Personal Finance

Buying private health insurance for family

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  • Feb 8th, 2018 1:38 pm
[OP]
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Jun 5, 2010
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Buying private health insurance for family

I'm currently changing jobs to a smaller company that does not offer health benefits.

My old employer had had health benefits, so I'm looking into getting something privately.

I've read a lot about comparing your actual costs vs what it would cost for a plan. Which I plan on doing a spreadsheet. But I'm curious how many people actually pay for health benefits separately. And what are the best choices in Canada (Ontario). I also went to University, so there seems to be options available through my University Alumni program.

Growing up, my mother always had health benefits from work. My dad was self employed, so used hers. When they split up, he just paid for things out of pocket.

I am also married, with two small children. So this is the main driver for my decision to look into benefits. My wife works part time, and her employed does not offer benefits.

Thanks.
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Sr. Member
Sep 23, 2013
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Windsor, Ontario
I'm not as much of a fan as I used to be for health and dental benefits, especially with free medications for children. Insurance companies have started capping what you can claim, so you will see 80% up to $3,000 per year for example. In the past when it was unlimited, it may have been worth it in the event of an illness with expensive medications; with claims caps, not so much, There's also the trillium benefits that will cover medications over 3% of your yearly income.

The main expenses you'll have will be your dental benefits, but again, those are capped yearly and often have a smaller co-payment on the private side. You might be better off starting a savings account for health and dental expenses.

I will say, one of the main perks of doing a H+D plan is the fact that you could claim it on your taxes. That being said, family premiums are high. I'm been really like Health Spending Accounts for the self-employed and business owners.

Edit: I would also highly recommend looking into disability insurance (if you're not provided it at your new place of employment) and a life insurance plan a you have young children and a wife only working part time.
Last edited by SteveDfsin on Feb 6th, 2018 10:25 am, edited 1 time in total.
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Your current insurance provider may have an option to convert to a personal H&D plan without questions. However from what I've seen the premiums are still quite high with lots of limitations. It's best you calculate what you spend now and see if it's worth it. Usually it's not.
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Doing it privately isn't worth it financially. You'd be better off setting up a separate savings account.
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Oct 27, 2012
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Shwa
I'm self employed and my wifes work doesnt have benefits. We pay everything out of pocket, for the dentist we go to the University student dentists to save the costs. They take a bit longer to do the job, but they are extra cautious and the cost is less than half.
Sr. Member
Sep 23, 2013
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jookid wrote: I'm self employed and my wifes work doesnt have benefits. We pay everything out of pocket, for the dentist we go to the University student dentists to save the costs. They take a bit longer to do the job, but they are extra cautious and the cost is less than half.
If your wife is self-employed, look into a health savings plan. Get money out of the business (tax-free) to pay for your medical expenses.
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Skilas wrote: I'm currently changing jobs to a smaller company that does not offer health benefits.

My old employer had had health benefits, so I'm looking into getting something privately.

I've read a lot about comparing your actual costs vs what it would cost for a plan. Which I plan on doing a spreadsheet. But I'm curious how many people actually pay for health benefits separately. And what are the best choices in Canada (Ontario). I also went to University, so there seems to be options available through my University Alumni program.

Growing up, my mother always had health benefits from work. My dad was self employed, so used hers. When they split up, he just paid for things out of pocket.

I am also married, with two small children. So this is the main driver for my decision to look into benefits. My wife works part time, and her employed does not offer benefits.

Thanks.
I guess one benefit of a plan is to have predictable payments you can budget for, and to avoid unexpected out of pocket costs that can end up on Visa etc. But since all private plan rates are calculated to make a healthy (no pun intended) profit on you, can you find a better way of doing this? What I mean is, create a bank account and arrange an automatic monthly deposit equal to the monthly premium cost of a private plan. As that accumulates, you can use it as a buffer against unexpected expenses. But if your family proves to be more healthy than the average, you could accumulate a nice nest egg.
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Jan 17, 2013
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Dealmaker1945 wrote: I guess one benefit of a plan is to have predictable payments you can budget for, and to avoid unexpected out of pocket costs that can end up on Visa etc. But since all private plan rates are calculated to make a healthy (no pun intended) profit on you, can you find a better way of doing this? What I mean is, create a bank account and arrange an automatic monthly deposit equal to the monthly premium cost of a private plan. As that accumulates, you can use it as a buffer against unexpected expenses. But if your family proves to be more healthy than the average, you could accumulate a nice nest egg.
@Skilas above is good advice for you. Open an account, put the money in that account for yourself instead of the insurance company.

You can never claim more than what you pay for premiums. Insurance companies does not operate at a loss. The limits and exclusions simply prevent you from claiming more than what you pay even if you wanted/needed to.

Health insurance is different from general insurance. The probability of a claim in general insurance is 0% (your insured home may never get burned down, etc) while the probability of a claim in health insurance is 100% (you will always visit the dentist and doctor). The premiums, limits and exclusions for health insurance are designed to ensure the premiums you pay is always more than your claims.

So you are not really "insuring" for health, you are paying the insurance company in advance for paying your health bills on your behalf and extra money for that service. As such, health insurance should not be called insurance because it is not insurance. Just like credit unions at one point was asked to stop using words like "bank" or "banking", insurance companies should stop using the word "insurance" for payment services (health insurance) because it is not insurance and it is misleading to the public.
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Oct 23, 2017
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stack21 wrote:
The premiums, limits and exclusions for health insurance are designed to ensure the premiums you pay is always more than your claims.
I reviewed my plan last week using the last 2 years' transactions (retiree benefit plan with a small, declining subsidy from the employer) and sure enough, the costs and benefits are almost a wash. The insurance companies really know how to calibrate these plans.

I keep our plan only because it provides a week's travel insurance with very generous provisions for existing conditions. That is worth about $325 per trip to us right now, and maybe more in the future. It also lets us do day frequent trips to the US without the hassle of qualifying for coverage every time we go.
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Jan 17, 2013
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Dealmaker1945 wrote: I reviewed my plan last week using the last 2 years' transactions (retiree benefit plan with a small, declining subsidy from the employer) and sure enough, the costs and benefits are almost a wash. The insurance companies really know how to calibrate these plans.

I keep our plan only because it provides a week's travel insurance with very generous provisions for existing conditions. That is worth about $325 per trip to us right now, and maybe more in the future. It also lets us do day frequent trips to the US without the hassle of qualifying for coverage every time we go.
The travel insurance add-on provided by your "health insurance" plan is nice to have. Such add-ons are usually provided by the employer's health.

Travel insurance is like general insurance. You may or may not claim from the travel insurance. So what you claim from travel insurance may be more than what you pay for the premiums. As opposed to that, for "health insurance", what you claim from "health insurance" is always less than what you pay for the premiums. This is because the insurance company cannot operate at a loss.


$106 - cost for travel insurance for a 5-day trip to USA
If you make a claim, you are well compensated for a $106 investment
If you do not make a claim, the insurance company makes a $106 profit
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[OP]
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Thanks all for the advice.

One of the big reasons I was looking into health insurance was because of the amount of dental work my wife had this year. I'm going to estimate around $3k. Which involved cleanings, fillings, root canal, and a crown. Her benefits paid for almost all of it. So we really lucked out with that. And I had about another $500 in maintenance myself. So we really saved a lot. I don't have all the details with me, but I'm hoping that's it for a while. Because I agree that based on typical usage, we should be under. But this past year we were well over...
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Nov 13, 2013
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Skilas wrote: Thanks all for the advice.

One of the big reasons I was looking into health insurance was because of the amount of dental work my wife had this year. I'm going to estimate around $3k. Which involved cleanings, fillings, root canal, and a crown. Her benefits paid for almost all of it. So we really lucked out with that. And I had about another $500 in maintenance myself. So we really saved a lot. I don't have all the details with me, but I'm hoping that's it for a while. Because I agree that based on typical usage, we should be under. But this past year we were well over...
Yeah but there are limits specifically because they know those that need more work are the ones that buy insurance. It really only works on a group basis.
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Jan 16, 2016
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stack21 wrote: You can never claim more than what you pay for premiums. Insurance companies does not operate at a loss. The limits and exclusions simply prevent you from claiming more than what you pay even if you wanted/needed to.
Sorry but this is a stupid thing to say. For health benefits like drugs and dental, sure, you won’t receive more from the insurance company than the limit, but the point of insurance is to help make you whole after an accident. What if you smash your face on the ground while slipping on ice? Or if you need paramedical services like physio or massage because you injured your back with heavy lifting? Or better yet, you need emergency medical attention in a foreign country.

You don’t buy medical insurance for the fact that you can claim recurring drug and dental cleaning costs, you buy it for the unexpected accidents that can happen in your life.
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Sep 23, 2013
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Windsor, Ontario
Skilas wrote: Thanks all for the advice.

One of the big reasons I was looking into health insurance was because of the amount of dental work my wife had this year. I'm going to estimate around $3k. Which involved cleanings, fillings, root canal, and a crown. Her benefits paid for almost all of it. So we really lucked out with that. And I had about another $500 in maintenance myself. So we really saved a lot. I don't have all the details with me, but I'm hoping that's it for a while. Because I agree that based on typical usage, we should be under. But this past year we were well over...
That's a good point, just remember though there is a cap on what you can claim on dental (usually $700-$1000 per year per person). Not only is there a cap, but there is a difference in cost when you go to a dentist with and without coverage. If a dentist sees you have no insurance they'll charge quite a bit less than they would for someone who was covered under a plan. It's pretty sketchy in my opinion and also one of the reasons H&D plans have so many caps and higher premiums.
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Skilas wrote: Thanks all for the advice.

One of the big reasons I was looking into health insurance was because of the amount of dental work my wife had this year. I'm going to estimate around $3k. Which involved cleanings, fillings, root canal, and a crown. Her benefits paid for almost all of it. So we really lucked out with that. And I had about another $500 in maintenance myself. So we really saved a lot. I don't have all the details with me, but I'm hoping that's it for a while. Because I agree that based on typical usage, we should be under. But this past year we were well over...
Private dental plans are expensive. I doubt you would come out ahead even for a year like you just had.
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stack21 wrote: You can never claim more than what you pay for premiums. Insurance companies does not operate at a loss. The limits and exclusions simply prevent you from claiming more than what you pay even if you wanted/needed to.
The general sentiment is right, but obviously what you have actually written is not correct. Certainly you can receive benefits of greater value than the amount you have paid in premiums if luck happens to run that way.

In the long run, insurance companies are not charities. They operate for profit. They make that profit by estimating with experts what the average claims are likely to be for a client in your category, and then they charge you double that amount in order to hedge their bets and earn a nice profit.

If you are part of a large insurance pool, like a large company with many young single employees who won't be claiming much, then you might actually come out ahead of the game. The insurance company is fine with that, as long as they make a profit on the pool overall.

So when you seek private family insurance, and you're concerned about routine costs like dental work, what makes you think that the insurance company is going to generously pay out more money than they collect?

The only way for you to actually benefit from insurance coverage on average is if you can get into a pool that's a much lower risk on average than you, by at least 2:1. The insurance company will want to prevent that of course, so you need to slide under their radar. Good luck!
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SteveDfsin wrote: That's a good point, just remember though there is a cap on what you can claim on dental (usually $700-$1000 per year per person). Not only is there a cap, but there is a difference in cost when you go to a dentist with and without coverage. If a dentist sees you have no insurance they'll charge quite a bit less than they would for someone who was covered under a plan. It's pretty sketchy in my opinion and also one of the reasons H&D plans have so many caps and higher premiums.
This is very true. I had a tooth repair done 18 years ago (did a faceplant while jogging home from work). Bottom half of top front tooth broken off. The dentist was willing to fix it for me for only $100 since I had no coverage. That repair is still in perfect shape.
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Jan 17, 2013
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Exp315 wrote: The general sentiment is right, but obviously what you have actually written is not correct. Certainly you can receive benefits of greater value than the amount you have paid in premiums if luck happens to run that way.

In the long run, insurance companies are not charities. They operate for profit. They make that profit by estimating with experts what the average claims are likely to be for a client in your category, and then they charge you double that amount in order to hedge their bets and earn a nice profit.

If you are part of a large insurance pool, like a large company with many young single employees who won't be claiming much, then you might actually come out ahead of the game. The insurance company is fine with that, as long as they make a profit on the pool overall.

So when you seek private family insurance, and you're concerned about routine costs like dental work, what makes you think that the insurance company is going to generously pay out more money than they collect?

The only way for you to actually benefit from insurance coverage on average is if you can get into a pool that's a much lower risk on average than you, by at least 2:1. The insurance company will want to prevent that of course, so you need to slide under their radar. Good luck!
You may be confused with the subject being discussed - that statement referred only to "health insurance". For general insurance such as home insurance, personal accident insurance, travel insurance, etc., those are fine as you said "you can receive benefits of greater value than the amount you have paid in premiums if luck happens to run that way".

When one seeks to buy "health insurance" for dental or drugs coverage, it is much better to open a bank and deposit an amount equal to the monthly premium cost of a "health insurance" plan as you can never claim more than what you pay for premiums, the limits and exclusions simply prevent you from claiming more than what you pay for premiums.
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Chickinvic wrote: This is very true. I had a tooth repair done 18 years ago (did a faceplant while jogging home from work). Bottom half of top front tooth broken off. The dentist was willing to fix it for me for only $100 since I had no coverage. That repair is still in perfect shape.
That tooth repair was due to an accident. Provincial health plan will cover dental restorations due to an accident. If you have sought dental restoration treatment in conjunction with the faceplant injury, you may have been covered under the provincial health plan.
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stack21 wrote: That tooth repair was due to an accident. Provincial health plan will cover dental restorations due to an accident. If you have sought dental restoration treatment in conjunction with the faceplant injury, you may have been covered under the provincial health plan.
Nope, it was cosmetic repair. I guess I could have lived with a jaggedy tooth, but I didn't want to. There was no coverage for anything like that.

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