Key changes to Alberta’s health care system will have a major impact on provincial insurers.
The passage of Bill 11 - Health Statutes Amendment Act, 2025 (No.2), which received Royal Assent in December 2025, introduces key changes to the Alberta Health Care Insurance Act, affecting the coordination of drug coverage between public and private plans, protecting older Albertans still in the workforce, and providing additional flexibility to physicians regarding the public and private health services they can offer.
One of the major changes is the Alberta government’s plan to improve the coordination of drug coverage between public and private plans. The government’s website says this will ensure “that private plans are fully utilized while preserving public coverage for those who need it most,” and shift the provincial government’s role to that of “payor of last resort.”
The Provincial Seniors Drug Plan and Non-Group Alberta Blue Cross will be the payors of last resort for drug coverage, as more costs shift to private plan coverage, says Barry Hutchins, a senior group insurance consultant with AGA Benefit Solutions in Calgary.
“From a taxpayer's perspective, the change is understandable,” says Mary Kelly, a professor of finance and the chair in insurance at Wilfrid Laurier University’s Lazaridis School of Business and Economics in Waterloo, Ont. “If an individual remains actively employed and has access to employer-sponsored coverage, there is a reasonable argument that the private plan should be utilized before public programs.”
Protecting working seniors
Bill 11 recognizes that many people continue working beyond traditional retirement age and helps ensure that active employees are not treated differently with respect to health and drug benefits solely because of age, says Kelly.
Historically, some employer-sponsored plans contained different provisions for employees over age 65 because those employees also had access to provincial drug and health programs, says Kelly.
Under Bill 11, to the extent that active employees over age 65 continue to receive workplace health and drug benefits and private plans become the primary payer, some costs that would otherwise have been borne by public programs will instead be borne by employers and private insurance plans, Kelly adds.
Martin Halek, an associate professor of risk management and insurance at the University of Calgary’s Haskayne School of Business, says that whether employers choose to continue providing health coverage in accordance with Bill 11, which is completely optional under the law, “is a big question mark.”
That also raises further questions. For example, he elaborates, if employers choose to retain their company health plans, will that result in higher premiums for employees? There is also the question of what employers will do with the additional costs associated with having to pay for older employees, rather than relying on the public health system.
“Do we think [employers are] just going to incur [those extra costs] and move on? No, of course not. They must cover them somehow. So, will that be [a] reduction in employees’ salary and wages? Will it be a reduction in other benefits? Will it be a reduction of the number of employees, because costs are higher?
“So that’s an intriguing challenge to see how employers react,” says Halek.
This could also present a “tremendous growth opportunity” for the health insurance industry in terms of offering new products to sell, along with the challenge of determining rates and premiums for coverage that the market will bear, says Halek.
The beneficiaries of Bill 11, says Halek, will ultimately be those who, after these changes have been settled, have access to affordable private coverage through either their employer or an individual policy.
“The people who might be disadvantaged are those that cannot afford this type of coverage, and they’re kind of left in the public pool, so to speak,” says Halek. “Is that a concern? Well, it could be, depending on what type of medically necessary treatment that person is facing.”
Two-tier health care?
Bill 11 provides provincial physicians with more practice flexibility regarding how they elect to participate in Alberta’s publicly funded Alberta Health Care Insurance Plan.
This modification to the rules of how some physicians can participate in Alberta’s publicly funded insurance plan, thereby “allowing them to toggle between the publicly funded and privately funded sectors,” is another major change introduced by Bill 11, says Hutchins.
Some physicians in Alberta, mainly surgeons for now, will be able to work concurrently in both the public system, while also being able to offer privately funded procedures. Some details are still being finalized, such as physician participation rules and safeguards to protect residents of Alberta and the public system, so the full impact of this change has yet to be determined, he explains.
For their part, Alberta residents will have greater flexibility to choose between publicly or privately funded procedures, mainly with respect to orthopedic surgeries such as hip and knee replacements, says Hutchins.
“The province’s argument is that this will reduce surgical wait times, but many disagree, saying that it will reduce physician availability in the public sector. This may lead to potentially increased wait times for those who cannot afford to pay out of pocket,” he adds.
Another concern is that Bill 11 could also lead to greater pressure for employers to include coverage for privately funded procedures in their benefit plans – costs that are presently paid for by the province, says Hutchins.
The key question, says Kelly, is whether allowing greater private financing of health care will increase capacity in the provincial health care system.
For example, she elaborates, assume a surgeon that currently does 1,000 procedures a year under the public system will, with greater access to the private system elect to do another 200 procedures annually.
If the surgeon continues to do 1,000 procedures under the public system, and adds another 200 privately funded procedures, for a total of 1,200 procedures annually, that will increase capacity in the provincial health care system, says Kelly.
“The legislation permits physicians to decide on a case-by-case basis whether to provide a service through the public plan or as a privately paid service. The government does retain authority to impose restrictions, if necessary, to ensure adequate access to insured services, but the legislation itself does not establish minimum public-service quotas,” she explains.
“As a result, the impact on capacity will depend heavily on how physicians respond to the new framework and how any future safeguards are implemented,” adds Kelly.
The changes under Bill 11 are “a step towards a two-tier health system,” says Halek.
Just by its design Alberta healthcare consumers are being given a choice of how they want to access medical care – both necessary and voluntary, which has the potential to become two tiered. “Whether it's wait times, whether its choice of doctors, those people with the ability to pay either out of their own pocket or through their employer will have an opportunity to jump from one tier to the other,” he elaborates.
Hutchins notes that many critics of this new legislation believe the increased physician flexibility to choose to work in both the public and private sectors could be considered the first step towards a two-tier health system in Alberta.
That is “because those who can afford to pay will be able to jump the queue, thus leading some detractors to believe it will undermine our universal health care system,” he says.
