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18 minute read Published on Jul 9, 2026 by BrokerLink Communications
In Canada, getting medical costs paid for usually involves the doctor, the patient and the insurer, each working together to do their part under two different systems. Public health insurance pays doctors and hospitals directly. Private health insurance pays you back for other medical costs.
So, how does insurance reimbursement work in Canada? Read on to learn more about who pays, when you still pay, when you’re reimbursed and how you can avoid common payment delays.
Most confusion comes from mixing up the public system with private insurance. They work in different ways and cover different things. Here’s how they differ:
Public health insurance is the Canadian healthcare system, known as Medicare, that covers medically necessary doctor and hospital care. It allows you to get essential medical care without worrying about how you’re going to pay for it. Each province and territory runs its own plan based on the Canada Health Act, but the structure is similar across Canada.
The federal government sends money to provinces and territories to help pay for healthcare through something called the Canada Health Transfer (CHT). When a service is publicly covered, you usually don’t pay at the appointment and you don’t file a reimbursement claim. Here’s how this looks:
You show your provincial health card
You receive a covered service from a participating healthcare provider
The provider sends a claim to the province
The province pays the provider
From your point of view, nothing else happens. There is no reimbursement step for you because you didn’t pay for the appointment. The payment still happens, it’s just between the healthcare provider and the government instead of between you and the provider.
This is why, instead of just saying “healthcare in Canada is free,” you may hear some people say that public healthcare in Canada is “free at the point of care.” You still pay for it through your federal and provincial taxes.
You may be asked to pay when certain health services fall outside what the public system covers or if you’re not eligible for coverage. Common examples include:
Medical services that are not considered medically necessary under the provincial plan
Forms, notes or reports requested for personal, legal or work reasons (e.g., a doctor’s note for missed work)
Certain tests or procedures that are done outside hospital settings
Medical services that are provided by someone who doesn’t participate in the provincial plan
Care received while you are not yet covered or temporarily not eligible (e.g., expired health card)
These are when you would pay the healthcare provider directly. You can then check whether a private plan will reimburse part of that cost.
Private health insurance exists in Canada mainly to cover the gaps left by public coverage, such as:
Prescription drugs that are filled at a pharmacy
Dental care
Vision care, such as glasses and contact lenses
Paramedical services like physiotherapy, chiropractic, massage and psychology
Ambulance services
Some medical devices and supplies
The normal process is reversed for private insurance:
You receive the service
You pay the provider
You submit a claim
The insurer reimburses you or sometimes pays the provider directly
With private coverage, either the healthcare provider directly bills the insurer and you pay only your share of the cost or you pay the full amount upfront and submit a claim to be reimbursed.
Here’s a quick breakdown of how public care is paid and how private claims usually work:
Feature
Public direct billing
Private manual reimbursement
Who pays at the appointment
Nobody (for covered medical services)
Usually you
Who sends the claim
The provider
You or sometimes the provider
What you need to show
Your valid provincial health card
Receipts and your health insurance plan details
How long payment takes
Not visible to you
Generally, a few days to a few weeks
Most insurers have time limits that range from 90 days to a year for submitting any health insurance claims. If you miss the deadline, the claim is usually refused even if it would otherwise be covered.
The public and private systems are layered, not competing.
Public insurance handles core medical care
Private insurance fills in many of the day-to-day healthcare costs that public plans don’t cover
In fact, you rarely choose between them. And you’re often using both, depending on the service. For example, if you go to a clinic for an illness or injury, your public insurance covers that. Then, if you fill a prescription afterward or book a physiotherapy appointment, your private insurance may apply.
The core of public coverage is standardized, but the everyday medical expenses around prescriptions, dental, vision and therapy depend a lot on where you live and what programs you qualify for. For example:
Prescription drug coverage often varies by age, income and province.
Children may have public vision coverage in some provinces, but adults often do not.
Health services like physiotherapy, chiropractic, massage and psychology are generally not covered by public plans outside hospital settings.
Some, but not all, provinces also have:
Public programs for specific groups, like limited dental programs for children, seniors or low-income residents.
Public programs for certain devices, such as mobility aids or supplies for specific chronic conditions.
Take prescription drugs as an example:
In Ontario, most working-age adults rely on private plans for prescription drugs. Ontario’s public medication coverage is mainly for people under 25, people 65 and older and people on certain social programs.
In British Columbia, there is a public drug program called Fair PharmaCare, but how much it pays depends on household income. Many people still use private insurance for everyday prescriptions until they reach their public deductible.
In Québec, residents are required to have prescription drug coverage either through a private plan or through its public plan run by Régie de l’assurance maladie du Québec (RAMQ).
This is why two people with similar needs can have very different out-of-pocket costs depending on where they live.
With private insurance, there are a few limits that decide what gets paid, how much gets paid and when you’re on the hook for the rest. Here's what you should know:
A deductible is the amount you pay before the plan starts paying. Some plans have no deductible, while others have a small one, like $25, $50 or $100 per year. Once you reach your deductible, your plan starts paying on future claims. Some plans may also have separate deductibles for different categories.
Your plan has a $50 annual deductible for paramedical services. Your first massage appointment of the year costs $80. You pay the $80 and the first $50 of that goes toward your deductible.
You can still submit the claim so the insurer can record that your deductible has been met, but you likely won’t be reimbursed for any part of that first visit. But on your next paramedical visit later in the year, you can start the reimbursement process.
Coinsurance is the percentage split between you and the insurer. It’s often written as “80% covered” or “90% covered,” up to your annual or lifetime coverage limit. That means the plan pays that percentage of the eligible amount and you pay the rest.
Your plan covers physiotherapy at 80%.
The eligible amount for your visit is $100.
The insurer pays $80.
You pay $20.
If the provider charges more than the eligible amount, you may also have to pay the difference.
Most plans limit how much they will pay for each type of service or how many visits they will pay for in a year or two. Once you reach the maximum, the plan usually pays nothing more in that category until the plan year resets. For example, you may have:
$500 per year for massage therapy
$300 every two years for glasses
$1,500 per year for major dental
$5,000 for prescription drugs
Some plans also use lifetime maximums, where once you reach that, the insurer won’t cover any future costs for that service. For example, your plan may cover $5,000 a year for prescription drugs with a lifetime maximum of $250,000. Or you may have a lifetime limit for specific dental treatments, like orthodontics or implants, without any annual allowance.
You start going to massage therapy once a month in February and each visit costs you $100. Your massage coverage per year is $500. Your coinsurance covers 80%, so your insurer pays $80 per visit. Here's a table to help visualize:
Month
How much you pay
Insurer pays per visit
Cumulative insurer payments
February
$20
$80
March
$160
April
$240
May
$320
June
$400
July
$480
August
$500
In August, the insurer pays the remaining $20 of your annual massage coverage for the visit and you have to pay the remaining $80. After that, the annual maximum is reached and you pay the full cost of any remaining visits that year.
A waiting period is the amount of time you must be covered before your benefits start. This is more common with individual plans and with new employees joining an employer’s group plan.
You start a new job at the end of the year and you join the group benefits plan on January 1. But your dental benefits have a three-month waiting period, so your coverage won’t start until April 1. This means that any dental work you get done before April 1 will not be covered.
Group plans are usually offered through employers, while individual plans are bought directly by the person. In general, employee group benefit plans often have broader coverage and fewer medical questions than individual plans.
That being said, some people still buy their own insurance directly instead of getting coverage through work. These plans work much like group plans, but they usually have lower maximums, more exclusions and longer waiting periods before benefits start.
But even with those limits, individual plans can still be useful when no employer coverage is available or when someone needs coverage outside of work.
Prescription coverage is where people most often see both public and private systems working together. Some people rely mostly on public coverage, while others rely mostly on private coverage. Some provinces offer public drug programs that are based on age, income or specific medical conditions. Private drug coverage works differently, typically working with:
Formularies (lists of covered drugs)
Maximum dispensing fees
Tiers (generic vs. brand)
Prior authorization for certain drugs
If a generic version exists, many private plans reimburse based on the generic price. You can still choose the brand-name drug if you’d prefer, but you may pay the difference.
Some drugs also require approval before the plan will pay for them. This often applies to expensive or specialty medications. The insurer may ask for a:
Diagnosis
History of other treatments tried
Specialist’s prescription
Just keep in mind that this process can take time and it may delay your reimbursement.
These are the services people most often use private insurance for, because public plans usually don’t cover them outside hospital settings. Take a look:
Most dental care is paid through private plans or out of pocket. Dental plans usually cover a portion of the cost and leave the rest to you. For example, a plan might pay most of the cost for cleanings and fillings and less for bigger procedures like crowns. Plans also usually limit how much they’ll pay in a year or over your lifetime.
Before expensive work, dentists often send a treatment plan to the insurer so you can see what the plan is likely to pay before you agree to the work. For expensive dental work or specialty drugs, plans often require approval before treatment.
Most adult vision care is not publicly covered, so private insurance or out-of-pocket payment is common. Vision benefits are usually set as a fixed amount you can use every so often. For example, a plan might allow a certain dollar amount, like $300 or $500, every two years for glasses or contacts. If what you buy costs more than that amount, you’ll need to pay the difference.
Services like physiotherapy, chiropractic, massage and psychology are usually paid through private insurance if you have it. As we mentioned earlier, plans often limit how many visits they’ll pay for and how much they’ll pay for in a year. They may also require that the provider be properly licensed and some plans require a doctor’s referral. This is why two people can go to the same type of appointment and still get reimbursed differently.
Out-of-province or out-of-country care and even medical devices are handled differently and usually involve more steps and more out-of-pocket costs. Here's what you should know:
If you get care outside your home province, you can usually submit a claim to be reimbursed, but there are rules and time limits to follow. For example, Ontario residents must submit a claim to OHIP within 12 months of the service or treatment and the service must have been medically necessary.
In some cases, the provider in the other province will bill your home province directly and you won’t see a bill. Other times, especially in clinics or for certain services, you may be asked to pay upfront and sort out reimbursement afterward.
If you’re asked to pay, your home province will usually reimburse up to the amount it would have paid if the service had been provided at home. But if the provider’s charge is higher than that amount, you may be responsible for the difference. If you have private insurance, it may help you cover part of the difference.
Outside Canada, public health insurance usually pays very little or nothing at all. That means that if you need care while travelling, you are often dealing with the provider, the hospital and the payment yourself. In some cases, you pay the full cost upfront. Other times, the hospital may ask for a deposit before you can even receive treatment.
Travel insurance or extended health benefits with travel coverage are what usually pay for these costs. These plans often have their own rules, such as:
Calling an assistance line before treatment, if possible
Using specific hospitals where available
Submitting detailed paperwork afterward
And if you don’t follow those rules, your reimbursement may be delayed, reduced or denied.
Devices and supplies don’t particularly fit neatly into either the public or private system. While some devices may be partly covered by provincial programs, others may only be covered by private plans. And some are not covered at all. Coverage often depends on:
What the device is
Why you need it
Where you buy it
Whether you have approval before you buy it
For example, a mobility aid might be partly covered by a provincial program and partly covered by a private plan, but only if you buy it from an approved supplier and only after you get a prescription or assessment. So if you buy first and ask later, you may find that the plan won’t pay.
With private health insurance in Canada, you often pay upfront and then submit a claim for reimbursement. That means collecting the right supporting documents and sending them to the insurer. Once you do that, the claims process is usually straightforward. Take these steps:
Most insurance companies offer several options to submit claims:
Online portal or mobile app
Email or upload
Paper claim by mail
But submitting an online claim is usually the fastest.
For most claims, you need an itemized receipt that shows:
Your name (or the patient’s name)
The date of service or purchase
The provider’s name and type
The service provided
The amount paid
Some services may also need extra information. For example:
Prescriptions often need the drug name, Drug Identification Number (DIN), quantity, dispensing fee and prescribing doctor
Paramedical services may need the provider’s registration or license number
Some plans may also want a doctor’s referral
Before you book something, it’s a good idea to check your plan to see what’s covered and whether a referral or approval is required.
The process generally looks something like this:
Log in to your insurer’s portal or app
Select the benefit category (e.g., drug, dental, paramedical, etc.)
Enter the claim details
Upload a photo or scan of the receipt
Submit
You’ll usually get a confirmation right away. Don’t forget to keep detailed records of what you submitted, including receipts, forms and any messages about the claim, in case the claim is denied or needs a follow-up. Some plans may even require you to keep digital copies of receipts for up to six years because insurers will sometimes audit past claims and ask to see your documentation from them.
Timelines will vary by insurer and by submission method. Online submissions are often processed within a few business days. Paper submissions can take several weeks.
Many insurers offer direct deposit for reimbursements, so that you can get your money deposited directly into your bank account instead of waiting for a cheque in the mail.
But if your reimbursement seems to be taking longer than it should, it may be because something in the claim is missing or unclear. You can always follow up with your insurance provider or broker if you have any questions about your claim.
After your claim is processed, you should receive an explanation of benefits (often called an EOB). This usually includes the:
Amount charged
Amount eligible
Percentage covered
Amount paid by the insurer
Amount you owe
Reason codes for any reductions
This shows you what the insurer paid, what you owe and if anything was reduced or not covered.
When two plans can cover the same thing, insurance companies have to coordinate benefits to sort out who pays what and when. That usually means two partners both have coverage through work or a child is covered under both parents’ plans. Canada’s life and health insurers often follow industry guidelines like the CLHIA standard for this. These plans don’t talk to each other. You submit the claim to the first plan, then send whatever’s left to the second plan. But who pays first?
For your own expenses, your plan is first
For your partner’s expenses, their plan is first
For a child, plans usually use the parent whose birthday comes earlier in the year as the first payer
Here’s what that might look like:
You have dental coverage through your job and your partner also has dental coverage through theirs. You go to the dentist for a cleaning and the bill is $200. Your plan pays for 80% of the visit or $160, leaving $40. You then submit that $40, along with the explanation of benefits (EOB) from the first plan, to your partner’s plan. Their plan then covers 80% of the remaining $40 or $32. You end up paying $8 of the original $200.
Some employers in Canada offer reimbursements in addition to or instead of traditional insurance. These are known as health spending accounts (HSAs) and they’re often structured as a Private Health Services Plan (PHSP). You might also hear people call it a Health Reimbursement Arrangement (HRA) instead of HSA, but that’s actually a U.S. term.
So when it’s mentioned in Canada, it usually just means the same thing as an HSA. An HSA is not insurance. It’s a pool of money your employer sets aside for you to use for eligible healthcare expenses. Here’s how it might look:
Your employer sets an annual amount for you, such as $1,000.
You pay for an eligible expense, such as $120 for glasses.
You submit the receipt.
The employer or plan administrator reimburses you from the HSA balance.
But once the balance is used up, there is no more reimbursement until the next plan year. Let's dive deeper:
People usually use this for things insurance doesn’t fully cover. That might be the leftover part of a dental bill, part of the cost of glasses or something that public insurance doesn’t include at all. For example, if your insurance pays 80% of your visit to the chiropractor and you pay 20%, you can often use your HSA to reimburse that 20%.
It depends on how the employer runs the account. Most employers use a formal PHSP setup and only reimburse eligible medical expenses, so in that case, the reimbursement is not treated as taxable income. But if your employer just pays you back for medical costs outside a formal plan, that’s when it can become taxable.
If you pay for eligible medical expenses yourself and no plan covers them, you may be able to claim part of that cost on your tax return. This doesn’t work like reimbursement. You don’t get money back at the time of care and you don’t get the full amount back. Instead, it reduces your taxable income when you file your return, which can lower the tax you owe.
When a claim is denied, it’s usually because the insurer is missing something or because a plan rule was triggered. If a health insurance claim is rejected, you should always try to find out the reason first before you try to appeal it. Here are some of the most common reasons:
The insurer needs a detailed receipt that shows what you paid for, when and from whom. A credit card slip is not enough.
Some plans require a doctor’s referral for certain services. Without it, the claim may be rejected.
Generally, the provider must be licensed and registered in the right category. If not, the plan may not pay. If you’re not sure whether a type of provider is formally recognized, the Canada Revenue Agency (CRA)’s list of eligible practitioners can help.
The plan has already paid as much as it will for that service this year.
Once you understand how coverage and reimbursement work, most of the frustration comes from small, avoidable problems. Insurers and brokers often see the same few issues come up again and again: missing receipts, forgotten referrals and hitting limits without realizing it. Here are some tips to help you avoid them:
You should:
Keep itemized receipts (not just credit card slips)
Keep a copy of any referrals if your plan requires them
Check your annual limits early in the year
Coordinate your benefits if you have more than one plan
Keep track of your HSA balance and expiry dates if you have one
Ensure that you:
Decide whether to offer insurance, an HSA or both
Set clear rules for what can be reimbursed and what can’t
Consider using a proper administrator to review and keep track of reimbursements
Keep a detailed copy of all records and receipts
Learn about Québec’s different reporting requirements if you have Québec employees
If you want help applying any of this to your own situation, it can be useful to talk it through with a broker who looks at these plans every day.
If you want to learn more about individual or group health insurance, connect with a licensed BrokerLink advisor today. We can help you look at your options and understand how they work. We can also help you compare plans and understand what’s covered before you choose.
You can reach us by phone, email or in person at any one of our locations throughout Canada. You can also try out our free online quote tool, which can provide you with a competitive insurance quote in minutes!
Disclaimer: This article offers general information, not advice. The examples won’t match every plan and the rules vary by province and insurer. Always check your own plan booklet for the rules that apply to you.
