Healthcare Costs in Canadian Retirement: What You Need to Budget For#

Healthcare is the most underestimated expense in Canadian retirement planning. Many Canadians assume provincial health insurance covers everything — it doesn't. The gap between what provincial plans cover and what retirees actually spend on health care can easily be $5,000–$15,000+ per year per person, and those costs rise substantially in the final decade of life.

If you're building a retirement plan, healthcare costs deserve their own budget line — and their own savings strategy.

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What Provincial Health Insurance Covers (and Doesn't)#

Provincial health insurance (OHIP in Ontario, MSP in BC, AHCIP in Alberta, etc.) covers most medically necessary services including:

✅ Generally covered:

• Doctor visits (GP and specialist referrals)
• Hospital stays and most surgeries
• Diagnostic tests (bloodwork, X-rays, MRI in many cases)
• Emergency services

❌ Generally NOT covered:

• Dental care (routine or major)
• Prescription drugs (except under specific drug programs)
• Vision care (glasses, contact lenses)
• Physiotherapy, chiropractic, massage therapy
• Hearing aids
• Most ambulance services
• Private or semi-private hospital rooms
• Long-term care facility costs above the copay (in some provinces)
• Many psychological and mental health services
• Cosmetic procedures

This is a long list of uncovered services. And in retirement, when dental work becomes more complex, hearing aids become necessary, and prescription medications multiply — these costs add up quickly.

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How Employer Benefits Change at Retirement#

If you're covered by an employer group benefits plan while working, one of the biggest financial shocks of retirement is losing that coverage.

Group plans typically provide:

• Extended health coverage (drugs, paramedical, vision, ambulance)
• Dental coverage (basic, major, sometimes orthodontic)
• Life and disability insurance

When you retire, these end immediately — unless:

• Your employer offers a retiree group benefits plan (increasingly rare, mostly public sector)
• Your union or professional association has a retiree plan
• You convert your group coverage to individual coverage (usually within 60–90 days of leaving, with limited underwriting)

The conversion window is critical. If you don't convert within the allowed time, you may need to apply for individual coverage, which is underwritten — meaning pre-existing conditions may be excluded.

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Average Healthcare Out-of-Pocket Costs by Category#

Dental#

Dental care is the largest out-of-pocket healthcare expense for most retirees. In retirement, years of wear and reduced bone density increase the need for:

• Crowns ($1,200–$2,000+ each)
• Bridges ($2,000–$5,000)
• Root canals ($1,000–$2,000)
• Implants ($3,000–$6,000+ per tooth)
• Dentures and partials ($1,500–$5,000)

Without insurance, routine dental (cleaning, X-rays, basic fillings) runs $800–$1,500/year, and major dental work can add $2,000–$8,000+ in a single year.

Note: The federal Canadian Dental Care Plan now covers some Canadians 65+ with income below $90,000 (2026). Check eligibility based on your adjusted family net income.

Prescription Drugs#

Drug costs rise sharply with age. The average Canadian 65+ takes 4–7 prescription medications. Provincial drug programs provide some relief, but gaps remain:

• Ontario (ODB): covers most seniors 65+ for listed drugs with a $6.11 dispensing fee per prescription
• BC (Fair PharmaCare): income-tested; lower incomes pay less
• Alberta: no universal senior drug benefit; private insurance or out-of-pocket
• Federal CADTH coverage: slowly expanding the national drug formulary

For drugs not on provincial formularies, or for provinces without universal senior drug coverage, costs can be $1,000–$5,000+/year depending on medications.

Vision#

Eye exams, glasses, and contact lenses are covered by some provincial plans for seniors in some circumstances (e.g., Alberta covers annual eye exams for 65+). Ontario removed provincial OHIP coverage for routine eye exams for most adults aged 20–64, but seniors 65+ receive one annual exam.

Glasses frames and lenses cost $300–$1,000+ per pair. With prescription changes every 1–2 years and the likelihood of progressive lenses with age, expect $300–$600/year in vision costs.

Hearing Aids#

Hearing loss affects about 50% of Canadians over 70 and 80% over 80. Modern hearing aids cost $2,000–$8,000+ per pair, and typically need replacement every 5–7 years. Provincial coverage varies:

• Ontario AAHB: provides assistance up to $500 per aid every 5 years
• Alberta: some subsidy through the Assistive Devices Program
• BC: limited subsidy through certain programs

Out-of-pocket hearing aid costs over a 20-year retirement: potentially $8,000–$30,000+.

Physiotherapy and Paramedical Services#

Without coverage, physiotherapy runs $80–$150/session. Massage therapy, chiropractic, and other paramedical services are similar. If you use these services even monthly, that's $1,000–$2,000+/year.

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Private Health Insurance Options for Retirees#

Individual Health and Dental Plans#

Available from insurers including Sun Life, Manulife, Blue Cross, Canada Life, and others. Plans vary widely:

Premiums increase with age. A comprehensive plan at 65 might cost $300/month ($3,600/year) per person, rising to $500+/month by age 75+. Couples can spend $7,000–$15,000+/year on private insurance alone.

Considerations When Choosing Private Coverage#

• Pre-existing condition exclusions: insurers may exclude conditions diagnosed before coverage starts
• Drug formularies: not all drugs are covered; check if your medications are on the formulary
• Benefit maximums: annual maximums on dental, physiotherapy, and other benefits may be low
• Waiting periods: some plans have waiting periods for major dental work
• Right-sizing: high premiums for comprehensive coverage may not be worth it if you're healthy; lower premiums with higher deductibles may save money in aggregate

Association and Alumni Plans#

Many professional associations and alumni networks offer group extended health plans to members. These often have no medical underwriting and can be less expensive than individual plans. Check:

• Your professional association
• Your university or college alumni association
• Your union's retiree plan
• Industry associations relevant to your career

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Long-Term Care: The Biggest Risk#

Long-term care (LTC) is the catastrophic healthcare cost in retirement. Nursing home, retirement residence, or in-home care for prolonged periods can cost $40,000–$150,000+ per year.

Types of Care and Costs (2026 Estimates)#

Wait lists for government-subsidized long-term care in Ontario and BC can be several years. Many people end up in private facilities while waiting — at full private rates.

Average LTC duration: 2.5–3 years for men, 3–4 years for women, but many people require 5–10+ years of care.

Long-Term Care Insurance#

LTC insurance pays a daily or monthly benefit if you can't perform activities of daily living (ADLs) or have severe cognitive impairment. Key considerations:

• Buy early: premiums are much lower in your 50s than your 60s–70s, and health underwriting may exclude you if you wait too long
• Benefit period: choose 3–5 years minimum; infinite benefit options exist but are expensive
• Inflation protection: benefits should increase with inflation; care costs will be much higher in 20–30 years
• Elimination period: how long before benefits begin (30, 60, 90 days); longer elimination = lower premium

LTC insurance premiums in Canada: $150–$400/month for a 55-year-old, depending on coverage.

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Tax Credits for Healthcare Costs#

Don't overlook the tax benefits:

Keep all medical receipts. In heavy medical expense years, the METC can generate meaningful tax relief.

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Healthcare Budget Planning: A Framework#

Here is a planning framework for annual healthcare costs by retirement stage:

These are rough estimates for a single person including insurance premiums, out-of-pocket dental, drugs, and vision. Couples roughly double this.

Building a healthcare reserve — a dedicated pool of funds (ideally in the TFSA to preserve GIS eligibility) to handle these costs — is a smart approach for retirees who want to be prepared for the full range of potential healthcare expenses.