What we can do to contain them in the future
It’s the same story year after year. We are facing yet another hike in group insurance premiums as of April 1, 2023, with no increase in coverage except for a very small administrative increase.
Unfortunately, this has been the case with member-funded group insurance plans for some years now (as opposed to plans funded by private employers). The logic of group insurance is simple: the total amount paid in premiums must be equal to the total amount of claims paid out.
However, once again this year, the claims paid out exceeded the premiums paid. This trend becomes more pronounced every year due to the increased consumption of prescription drugs, the prices of which are set by the pharmaceutical companies. This does not bode well for the future. We are facing a situation in which premium increases are inevitable unless we cut back on what many already see as bare-bones coverage.
There are ways to limit these increases. To learn more about how a group insurance plan works and how to help minimize increases in your contributions, watch the video below (in French).
Premiums effective April 1, 2023
Health insurance
The contract rate for health insurance is up 12%, primarily due to the cost of prescription drug coverage, which alone accounted for 82.7% of all claims under the plan in 2020-2021; that figure increased to 84.57% of the bill in 2021-2022. The cost of new specialty drugs and the rising number of prescriptions are the cause of this unavoidable increase.
That figure increased to 84.57% of the bill in 2021-2022. The cost of new specialty drugs and the rising number of prescriptions are the cause of this unavoidable increase.
Fortunately, a partial premium holiday will be implemented to limit the impact of the increase, which will be partially offset with monies from the government contribution to premium costs negotiated in the 2016-2020 collective agreement. In addition to this partial holiday, the Employer share that was negotiated in the 2020-2023 collective agreement will also be deducted from the contractual amounts.
The financial burden on our members and the underlying reasons for the increase in premiums are sufficient reason for a number of the demands we are making during the provincial contract talks aimed at renewing our collective agreement. We are calling for an increase in the Employer's health insurance contribution and the creation of a universal public prescription drug insurance plan. To learn more about the benefits of such a plan, read our article in BlueAPTS.
Dental insurance
In 2023, insurance premiums will increase by 4.4%.
Last year’s premium increase was higher as dentists attempted to make up lost revenue due to the closing of their offices during the pandemic, but we believe that this game of catch-up is now over. Our assessment is thus based on generally more predictable factors, namely, inflation-related increases and the increase in the number of claims.
Supplemental plan
Results for life insurance and long-term disability insurance (payable after two years of disability) are analyzed for a much longer period since the number of claims is lower than for health insurance.
Data analysis showed a marked increase in claims paid out under these two plans. For life insurance, a 5% increase in premiums, which amounts to an increase of less than $0.20 per pay, is sufficient for the time being.
In the case of long-term disability insurance, we found that a catch-up was needed, as the premium was too low to cover the claims paid out. In fact, the number of long-term disability cases has increased steadily since 2010. The number of people on disability for every 1,000 members has risen from fewer than three in 2010 to five in 2018. In light of this trend, we have to adjust the premium for this plan to ensure that the total premium amount is sufficient to cover the cost of claims. Consequently, an increase of between $4.00 and $10.00 per pay will take effect on April 1.
Since the rates for these plans are based on salary percentages, here are two examples that illustrate the difference in cost of the 2022 premium and the one applicable in 2023.