Deductible
A deductible is the fixed dollar amount you must pay each benefit year before your plan starts reimbursing eligible expenses. Think of it as your yearly participation in costs - once met, your plan covers claims according to its coinsurance. Some individual health plans in Canada have no annual deductible, while others apply one only to certain benefits (often $25–$100 per person).
How It Works
A deductible is the set amount you must pay before the insurer begins making benefit payments, often referred to as satisfying the deductible. It can apply to the entire plan, across certain benefits, or a combination of both, and some individual Canadian health plans carry none at all. Once the deductible is met, the plan covers claims according to its coinsurance, which is the percentage of the cost for health and dental services you pay after meeting your deductible. Deductibles reset each plan year and apply separately per person or family, depending on the policy wording. They also help insurers keep premiums lower by discouraging small or unnecessary claims.
Example:
Suppose your Canadian extended health plan carries a small annual per-person deductible and reimburses eligible expenses at coinsurance afterward. In January you visit a registered massage therapist. Because it is your first claim of the year, your deductible is subtracted from the eligible amount first, and the plan then reimburses its coinsurance share of what remains while you cover the rest plus the deductible. Later that year a prescription claim has no deductible taken because you have already satisfied it, so only the coinsurance rule applies.
What to Watch For:
Read the policy wording closely, because a deductible applies separately per person or family, and family deductibles may cap at two to three times the single amount. It is also worth knowing that deductibles and co-pays are different: a deductible is an annual threshold you meet each plan year, while a co-pay is charged per transaction. Finally, choosing a higher deductible usually lowers your premium because you are retaining more of the smaller or moderate losses yourself.
