This article was reviewed by Chris Singer, CFP®.
Overview
To truly enjoy your retirement, you have to plan for both the unexpected and the expected. Healthcare costs are both. We’re breaking down both the predictable and unpredictable costs of healthcare in retirement.
Healthcare During Retirement in British Columbia: Key Medical Costs and Considerations
Retiring in British Columbia is a dream come true for many people. It’s a beautiful place to live; there is so much to see and do, the weather is mild, and it’s easy to take a drive and experience something new. However, the cost of living is high, so budgeting for it alone requires careful planning, and part of that planning needs to include health-related expenses.
Your net worth can significantly affect your medical care costs, and understanding which costs are covered by the government and which are out-of-pocket is crucial for a secure retirement (and for your peace of mind).
We’re going into a lot of detail, outlining the major medical care and health care cost areas, to help you budget for a comfortable retirement.
Public Healthcare Coverage: Intro to MSP and PharmaCare
Medical Services Plan (MSP): B.C.’s public health insurance covers medically necessary physician and hospital services. As of 2020, MSP no longer charges monthly premiums to residents, making basic coverage essentially “free” (funded through taxes). Ensure you’re enrolled in MSP to benefit from doctor visits and hospital care coverage.
Fair PharmaCare (Prescription Drug Coverage): B.C.’s PharmaCare program helps with the cost of prescription drugs and designated medical supplies. Coverage is income-based, which means lower-income families get more assistance, while higher-income seniors will have a larger deductible before PharmaCare kicks in.
What this means for you:
In practice, you pay for eligible prescriptions out-of-pocket until you meet your annual deductible (determined by your income from two years prior). After that, PharmaCare covers a percentage of drug costs for the rest of the year, up to an annual family maximum. For PharmaCare assistance levels in 2025, you can learn more here. To see deductibles and family maximum structures, you can learn more here.
This means high-net-worth retirees should be prepared for potentially significant medication expenses before PharmaCare coverage begins. Also note that not all medications are covered by PharmaCare. Roughly half of the drugs on the Canadian market are not covered, even after the deductible is met, and would need to be paid entirely out-of-pocket or through private insurance.
In short:
MSP covers core medical care, but “extras” like dental, vision, and many drugs are not covered by MSP.
Medical Care Expenses
Dental and Vision Care, Hearing and Paramedical Services
Dental Care: Routine dental services (cleanings, fillings, extractions, dentures, etc.) are not covered by MSP for most seniors. Unless you qualify for low-income assistance programs, you’ll pay for dental care privately. This can be a significant expense in retirement: exams and cleanings, crown or bridge work, and periodontal treatments can amount to thousands of dollars over time.
Many retirees opt to purchase extended dental insurance or set aside funds annually for dental bills.
Note: a new federal Canadian Dental Care Plan is being rolled out to help cover dental costs, but it targets low-to-moderate income individuals and those without private insurance. High-income retirees likely won’t be eligible and should plan to self-fund their dental care or use private insurance.
Vision Care: MSP covers medically necessary eye care (surgeries for cataracts or eye disease). For routine vision needs, coverage is limited. Seniors 65+ do get one routine eye exam annually, partially covered by MSP, and MSP will pay up to about $47 for an eye examination.
Any cost beyond that (optometrists often charge more) and items like prescription glasses or contact lenses are out-of-pocket. Budget for new prescription glasses every couple of years and other vision needs. Private health insurance can help offset some of these costs if you include vision coverage.
Hearing and Other Services: Age-related hearing loss is common in retirement, but hearing aids and audiology tests are not covered by MSP. A pair of quality hearing aids can cost several thousand dollars and is a significant cost to budget for.
Paramedical Services: Services like physiotherapy, chiropractic, or massage therapy outside of a hospital setting are not covered by MSP (unless covered under a special program). These paramedical services should be anticipated in your budget or covered by an extended health plan.
Prescription Medication Costs
Prescription drug costs can be a major expense in retirement: chronic conditions tend to increase with age, and you’ll have to plan for new medications.
Key Points:
Fair PharmaCare Deductibles: B.C.’s Fair PharmaCare program requires you to pay for 100% of your family’s eligible prescription drug costs each year until you reach your income-based deductible
- For example, a retired couple with a relatively high retirement income will have a higher deductible (potentially in the thousands of dollars per year) before PharmaCare starts subsidizing drug costs. High-net-worth seniors should be prepared to cover considerable medication expenses annually until this threshold is met.
Post-Deductible Coverage: Once you’ve paid your deductible in a given year, PharmaCare will cover a large portion of further eligible drug costs, reducing your burden. There is also a maximum annual payment limit (after which PharmaCare covers 100% of further costs in that year). However, co-payments may apply before reaching the maximum. It’s important to register for Fair PharmaCare upon retirement (if not automatically enrolled) so that you’re protected from catastrophic drug costs; without registration, you receive no assistance.
Non-Covered Medications: As noted earlier, many medications are not on the PharmaCare formulary or require special approval. Drugs not covered by PharmaCare (for example, certain newer high-cost medications or lifestyle drugs) will not count toward your deductible and are never subsidized.
If your physician prescribes a drug that PharmaCare doesn’t cover, you will need to pay the full cost or have a private plan to assist. This is a significant consideration for cutting-edge therapies (like some cancer drugs ). Affluent retirees may want to maintain a private drug insurance plan to cover these gaps, or ensure an emergency fund is available for such needs.
Remember: PharmaCare does not reimburse dispensing fees until after the deductible is met, and even then, only at a set rate. Dispensing fees are a minor line item to budget for, but worth noting in your healthcare costs because they can add up.
Private Health Insurance Options for Retirees
Considering private insurance plans? Let’s take a look.
Extended Health Benefit Plans: These are personal health insurance packages that can cover a mix of prescription drugs, dental, vision, and other health services.
If you have benefits with your employer, you can typically convert coverage at retirement. This can be done if you have existing medical conditions. Always speak with your employer and your advisor before retiring.
If you no longer have employer benefits, you might purchase a plan from providers like Pacific Blue Cross, Sun Life, Manulife, etc. These plans help “fill the gap” in coverage by reimbursing costs for dental visits, new glasses, physio and massage therapy, and prescription drugs that government plans don’t fully pay for.
The plans are customizable. For example, you can choose a plan prioritizing dental and vision, or one with a higher drug coverage maximum. Premiums for individual retiree plans are often higher than $150 per month, and costs vary based on age and coverage level. It is also important to note that these plans typically come with coverage limitations.
Travel Medical Insurance: Travel is a part of most retirement plans. All those places you were too busy to see? They’re on your bucket list now. So, whether you’re wintering in warmer climates or taking international trips, remember MSP provides very limited coverage outside of Canada. For travel abroad, MSP will reimburse around $75 per day for emergency inpatient hospital care, which we all know won’t cover much.
This makes travel insurance essential each time you leave Canada (or even travel to another province for an extended stay, since certain services might not be covered out-of-province).
The cost of travel insurance increases with age and can be a few hundred dollars for a multi-week trip (more if you have pre-existing conditions). Be sure to factor this into your retirement travel budget.
We always recommend planning your big trips early in retirement when insurance costs are lower, and then exploring all the beautiful places Canada has to offer later in your retirement.
Conclusion
That was a lot of information, wasn’t it? We really believe the key to peace of mind is proactive planning and, of course, we’re here to help you plan for your retirement, but the more you know, the more secure you can feel. Another big piece of advice? Prioritize living a healthy life and preventative care now, as investments in health will pay off in lower costs (and more fun) later.
A well-planned retirement isn’t just about having enough income; it’s about ensuring your health—your most valuable asset— is protected. With the information above, you can better strategize for healthcare spending and enjoy your retirement knowing you have this aspect well in hand.