{"id":499669,"date":"2026-06-18T20:27:08","date_gmt":"2026-06-18T20:27:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/499669\/"},"modified":"2026-06-18T20:27:08","modified_gmt":"2026-06-18T20:27:08","slug":"when-eyeing-early-retirement-how-do-health-care-costs-in-canada-and-the-u-s-compare","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/499669\/","title":{"rendered":"When eyeing early retirement, how do health care costs in Canada and the U.S. compare?"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Staff work inside the Alternate Level Care unit at the Southlake Regional Health Centre in Newmarket, Ont., in March, 2022.Fred Lum\/The Globe and Mail<\/p>\n

As a Canadian voice in the Financial Independence, Retire Early (FIRE) community, I often find myself explaining our health care system to our well-meaning, but misinformed, American readers. <\/p>\n

Are there wait times to see a doctor? Sometimes. Could it be better? Absolutely. Would I trade it for the system they have in the United States? Not in a million years.<\/p>\n

One of those readers recently asked me, \u201cHow much do you think it\u2019s worth?\u201d That\u2019s an interesting question.<\/p>\n

There are many ways to evaluate a health care system, but as someone who sees the world through a personal-finance lens, my answer may surprise you.<\/p>\n

The first step in creating a retirement plan is identifying recurring expenses, such as rent or food. These allow us to calculate how big a person\u2019s portfolio needs to be in order to retire. For the most part, this process is pretty similar for American or Canadian retirees \u2013 except when it comes to health care.<\/p>\n

They planned to retire early. Rising costs are putting that to the test<\/a><\/p>\n

Want to feel good about being Canadian? Join me as I walk through the chaos of the U.S. health care system.<\/p>\n

It\u2019s the No. 1 question Americans ask when writing to me: \u201cWhat about health care?\u201d<\/p>\n

Most Americans\u2019 health insurance is provided by their employer, but for early retirees, this won\u2019t work. They have to rely on health insurance purchased on the Affordable Care Act, or ACA, exchanges.<\/p>\n

When it comes to the Affordable Care Act \u2013 also known as \u201cObamacare\u201d \u2013 how \u201caffordable\u201d that care is varies wildly by state.<\/p>\n

Florida is an example of a particularly expensive state for health care. There, a healthy 40-year-old couple with no children are generally not eligible for Medicaid, which is their single-payer health insurance system for low-income families. So they must rely on a plan purchased on the Obamacare exchanges.<\/p>\n

The ACA provides federal subsidies to help pay for these plans, and if our early-retiree couple reports just enough taxable income annually to qualify, these subsidies can reduce their insurance premiums dramatically, potentially even to $0. But in another quirk of the American health care system, just because you have insurance doesn\u2019t mean your health care is free going forward. <\/p>\n

ACA plans only pay a portion of health care costs, leaving the patient on the hook for potentially thousands more in the form of deductibles and co-pays. The ACA limits<\/a> how much a family\u2019s out-of-pocket costs can be for a year, but for 2026 that limit is a whopping US$21,200.<\/p>\n

In a nightmare scenario of someone retiring in a conservative state with the lowest-premium plan, and then developing a life-altering disease such as cancer that requires expensive continuing treatment, that recurring expense could be US$21,200 a year despite having insurance.<\/p>\n

Opinion: We are making the exact same mistake in health care as we did in housing<\/a><\/p>\n

FIRE advocates commonly use the \u201cRule of 25,\u201d of multiplying a recurring expense by 25, to arrive at an estimate for the investment portfolio required to cover that expense. Budgeting for this worst-case scenario of health care costs in Florida would require US$21,200 x 25 = US$530,000, or approximately C$745,000.<\/p>\n

In Canada, doctor and hospital services are covered. And even in the case of prescription drugs, which are not universally covered, most provinces and territories have a system in place that limits drug costs to a percentage of family income.<\/p>\n

Ontario\u2019s Trillium drug benefit program, for example, limits a family\u2019s prescription drug costs to 4 per cent of their household income. In other words, if you have no income, prescription drug costs are generally free, or close to it.<\/p>\n

The exception is Quebec, which sets the maximum out-of-pocket dollar amount<\/a> for prescription drugs at $1,232 a year, rather than a percentage of reportable income. So for the same couple retiring early in Quebec, their medical expenses would be limited to $1,232 x 2 = $2,464 a year, or a total of $61,600 over 25 years. <\/p>\n

In all, I would argue that the Canadian health care system is worth $745,000 – $61,600 = $683,400, because that\u2019s how much extra a couple would need to save to retire in a place like Florida where a socialized single-payer health care system doesn\u2019t exist.<\/p>\n

Is our health care system perfect? Of course not. Could it be improved? Always. But if I were to put a price tag on that safety net, it would be worth nearly $700,000 for that one retired couple.<\/p>\n

And not having to worry about potentially ruinous health care costs in retirement? Priceless.<\/p>\n

Bryce Leung and Kristy Shen retired in their 30s and are authors of the bestselling book Quit Like a Millionaire<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Staff work inside the Alternate Level Care unit at the Southlake Regional Health…\n","protected":false},"author":2,"featured_media":499670,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[246,229,247,220,218,248,245,217,236,237,232,219,216,184,243,242,235,227,259,221,222,234,163,521,85,46,230,231,224,249,225,254,255,257,252,256,250,253,223,240,241,238,239,251,228,125,244,233,226,126,258],"class_list":["post-499669","post","type-post","status-publish","format-standard","has-post-thumbnail","category-healthcare","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-health","tag-healthcare","tag-il","tag-israel","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/499669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=499669"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/499669\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/499670"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=499669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=499669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=499669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}