Factors That Influence the Cost of Health Insurance

Although the government provides Canadian residents with health insurance, most provincial plans cover only a handful of basic services, leaving individuals with gaps in their coverage.  As a result many people purchase individual health insurance to bridge the gaps.  Individual health insurance in Canada typically pays a percentage of the costs associated with covered services.  But rates for health insurance vary greatly based on a number of factors. Those factors generally fall into one of two categories - the risk you pose to the insurance provider and the type of plan you choose.  Below you will find additional information about the factors that could impact the cost of your health insurance plan.


Medical History

Some health insurance plans offer guaranteed acceptance, which means anyone who applies will be covered under the plan.  However, other plans require applicants to complete a health questionnaire and/or get a medical exam before determining whether or not someone is eligible for coverage.  In these cases, your medical history could influence the cost of your health insurance plan.  If you have a history of certain medical conditions you may be required to pay a higher premium than someone without a history of those conditions.  Your pre-existing condition may not be covered, and in some cases, you may not qualify for coverage at all.


Location

The role that your location plays in the cost of your health insurance plan is twofold.  First, the cost of medical services varies from province to province.  If you live in a place where costs are higher than average, your premium will likely be higher, and if you live in a place where costs are lower than average, your premium will be lower.  In addition, certain areas are known to have healthier populations than others.  If you live in an area where residents are healthy, there is a good chance your premium may be lower, whereas if you live in an area where residents are considered to be unhealthy, your premium may be higher.


Level of Coverage

While all health and dental insurance plans pay for a portion of the cost associated with covered services, the services that are covered, such as specialist visits, prescriptions, vision care and dental care, and the amount the provider pays vary greatly from plan to plan.  Plans that offer broader coverage have higher premiums than plans that cover fewer services.


Deductible

Many health insurance plans have deductibles, which is the amount you must pay for covered services before the health insurance plan will begin to pay for treatment.  Plans with higher deductibles usually have lower premiums, while plans with lower deductibles have higher premiums.


Co-Payments

A co-payment is the amount you are required to pay for treatment after you have met your deductible.  Health insurance plans with higher co-payments tend to have lower premiums, while those with low co-payments have higher premiums.