Canada's publicly funded health system is, in reality, a set of ten provincial and three territorial health systems. All 'medically necessary' health services provided by hospitals and doctors must be covered under provincial and territorial health care insurance plans. However, medically necessary services are not explicitly defined in the Canada Health Act. That means that health care insurance plans can vary across the country, and in some cases you may need to have a private insurance or pay out-of-pocket to obtain certain services.
The ability to make sense of the costs associated with health care (for example, what is covered or not) and pay medical bills or prescription drugs on time is called financial literacy. Knowledge and understanding of key concepts in health and finance are necessary to make informed choices based on one's circumstances and means. Making appropriate health decisions promote quality of life, the adoption of a healthy lifestyle and physical health.
Considering the financial insecurity that affects many individuals, how can financial literacy help plan, select and manage health expenses?
What research tells us
An evidence synthesis of 29 articles examined the concept of financial literacy applied to the health sector with the aim of planning and managing health expenses and treatment decisions.(1) Five main themes were identified:
1- financial management, which is the ability to balance a budget and understand expenses related to health care and insurance plans
2- the management of medical invoices, which allows us to identify and understand the items billed to us
3- understanding the different health insurance plans offered (public and private) and the associated vocabulary in order to be able to choose the best plan for your needs
4- the choice of appropriate care, services and health establishments based on available resources
5- planning for long-term care needs to identify or anticipate health care needs and plan a budget accordingly.
Findings show that many older adults, people with cognitive disabilities, those with low education and income, women, and racial and ethnic minorities often have lower levels of financial literacy applied to health. Poor financial and health literacy is associated with poorer health outcomes, from chronic conditions to mortality.
Adequate financial and health literacy promotes independent living and healthy aging, positively influences decision-making, and reduces the risks of depression, loneliness and hospitalization. Health promotion and disease prevention help delay the onset and progression, which can reduce future medical costs.
Plan for your future
It's never too late to:
• involve those around you (family, caregiver, health professionals) in identifying your current and future health care needs.
• check if government financial assistance programs exist to meet your needs.
• make a budget.