Download - 2009 General Meeting ● Assemblée générale 2009 Ottawa, Ontario ● Ottawa (Ontario) 2009 General…
2009 General Meeting ● Assemblée générale 2009Ottawa, Ontario ● Ottawa (Ontario)
Canadian Institute
of Actuaries
L’Institut canadien desactuaires
Session/séance :Pooling Speaker(s)/conférencier(s) : Bryan Ferguson
3 Issues
• Metrics on high cost claimants
• Description of government programs for high drug expenses and how the dynamics can affect pooling costs
• How differences in formularies affect claims costs
High cost claimants
• 4/10,000 beneficiaries will have claims >$25K
• Fastest growing segment of the market
High Cost Claimants in Telus Book of Business
Source: Telus Health Statistical Report 2008*AMC Estimates
$10K-15K $15K-$25K $25K and over Total
2002 2,440 2,256 561 5,257 2003 3,243 2,670 681 6,594 2004 3,844 3,453 1,021 8,318 2005 4,476 4,530 1,413 10,419 2006 5,551 5,611 1,906 13,068 2007 6,020 6,870 2,702 15,592
Claims/ claimant
67.13 48.57 56.73
CAGR 20% 25% 37% 24%
Estimated share of total drug plan costs +/- 10%*Estimated number of beneficiaries (2007): 6- 7 Million*
Claims cost
Number of Claimants by Total Claims Cost
Provincial Coverage of High-Cost Claimants
10 provinces, 5 different approaches!
Universal plan model
Province is first payer with deductible based on income – typically 2-5%
Private plans cover costs under deductible and drugs not on formulary
Provinces using this model
BCSaskatchewanManitoba
“Catastrophic” model
Province is second payer – eligibility based on out-of-pocket cost with means test (typically 3-10% of income)
Private plans cover costs until beneficiary is eligible for gov’t coverage (if they apply)
Provinces using this model
Ontario (Trillium)Nova ScotiaNewfoundland
Mixed Public/Private Model
Residents belong to either a public plan or private plan. Government sets minimum standards for benefits, copays, etc.
Private plans can provide “better” than minimum. Pooling of large claims
Provinces using this model
Quebec
“Top up” Model
Province offers supplemental plan on a voluntary basis – 3 month waiting period
Government is second payer to private – this helps the beneficiary but not the plan sponsor
Provinces using this model
Alberta
No coverage
(May be some special consideration given on a case by case basis)
Group plans have no government safety net – also cover many retirees with no government plan
Provinces using this model
New BrunswickPEI
Some Provinces provide Special Programs for Take-Home Cancer Drugs and other Conditions
• BC,AB,SK all cover the full costs of cancer drugs (provided they are on the cancer formulary), whether or not the patient has group coverage
• Some provinces have programs for MS, HIV/AIDS, Rare diseases. First payer in some cases
• What your plan pays depends on where your beneficiaries live
How group and public plans deal with specific high-cost drugs affects costs as well
Case study of 4 specific high cost drugs
Inter-Insurer Variations in Drug Coverage
4 Expensive drugs (>$10k/ yr)95%+ of all group plan members included
0
0.2
0.4
0.6
0.8
1
Drug A Drug B Drug C Drug D
Probability of not beingcovered
Probability of SA review
Probability of being fullycovered
SA = Special Authorization or prior auth
Interprovincial variations in coverage
Drug A Drug B Drug C Drug DBC SA Not a
benefitFull benefit
Not a benefit
AB SA Not a benefit
Not a benefit
SA
ON SA Not a benefit
Full benefit
Not a benefit
QC SA Not a benefit
Full benefit
Not a benefit
SA = Special Authorization or prior auth.
Same 4 drugs on provincial plans
Summary
• A complex mix, both public and private • Not just about high-cost drugs, although
highest-cost claimants are probably consuming both high-cost and routine drugs
• Copayments, formularies, income levels all affect benefit eligibility
• Can pooling deal with these complexities?