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Quebec private health care law won't change most benefit plans


MONTREAL--Although Quebec is implementing a law that allows specific health care procedures to be covered by private insurance plans, employers have not shown any interest in adding to the costs of their health plans.

Plan sponsors in Canada are trying to control the rising costs of providing health care benefits and do not want to add to those expenses by paying for health care services already provided by the government. A few employers, though, are paying for private health care as part of their return-to-work programs, according to a consultant.

The law--known as Bill 33--allows specified private medical facilities to perform hip and knee replacements and cataract surgery, even though these services are included in the publicly funded health care system, because of long waiting times at public facilities.

Under the law, insurers and sponsors of employee benefit plans are permitted to enter into insurance contracts to cover those specific services.

"Bill 33 opens the door to private insurance for a limited number of services," said Lucie Paquet, senior benefits consultant for Hewitt Associates Inc. in Montreal.

The law was drafted last summer and passed last December in response to a 2005 ruling by Canada's Supreme Court in Chaoulli vs. Quebec (Attorney General) that Quebec's ban on private insurance for health care services already provided by the province is unconstitutional (BI, June 20, 2005).

The Quebec government drafted Bill 33 to comply with the requirements of that ruling "in the most narrow way that it could have," said Megan Evans, a Toronto-based partner in the health law practice group of Cassels Brock & Blackwell L.L.P. "They're doing as much as they can to preserve the publicly funded system."

Employers have shown little if any interest in paying for private insurance for the three procedures and so far have faced little pressure from employees to do so, said Michele Boisvert, practice leader, group and health care for eastern Canada for Watson Wyatt Worldwide in Montreal. "Plan sponsors are not looking to take on any extra costs."

Indeed, the recent trend among Canadian employers has been to curtail benefits spending, as demonstrated by recent announcements that Toronto-based Sears Canada Inc. and Montreal-based Bell Canada Inc. will eventually eliminate retiree health care benefits, Ms. Paquet said (BI, Feb. 19).

"Employers are really being cautious about adding to that number and I think that's why they are reluctant to cover something that is already covered by the government," she said.

Plan sponsors interested in covering the services via private insurance need to ensure they perform accurate financial calculations of the potential costs that include the surgery itself as well as additional care the employee may need, Ms. Evans said.

A small number of plan sponsors have begun paying for private health care for employees on disability leave in an effort to reduce costs by more quickly returning injured employees to their jobs, Ms. Boisvert said.

None of Hewitt's clients has taken that step, but Ms. Paquet said she expects some employers eventually will fund care for injured workers.

While the law allows developing private insurance to cover the services, insurers have shown little interest in offering coverage because the scope of procedures is so narrow and the coverage would have to include all costs related to the procedures, consultants say.

The insurers' "view is that there won't be a market for this type of insurance," Ms. Boisvert said. "Insurance companies are saying it's not going to be viable."

While some insurers may attempt to develop products to cover the procedures, the Canadian Life and Health Insurance Assn. does not believe that insurance companies could create profitable products because the scope of applicable procedures is limited, creating an anti-selection issue, a Montreal-based spokeswoman said. "It's not insurance," she said. "There's no risk."

Another consideration for insurers and plan sponsors offering private coverage is the threat of fines--$100,000 Canadian ($88,967) for the first violation and up to $200,000 Canadian ($177,936) for a second violation--for private insurance paying for procedures other than hip and knee replacements and cataract surgery.

"I don't think that's much of an issue because (employers are) not looking at covering these services," Ms. Paquet said. "If they are looking at covering more services, they have to be concerned about those fines."

The law allows adding other medical procedures to the list of treatments that could be covered by insurers with government approval, but this is a "more onerous" process than implementing regulations, Ms. Evans said.

The CLHIA believes more procedures will eventually be added to the list. "It's probably going to evolve, but it's not going to start tomorrow or next year," the spokeswoman said.

Bill 33 also requires health care facilities to provide statistical information to the government on wait times for health care procedures. By addressing the wait-time issue, the government aims to stem the need for private health care. "If they reduce waiting times for those services, there is no need to get insurance for those services after all," Ms. Boisvert said.

Quebec's Health Plan

Bill 33, which lawmakers in Quebec passed last December, allows a limited private health care and private insurance regime while preserving the publicly funded health care system by:

  • Allowing specified private medical facilities to perform hip and knee replacements and cataract surgery.

  • Allowing insurers and sponsors of employee benefit plans to enter into insurance contracts to cover these specific services.

  • Imposing fines on insurers and plan sponsors that provide insurance for services not covered by the legislation.

    Source: Quebec National Assembly