This article provides information to Canadians about understanding
health insurance rates.
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
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 =
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
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 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
- 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
- Profession – Individuals involved in hazardous professions
will be quoted higher rates because they are at high risk of injury
- Location – Some cities and locations are rated healthier than
others, which makes health insurance rates for certain locations lower
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.