Types of Health Insurance: 6 types of Medical Insurance Plans in Canada

When choosing a health insurance plan, there are many options available to you.

You can choose one of the provincial or territorial health care insurance plans or through a private insurance broker. Some of the best life insurance companies offer may also come with one of these plans. While it isn’t a federal law, some provincial laws mandate that no medical life insurance in Canada can mean penalties. Especially for international students. It’s easy to get insured for anybody with all the options available.

There are many types of health insurance plans to choose from. Each plan contributes a fixed percentage towards the costs for the average participant. The deductibles can vary among plans. The cheapest plans often have the highest deductibles.

Every insurer might provide one or more of these prevalent plan types:

• Health maintenance organizations (HMOs)
• Preferred provider organizations (PPOs)
• Exclusive provider organizations (EPOs)
• Point-of-service (POS)
• Catastrophic Plan
• High-deductible health plans (HDHPs), associated with health savings accounts (HSAs)

Take a moment to understand the distinctions between these plans. You can learn about different plans to help you pick one that fits your budget and needs. These plans are usually offered by medical insurance companies. Even some of the best life insurance plan in Canada are policies that come with these health plans added to them.

For details about a health plan, look at its summary.

1. Health Maintenance Organization (HMO)

An HMO administers all health services via a network of healthcare providers. With an HMO, you may experience:

• The most restricted freedom to select your healthcare providers.
• The least paperwork compared to alternative plans.

You need a primary care doctor for your care. They will direct you to specialists when needed. This ensures that your health plan covers the care. Most HMOs need a referral before seeing a specialist.

You can visit any doctors within your HMO’s network. If you consult a doctor outside the network, you may have to cover the entire bill yourself. Hospitals that are not in your network should cover services at the rates of other hospitals. Yet, doctors who are not participating can bill you if they treat you in the hospital.

What You Pay:

Premium: This is the monthly cost of insurance.

Copays and/or co-insurance for each type of care. A copay is a fixed fee, like $15, paid when receiving care. Coinsurance is a percentage of the charges for care, e.g., 20%. These charges vary based on your plan and contribute to your deductible.

The Paperwork Involved:

There won’t be any claims forms to fill in.

2. Preferred Provider Organization (PPO)

With a PPO, you may have:

• You have more freedom to choose your life insurance and health care providers than with an HMO. You don’t need a referral from a primary care doctor to see a specialist.
• Higher costs to cover yourself for out-of-network doctors compared to in-network providers.
• Extra paperwork when consulting out-of-network providers.

You can see any doctor in the PPO’s network. You can also see out-of-network doctors, but it will cost more.

What You Pay:

Premium: The monthly cost of insurance.

Copay or coinsurance: A copay is a fixed fee, like $15, paid when receiving care. Coinsurance involves a percentage payment for care charges, such as 20%.

Other costs: If your doctor is not in your insurance network that can be a problem. Especially if their fees are higher than the local average. You may then have to pay the difference after your insurance pays.

The Paperwork Involved:

PPOs generally need minimal paperwork for in-network doctors. If you go to a provider who is not in your network, you must pay the bill and then ask your PPO plan for money back.

3. Exclusive Provider Organization (EPO)

With an EPO, you may have:

• Lower premiums compared to a PPO provided by the same insurer.
• You have some freedom to choose your healthcare providers.

This is better than with an HMO. The patient doesn’t need a referral from another doctor to see a specialist.  Yet, your plan doesn’t cover out-of-network providers. If you go to a provider who is not in your plan’s network for a non-emergency, you will have to pay the entire cost yourself.

You can see any doctor in the EPO’s network. There is no coverage for doctors outside the network.

What You Pay:

Premium: The monthly cost you pay for insurance.

Copay and Coinsurance: When receiving care, you pay a copay, like a $15 flat fee. Coinsurance involves a percentage payment for care charges, for instance, 20%.

Other costs: Seeing an out-of-network provider requires full bill payment.

The Paperwork Involved:

There’s minimal to no paperwork with an EPO.

4. Point-of-Service Plan (POS)

A POS plan combines the characteristics of an HMO and a PPO. With a POS plan, you may experience:

• More freedom in selecting healthcare providers compared to an HMO.
• A moderate level of paperwork if seeking care from out-of-network providers.

Your primary care doctor handles coordinating your care and referring you to specialists. You can see doctors who are in-network and referred by your primary care doctor. Out-of-network doctors are an option but at a higher cost.

What You Pay:

Premium: This is the monthly cost of your insurance.

Copays or coinsurance: When you receive care, you will usually pay a Copay of $15. Or coinsurance, which is a percentage of the charges for care. Higher copayments and coinsurance are applicable when using an out-of-network doctor.

The Paperwork Involved:

If you opt for services out of network, you must settle your medical bill. Then submit a claim to your POS plan for reimbursement.

5. Catastrophic Plan

If you are under 30, you can opt for a catastrophic health plan. Rather than having no medical/life insurance in Canada, it’s appropriate to at least have a catastrophic plan. This plan offers:

• Lower premiums
• Three primary care visits before the deductible applies.
• Complimentary preventive care, even before meeting deductibles.

You can see all the doctors on the network. Some plans may have additional rules for specialists.

What You Pay:

Premium: This is the monthly cost of insurance.

The Paperwork Involved:

It’s essential to keep records of your medical expenses. These records help prove that you’ve met the deductible.

6. High-Deductible Health Plan With or Without a Health Savings Account

You can lower your insurance costs with a high-deductible health plan (HDHP). It works like a catastrophic plan. With an HDHP, you may experience:

• One of these health plan types: HMO, PPO, EPO, or POS.
• You pay more money with this plan than with other plans. If you spend the most money allowed, the plan pays for all your care.  
• You can use a health savings account (HSA) to pay for your care. You do not have to pay taxes on money you put into an HSA. You can use it without paying taxes for qualifying medical expenses. To have an HSA, you must enroll in a high-deductible health plan (HDHP).
• Qualification of many bronze plans as HDHPs based on the deductible (see below).

What doctors you can see depends on the chosen plan— POS, HMO, PPO, or EPO.

What You Pay:

Premium: An HDHP plan features a lower premium comparatively.

Copays or coinsurance: You must pay for all medical costs up to your deductible. Except for preventive care. You can use funds from your HSA to cover these costs.

You can establish a Health Savings Account to assist with your expenses. The highest contribution to an HSA is $3,650 for individuals and $7,300 for families. If you are 55 or older, you can contribute an extra $1,000.

The Paperwork Involved:

Keep all your receipts for HSA withdrawals and track when you’ve met your deductible.