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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

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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.

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.

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