Losing Health Benefits: An In-Depth Look at the Numbers

Losing Health Benefits - By the Numbers

For the past few years, I have been in the fortunate position that (for the most part) the financial concerns surrounding my healthcare have faded into the background. This is due in large part to the health coverage we have been lucky enough to have through my husband's employer. It looks like this is soon to disappear though, leaving us in a tenuous position of potentially escalating costs we can't cover. As people who like predictability and being able to plan ahead, this straight out sucks.

So, for my edification and hopefully for other's interest, let's take a closer look at what's actually going on, the Canadian system, and what it means to your wallet to be chronically ill here in one of the most progressive countries in the world.

Government-Covered Care

So we're straight off the bat very lucky. We live in Canada, and so have government-covered healthcare that includes urgent care, family doctors, specialists, hospital stays, necessary tests, and basically anything you would think of as "life-saving" healthcare. We simply do not have to pay for these services. (Well, we pay through taxes, but that seems like a pretty good trade off).

The government system does however has its own blind spots which aren't covered, including:

• Ambulances - yes, you read that right. I can't tell you how shocked we were the first time I needed an ambulance here and we received a bill afterwards. Only $45, but still.
• Prescriptions (unless you're under 24)
• Most mental health care (there are government-sponsored programs, but they usually have a years-long waiting list)
• Dental care (unless it's a surgical problem)
• Vision care (unless you're a child or an OAP)
• Home health care
• Long term care
• Devices and mobility aids
• Paramedical services, including physiotherapists, chiropractors, social workers, counsellors, osteopaths, podiatrists and so on.

So you probably won't die from a lack of care, and you certainly won't be made bankrupt (as in the U.S.) through a serious accident or illness, but for long term ongoing care a lot of the financial burden is still on patients' shoulders.

Living with Just Government Care

After we first moved to Canada, we did not have the benefit of extra health care coverage. We, like many many people, relied solely on the government provided services. Because of my long term health problems, this left us in a bad way. My health costs (in particular prescriptions) cost around 27% of our monthly household income. This was more than we spent on food.

We found a loophole though: because we technically counted as a low-income family (according to the government of Canada definitions), we were eligible for a government-assistance program called the Trillium Drug Plan. This plan calculates a threshold based on your income, and then sets a deductible you must pay each quarter, after which all prescription costs are covered. This was of huge help to us once we applied and were accepted - it reduced our monthly prescription costs to just $175 a month, or 7% of income. We were only eligible for this level of assistance because of our otherwise terrible financial situation.

Getting Extended Healthcare Coverage

And then a wonderful thing happened: my husband got a job that offered employee benefits, including extended health care coverage for spouses. This was transformative for us. We went from spending $175 a month on prescriptions, and not being able to afford anything else (including dental and vision care, as well as physical therapists), to:

• Unlimited prescriptions, with each prescription costing just $1.99 to fill.
• 90% of all dental costs covered
• $400 every 2 years for vision care
• $750 allowance per calendar year for other paramedical services, including physical therapists, massage therapists, chiropractors, social workers, psychologists, osteopaths, nutritionists, and much more.

Suddenly we were in a position where our monthly budget for meds went to basically zero, and I was able to start seeing physios and others to help improve my overall health. Magic. Literally, this was a game changer, but it only happened in tandem with a move to a much higher-paying job. Our outlay essentially was $0, and 0% of our monthly household income.

So there's the rub: if you're low-income, you can't afford any of these extras and they're not covered, but if you're high-income you are more able to afford them but you don't need to cos they're already covered for you by your employer. 

As ever, it sucks to be poor.

Losing Extended Coverage

All of which brings us to the next point: losing extended coverage. Which we expect to happen for us in the next month. Now this puts us in a new and weird situation, because we're no longer low-income, so won't qualify for much government assistance, so we won't get any help with normal monthly costs like prescriptions. So what exactly does that look like?

I did the math (cos, you know, maths is awesome), and these are the specifics:

• In the first 5 months of this year, our extended coverage absorbed $1713.56 of prescription costs, an average of $342.71 a month.
• Also in the first 5 months of this year, our extended coverage paid for $1446.19 of other healthcare related costs (including vision care, physio and orthotics). This is an average of $289.24 a month.

So the monthly average we didn't have to worry about was $631.95. Again, that is comparable to what we spend on groceries for the month.

Now we are losing this coverage, what happens? We no longer really qualify for prescription help from the government, and all of the extras like dental, vision and paramedical services disappear completely. We're looking at having to find an extra $631 a month just to keep things normal. That may sound like a lot, or not very much at all, depending on your income level, but as we're now sort of middle income it falls exactly in the wrong spot for affordability and support.

Other Options

Now a lot of people do pay for their own extended healthcare coverage. That, however, is not a realistic option for the chronically ill, and here's why:

• The most basic plan that does not require you to answer a health questionnaire costs roughly $140 a month. This increases up to $350 a month for better plans with more coverage.
• All of these plans come with caps that differ from those offered with group employee plans. So prescription costs are capped at $450-$2400 per year, depending on the level of the plan. So you can pay $140 a month for the most basic plan, and it'll only cover up to $450 of meds a year. So worth it, right?! For context, one of my prescriptions costs $732 per refill.
• It gets worse; the most basic (cheaper) plans don't include dental and have very low vision caps (typically $150 every 2 years, which barely covers an eye test). 
• Individual therapists and paramedical services have their own caps, but they limit what each visit can cost (thereby limiting who you can actually see) and limit the number of visits per year. The typical maximum is $650 combined per year, with a lifetime maximum thrown in for good measure.
• And the number of paramedical services covered is very limited - what's included and what isn't is fairly random. Speech therapists may be covered, for example, and physiotherapists not. For some reason.

So for our particular situation, we would need the best plan to get even close to covering our costs. Ignoring the issues of whether I would even qualify under this plan (after all, I do have pre-existing conditions), this means we would be paying:

• $4125.60 a year in premiums
• Plus $1712.52 in uncovered prescription costs
• Plus anything over $650 a year for other services (averages for us to about an additional $1500-$2000 a year).

So that's a cost of around $7338 (estimated) per year, or 11% of monthly income, for extended healthcare coverage. Compared to about $7583 in just paying for everything out of pocket. So by buying a plan, we save about $250 a year. 

For reference, the highest income earners that qualify for the government drug plan pay a deductible of $3989 a year for their prescriptions (based on a 2 person household, amounting to roughly 6% of monthly household income). And this doesn't cover anything but drugs.

So... What Now?

It's clear that even one of the most progressive countries in the world, lauded (especially in the U.S.) for its affordable and accessible care, still finds a way to screw over the chronically ill. The sweet spot that private plans and the government seem to be aiming for is healthcare costs amounting to around 10% of monthly income, but this is an unrealistic target for those needing expensive ongoing prescription or therapeutic care. In Canada, if you are long term sick but not dying, you better be either super rich or super poor. 

Look, of course we're not going to starve. We're not going to have to suddenly stop filling my prescriptions, because we're in the unbelievably fortunate position of having some savings, and the likelihood is that my husband will find another job with extended benefits. Not everyone has those options! And until he does find new work, this is our reality, and belt-tightening is now the name of the game. We must ensure the gains I have made in my health for the past few years, due in large part to the stability and access I've had in additional healthcare services, don't disappear with our coverage. 

We have been spoiled by our fortune for the past few years, and it lulled us into a false sense of optimism and stability. But the truth is: 

While any aspect of your healthcare depends on your income level or place of employment, you can never truly rely on it.