How to choose a health and dental plan in Canada: a step-by-step checklist with numbers

To choose a health and dental plan in Canada, work in this order: find out what public programs already cover you, check whether anyone in your household has access to a group plan, add up a normal year of uncovered costs, decide which large costs you could not absorb, then compare plans on premium plus your expected share of the bills, not premium alone. Read the drug formulary rules, annual maximums, waiting periods and pre-existing condition clause before you sign, and never cancel your current coverage until the new plan has accepted you in writing. This checklist walks through each step with numbers.

This is the overview for the worked costs and plan checklists section. Tick items off in the interactive plan choice checklist. Figures are illustrative.

Step 1: map your public coverage

Before looking at any private plan, list for each person in the household:

• What the provincial health plan covers at their age (eye exams, physiotherapy or dental programs for children and seniors).
• Which provincial drug program they could use; see provincial drug programs compared.
• Whether they qualify for the Canadian Dental Care Plan.
• Whether a pharmacare program for contraception or diabetes medication applies in your province.

In Quebec, also check whether anyone is required to join a private group drug plan.

Step 2: check group access

Ask your employer, your spouse's employer, your union, professional order or association. A group plan with an employer contribution is nearly always the cheapest coverage per dollar of benefit. If you and your spouse both have plans, read coordination of benefits before deciding to keep or drop one.

Step 3: add up a normal year

Pull last year's receipts, pharmacy printouts and dental statements. Use the out-of-pocket estimate for anything you expect to change.

Step 4: name the costs you could not absorb

A plan's main value is protection against the bad year: a new specialty medication, a root canal and crown, a course of physiotherapy after surgery. Ask: what would happen if one of these hit next year? A plan with a $750 drug maximum gives little protection against a $12,000-a-year medication; one with no drug maximum gives a lot.

Step 5: compare total cost

For each plan, calculate:

Total cost = yearly premium + (expenses - amount the plan pays)

Using the household above and two illustrative individual plans:

• Plan A: premium $165 a month ($1,980 a year). Pays 80% of drugs, 80% of dental to $750 per person, glasses $200, 80% paramedical to $400 per practitioner type.
• Drugs $480; dental 80% x $1,200 = $960 (within two $750 caps); glasses $200; physio and massage at most $400 each, so 80% x $700 = $560 split as, say, $320 physio + $240 massage. Plan pays $2,200. Total cost = $1,980 + ($2,950 - $2,200) = $2,730.
• Plan B: premium $105 a month ($1,260 a year). Pays 70% of drugs to $500, 60% of basic dental to $500 per person, no vision, no paramedical.
• Drugs $420; dental 60% x $1,200 = $720. Plan pays $1,140. Total cost = $1,260 + $1,810 = $3,070.
• No plan: $2,950, before the tax credit.

In an average year, Plan A costs $220 less than paying yourself, and Plan B costs more than going without. In a bad year, Plan A's protection is also stronger. Run your own plans in the plan comparison tool; is individual health insurance worth it explores the break-even point in more detail.

Step 6: read the clauses that change the answer

• Coinsurance, deductibles and maximums, per person and per family; see coinsurance, deductibles and maximums explained.
• Drug rules: formulary, generic substitution, prior authorization, pay-direct card or reimbursement.
• Dental: waiting period for major work, recall frequency (every 6 or 9 months), fee guide year, whether orthodontics is included.
• Pre-existing condition clause and any health questionnaire.
• Renewal: whether the premium is guaranteed, and the age bands.
• Termination: what happens if you miss a payment.

Step 7: switch safely

1. Apply for the new plan and wait for written acceptance, including any exclusions.
2. Line up the start date so there is no gap.
3. Only then cancel the old plan, in writing.
4. Keep receipts and premium statements for the medical expense tax credit.

Special situations

• Leaving a job or retiring: see losing group benefits; conversion deadlines are short.
• Self-employed: premiums may be a business expense; see self-employed health and dental plans.
• Dental only: compare a dental plan with paying the dentist yourself in dental insurance vs paying yourself.

Frequently asked questions

Should I always choose the plan with the lowest total cost in an average year?

Not always. A plan that costs slightly more in an average year but has much higher drug or dental maximums may be the better choice if a large bill would strain your budget.

How far back should I look at expenses?

At least one full year, and two if your costs vary. Adjust for known changes, such as a child starting orthodontics or a new long-term prescription.

Can I change plans every year?

Individual plans can usually be cancelled and replaced, but a new underwritten plan may exclude conditions that developed since you first bought coverage. Changing is not risk-free.

Sources

• Canadian Life and Health Insurance Association — consumer guides to health insurance
• Canada Revenue Agency — medical expense tax credit
• Canadian Dental Care Plan on Canada.ca — federal dental eligibility
• Régie de l'assurance maladie du Québec — Quebec drug insurance obligation
• OmbudService for Life and Health Insurance — complaints about insurers