Parking at a hospital
- Some ambulance fees
- Medical accessories such as casts, crutches, wheelchairs, etc.
- Healthcare paperwork such a doctors’ notes, transferring medical files, or filling out forms
Even if you have health insurance, you’ll likely end up paying some out-of-pocket expenses. These may include:
Premiums – The money you pay for health insurance
Exclusions – Things not covered under health insurancesuch as experimental products or treatments, or cosmetic products or services
Deductibles – The amount you’ll pay for covered healthcare expenses before your insurance plan starts to reimburse you. For instance, with a $100 deductible, you pay for the first $100 of expenses before your insurance kicks in.
Coinsurance – The percentage of the cost you pay for covered healthcare expenses
Dispense fees – A fee charged by a pharmacist to fill a prescription. Your insurance plan may only cover a certain amount for dispensing. Above that amount, you’ll have to pay.
Expenses over limits – Most healthcare plans have limits for certain categories. For instance, you may claim up to $500 for massage services. Above that amount, you’ll pay out-of-pocket.
Are out-of-pocket healthcare expenses tax deductible?
Some out-of pocket healthcare expenses may be deductible. Check with Canada Revenue AgencyOpens a new website in a new window - Opens in a new window for a list of eligible expenses and how to claim them on your tax return.
What’s next?
Now that you understand more about health insurance out-of-pocket expenses, you may want to:
Check what your provincial/territorial health insurance does and doesn’t cover
Check what your employer or personal health and dental insurance does and doesn’t cover
Talk with an advisor about your need for personal health insurance if you don’t have coverage
This information is general in nature, and is intended for informational purposes only. For specific situations you should consult the appropriate legal, accounting or tax advisor.
