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Insuring your health

November 05, 2013

What’s in your healthcare wallet?

When meningitis struck my four-year old daughter Quinn, money was the last thing I thought about. This is Canada, after all, and health care is free.

Yes and no.

Twenty-two years ago every aspect of Quinn’s hospital care was, indeed, covered as she struggled back from the edge of death. But my husband, David and I were not prepared for the financial impact of the aftermath.

Back then, like 81% of Canadians today (according to the recent Sun Life Canadian Health Index), we didn’t have any money set aside specifically for health expenses. And, like 73% of Canadians in 2013, we had no personal health insurance.

Quinn lost her hearing and her ability to speak as a result of the meningitis. While hearing aids were covered, speech therapy, batteries, sign language lessons and a hockey helmet were not. Afflicted with a common side effect of meningitis called ataxia, or loss of balance, she staggered and fell like a drunk. The helmet was needed to protect her head. I fretted about the cost, because David and I had cut our work hours to take care of Quinn and her older sister, Claudia.

Twelve years later another health event arose – this time, a good one. Quinn received a cochlear implant, which gave her some hearing back. However, by then in our late forties, David and I had become part of the sandwich generation with retirement and kids’ education to save for plus parents who needed help.

We had learned from Quinn’s illness and did have some money earmarked for emergencies, plus life insurance and a group health plan. However, $125 an hour for audio-verbal therapy to teach Quinn how to use her new device wasn’t covered. Nor were many other expenses, such as $300 for annual insurance on the cochlear implant.

Suffice it to say that we became very familiar with financial stress as a result of these two major health events. The Sun Life Canadian Health Index indicates our experience is shared. Financial hardship afflicts 40% of Canadians who have gone through a health emergency.

In light of that significant number, you’d think we’d take a leaf out of the Girl Guides’ book and Be Prepared. But when it comes to health, we are not. The reasons are two-fold.

First of all, health expenses are simply not on the Canadian radar. Most of us complacently believe that provincial healthcare plans will provide, but we don’t realize how many drugs, devices and various therapies are not covered.

Second, while 62% of Canadians (according to the health index) have group health insurance, few of us understand the details. Fifty-year-old Denise Kunz says that she has an excellent workplace health plan. However, after injuring herself horseback riding, she was surprised to discover that semi-private hospital rooms were no longer covered.

Kunz was also taken aback when the insurance company denied a claim for crutches after her son broke his leg. “They said he already had a pair from breaking his ankle five years ago, but he was a kid back then and now he is man-sized.” As well, when Kunz carefully read the policy she realized it would cover 80% of her son’s $1,600 leg brace, but only once in a lifetime — and the boy is still growing.

Though many of the Sun Life statistics are grim, there are a number of ways to avoid the financial stress associated with an accident or other health emergency:

  1. Keep all medical expense receipts so you can claim the Medical Expense Tax Credit on your income tax return. Also, you can use the annual amount you claim as a general guide to help calculate how much you should plan to save each year to cover the costs.
  2. Max out your TFSA (Tax Free Savings Account) contributions. This will add about $5,500 (2013 limit) annually to the “what-if” kitty.
  3. Once a year, check for changes to your workplace or personal health plans and, while you’re at it, familiarize yourself with what is not covered.
  4. If provincial, personal or group plans do not cover a prescribed drug, talk to your doctor. Each type of coverage may have options such as substitutions or an exception review process.
  5. Check your annual and lifetime maximums and if you’re reaching or surpassing these milestones, ramp up your savings proportionately.

Health events can be especially stressful because of the emotional toll they can have on the entire family. But having a good financial plan can help you be prepared for the unexpected.

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