Understanding the IFHP Co-Payment Changes: Federal Health Coverage for Refugees and Protected Persons

By Andrew Lam

For the first time in its current structure, Canada’s Interim Federal Health Program (IFHP) introduced formal co-payments, requiring refugees and protected persons to pay out-of-pocket for essential supplemental care. Here is what the changes mean and what the settlement sector needs to know.

As of May 1, 2026, Immigration, Refugees and Citizenship Canada (IRCC) introduced co-payments for supplemental health products and services under the Interim Federal Health Program (IFHP). The change was first signaled in Budget 2025 and takes effect for all IFHP-eligible beneficiaries, including Government-Assisted Refugees (GARs), Privately Sponsored Refugees (PSRs), and refugee claimants. Basic health care, including doctor visits and hospital care, remains fully covered with no co-payments required.

Who is Affected

Government-Assisted Refugees (GARs) Resettled through the RAP; IFHP is their primary health coverage framework on arrival
Privately Sponsored Refugees (PSRs) Sponsored by groups or individuals; eligible for IFHP supplemental benefits
Refugee Claimants Awaiting a decision on their asylum claim; eligibility may be affected by recent policy changes
Other Protected Persons Includes Convention refugees and others designated eligible under IFHP regulations
Settlement and Protection Organizations (SPOs) Frontline organizations supporting IFHP-eligible clients; responsible for navigation, referral, and client preparation under the new co-payment model

Source: IRCC, Changes to the Interim Federal Health Program (January 27, 2026)

AAISA is publishing this analysis to help settlement-sector organizations understand what has changed, how it affects the clients they serve, and where important uncertainties remain as the program adapts.

$4 Co-payment per eligible prescription filled or refilled under the IFHP, effective May 1, 2026 (IRCC, January 27, 2026)
30% Co-payment on all other supplemental services, including dental, vision, counselling, and assistive devices (IRCC, January 27, 2026)
$127M Projected federal savings in 2026–27, rising to $232M annually (IRCC, as reported by CBC News, April 23, 2026); PBO estimates out-of-pocket costs of $231–$255 per beneficiary by 2029–30 (Parliamentary Budget Office, May 26, 2026)

What the IFHP Does and Who It Covers

The Interim Federal Health Program has provided limited and temporary health coverage to eligible newcomers since 1957. It bridges the gap between arrival in Canada and eligibility for provincial or territorial health insurance. For Government-Assisted Refugees arriving through the Resettlement Assistance Program, the IFHP is their primary health coverage framework during the critical early settlement period, a period that often includes addressing physical and mental health needs accumulated over years of displacement and precarious circumstances.

Eligible beneficiaries include Government-Assisted Refugees, Privately Sponsored Refugees, refugee claimants, and certain other protected persons and vulnerable groups. In Alberta, these populations are served across eight RAP-designated communities: Calgary, Edmonton, Brooks, Lethbridge, Red Deer, Medicine Hat, Grande Prairie, and Fort McMurray. The IFHP is administered federally, but its day-to-day navigation, including helping clients understand eligibility, find registered providers, and access services, falls heavily on frontline settlement workers.

What Has Changed and What Has Not

Effective May 1, 2026, IFHP beneficiaries are responsible for two new co-payment obligations paid directly to health care providers at the time of service. The federal government framed the changes as a sustainability measure. IRCC projects savings of approximately $127 million in 2026–27, rising to $232 million annually in subsequent years. The Parliamentary Budget Office estimates the co-payment model will reduce federal IFHP costs by $217 million annually by 2029–30, and projects that out-of-pocket costs will reach $231 per asylum seeker and $255 per in-Canada resettled refugee by that same year.

What Has Changed	What Has Not Changed
$4 fee per eligible prescription filled or refilled 30% co-payment on all supplemental services, including dental, vision, mental health counselling, physiotherapy, and assistive devices Co-payments paid directly to providers at point of service Providers required to display fee notices and issue receipts	Physician visits, hospital care, and emergency services remain fully covered with no co-payments Eligibility categories are unchanged — GARs, PSRs, refugee claimants, and other protected persons continue to qualify under the same terms The IFHP’s core mandate and program structure are unchanged Provincial and territorial health insurance is unaffected

Why These Changes Emerged Now

IFHP costs grew sharply over the past several years, driven by a significant increase in the volume of asylum claims filed in Canada. The Parliamentary Budget Office projects that total program costs will reach nearly $1.0 billion in 2025–26 and rise to over $1.5 billion by 2029–30; even with the co-payment model in effect. The co-payment model changes were identified in Budget 2025 as part of the federal government’s Comprehensive Expenditure Review, which targeted a 7.5% reduction in direct program spending across many departments.

The federal government has simultaneously reduced resettled refugee admission targets. The 2026–2028 Immigration Levels Plan set a Government-Assisted Refugee target of 29,300; down from 49,115 in 2024. For RAP service providers, this combination of lower arrival volumes and reduced per-client health coverage represents a meaningful shift in the operating environment.

It is worth noting that a comparable reduction in IFHP benefits was attempted by the Harper government in 2012 and subsequently challenged in court. That appeal was abandoned when the Trudeau government was elected. The current co-payment model is structured differently, it does not eliminate coverage categories but shifts cost-sharing to the point of service, but the historical precedent is relevant context for sector organizations tracking how policy in this area has evolved.

What Remains Uncertain

The co-payment structure itself is defined, but several implementation questions remain open. Provider behaviour is one area of uncertainty: IRCC has noted that service providers are being instructed to display fee notices and issue receipts, but how consistently IFHP-registered providers adapt to the new billing model, and how many choose to withdraw from the program due to added administrative complexity, will emerge over the coming months.

IRCC has stated that the impact of the changes will be “closely monitored to safeguard public health and ensure Canada continues to meet its domestic and international legal obligations.” What specific monitoring mechanisms exist, what thresholds would trigger policy adjustment, and when findings will be reported publicly are not yet known.

Key Questions Awaiting Further Clarity

Whether any hardship or exemption provisions will be established for beneficiaries who cannot afford co-payments.
How the monitoring framework will be structured and what data will be publicly reported
Whether IFHP-registered provider networks will contract as providers exit the program due to billing complexity.
What impact deferred supplemental care will have on emergency department utilization and downstream system costs.
Whether settlement organizations will have any role in supporting clients with co-payment navigation or hardship referral.

Implications for the Settlement Sector

Settlement organizations working with GARs and other IFHP-eligible clients will need to update the information they provide to newcomers. Clients who were previously able to access dental care, vision care, counselling, and medications at no direct cost will now face out-of-pocket obligations they may not anticipate and often cannot easily afford. Settlement workers are positioned to play a key role in preparing clients for these changes, explaining what the co-payments are, which services are affected, and where to find IFHP-registered providers using IRCC’s Provider Search tool.

The co-payments create concern around mental health counselling. GARs arriving through the RAP often carry significant trauma histories, and timely access to counselling has been understood within the sector as essential to successful settlement. A 30% co-payment on counselling sessions introduces a financial barrier at precisely the point when clients are most vulnerable. Settlement practitioners have described the concern clearly: these clients are already managing the financial pressures of early settlement and adding health costs to that burden of risks deferral of care that will be more costly to address later.

Dental care carries comparable concerns. Many newcomers arrive without having access to regular dental care for years. The 30% co-payment on dental services may cause clients to defer treatment, with downstream consequences for overall health and well-being. The Parliamentary Budget Office has specifically cited ER utilization risk as one downstream consequence if beneficiaries delay care they would otherwise have accessed through the IFHP.

There is also an organizational capacity dimension. Settlement workers are already managing increasingly complex caseloads in an environment of reduced federal admission volumes and tightening program resources. The co-payment changes add a new layer of client navigation support to that work without adding clarity about how organizations should respond if clients face financial hardship in accessing care; they remain nominally eligible for.

Implications for Clients and Vulnerable Populations

Financial Vulnerability

The populations affected by the IFHP co-payment changes are among the most economically vulnerable newcomers in Canada. GARs arrive with significant needs and limited resources. They are supported through the Resettlement Assistance Program for up to one year, during which their income is tied to RAP support levels. These are modest amounts that are designed to cover basic needs, not unexpected health expenses. Adding prescription co-payments and 30% cost shares to that financial picture creates real barriers to care for people who are navigating settlement demands simultaneously.

Access Barriers

The Canadian Council for Refugees has characterized the changes as creating “financial barriers that will put critical health care services out of reach for refugees.” They also note that co-payments create administrative burdens that may reduce the willingness of health care providers to serve these populations; a concern with direct relevance in smaller Alberta communities where IFHP-registered provider networks are already thin.

Claimant-Specific Risks

Refugee claimants face additional complexity. Unlike GARs, who arrive with resettlement support, claimants are navigating the asylum system without guaranteed income supports and are often barred from working during portions of the claims process. Their IFHP eligibility may also be affected by other immigration policy changes, including a provision that now bars some claimants who entered Canada more than one year ago from filing claims which may affect eligibility for IFHP for certain individuals.

What to Watch For

Program Monitoring and Reporting: IRCC has committed to monitoring the impact of the co-payment changes. Watch for any public reporting on utilization shifts, provider network changes, or downstream emergency department impacts — and whether the co-payment model changes are shared publicly in a way that settlement organizations can access and act on.
Provider Network Stability: Whether IFHP-registered providers, particularly dental, vision, and mental health providers, remain in the program or exit due to billing complexity will significantly shape whether beneficiaries can access the services they remain eligible for. This is especially important in smaller Alberta communities with fewer registered providers.
Hardship Provisions: There are currently no officially announced exemptions or hardship provisions for IFHP beneficiaries who cannot afford co-payments. Watch for whether federal or provincial measures emerge to address the financial gap for the most vulnerable clients.
Intersection with GAR Targets and RAP Programming: The reduction in GAR admission targets under the 2026–2028 Levels Plan means that fewer new IFHP beneficiaries will be arriving through the RAP stream. Settlement organizations will be serving a different volume and, potentially, a different profile of IFHP-eligible clients over the next planning cycle.
Legal Challenges: Given the historical precedent of the 2012 IFHP reductions being challenged in court, it is worth monitoring whether any legal challenge to the current co-payment model is advanced by advocacy organizations, and whether IRCC’s framing of the changes as compliant with domestic and international obligations holds under scrutiny.

AAISA’s Position

AAISA is concerned about the impact of IFHP co-payment changes on the clients that Alberta’s settlement sector serves. Government-Assisted Refugees and other IFHP-eligible newcomers arrive in Alberta with significant health needs and limited financial resources. Supplemental health coverage, including mental health counselling, dental care, vision care, and medications, an essential benefit for these populations and foundational for successful settlement.

AAISA acknowledges the federal government’s stated goal of ensuring long-term program sustainability; however, effective sustainability requires more than cost-shifting to beneficiaries. It requires a monitoring framework that is transparent and publicly reported, a clear process for responding to evidence of access harm, hardship provisions for those who cannot meet co-payment obligations, and a commitment to maintaining the registered provider networks that make the program functional. AAISA will continue to monitor implementation and engage on behalf of member organizations and the clients they serve.

Member organizations with questions, observations, or client-level concerns about the IFHP changes are encouraged to contact AAISA directly.

References

Immigration, Refugees and Citizenship Canada (2026, January 27). Changes to the Interim Federal Health Program. Canada.ca. https://www.canada.ca/en/immigration-refugees-citizenship/news/notices/changes-ifhp.html

Parliamentary Budget Office (2026, February 12). Projecting the Cost of the Interim Federal Health Program. https://www.pbo-dpb.ca/en/publications/RP-2526-023-C–projecting-cost-interim-federal-health-program–prevision-cout-programme-federal-sante-interimaire

Parliamentary Budget Office (2026, May 26). Reviewing the Administrative and Fiscal Impacts of the Interim Federal Health Program. https://distribution-a617274656661637473.pbo-dpb.ca/ef52b7ecb0066940dd464a9650c5eab3789febdba236cd8970d8ca84819203ef

Canadian Council for Refugees (2026, April 14). CCR Denounces Cuts to Refugee Healthcare. https://ccrweb.ca/en/canadian-council-refugees-denounces-cuts-refugee-healthcare

CBC News (2026, April 23). Upcoming federal health care cuts could put refugee claimants at risk. https://www.cbc.ca/news/canada/windsor/canada-co-pay-system-refugee-care-devastating-9.7173297

FCJ Refugee Centre (2026, April 9). Reverse Cuts to the Refugee Healthcare Coverage. https://www.fcjrefugeecentre.org/2026/03/reverse-cuts-to-the-refugee-healthcare-coverage/

Refugee Sponsorship Training Program (2026, April 28). Changes to the Interim Federal Health Program (IFHP). https://www.rstp.ca/en/refugee-sponsorship/latest-policy-program-update/changes-to-the-interim-federal-health-program-ifhp/

AAISA internal briefing (2026, June). IFHP Co-Payment Changes: Implications for Alberta’s Settlement Sector.