Group plan members want colleagues with unhealthy habits to pay more

par Alain Thériault | March 18 2006 08:43PM

Plan participants are rising up against unhealthy lifestyles. The majority of them agree that people that flirt with health risks should pay more for their group insurance.

That was one of the findings of the eighth annual Sanofi-Aventis Health Care Survey that polled 1500 Canadians who participate in employer-sponsored group health benefits plans.

Sanofi-Aventis, a pharmaceutical giant whose Canadian headquarters are in Laval, Quebec, unveiled the survey results in November at a group insurance seminar organized by an association for Quebec employee benefits consultants, the Regroupement des consultants en avantages sociaux du Québec (RCASQ).

The survey found that 54% of respondents agreed that employees who smoke, do not exercise, or are obese, should pay more than other participants in group insurance health care plans.

The respondents believe that “employees should pay less for employee health coverage if they do not smoke, live a healthy lifestyle, take medications exactly as prescribed or exercise regularly,” the survey results reveal.

In fact, 70% of participants in the Sanofi-Aventis survey believe that non-smokers should pay a lower premium for their group health insurance plan. People with a healthier lifestyle should also pay less, say 60% of the survey respondents. In addition, 58% show the same bias in favour of insured that follow their physician’s recommendations by taking drugs to treat hypertension or cholesterol.

Also, 46% of respondents would willingly grant a premium reduction to participants who are not obese.

When he discussed the survey results, head of government and stakeholder relations for Quebec at Sanofi-Aventis, Patrick Bergeron, underlined the worrisome escalation of certain societal issues in Canada, obesity for one.

In his presentation, Mr. Bergeron slipped in a sobering fact published by the Canadian Institute for Health Information in 2004: overweight and obesity affect nearly half of adults and about 35% of children in Canada.

RCASQ president Jean Fiola understands the survey respondents’ palpable exasperation about mounting health care costs. But the survey also reveals the mass confusion in this area: survey respondents seem to be confusing group insurance and individual insurance.

The price of individual insurance is based on the risk represented by a particular insured. In group insurance, in contrast, all insured pay the same price for each component of the program offered by the employer. For example, life insurance will be offered at the same rate for each employee, regardless of health status, age or gender. The same principle applies to disability or medical components of the program.

Mr. Fiola disapproves of any change that smacks of intervention in people’s private lives. “Should someone who smokes and who is not sick be penalized? Should someone who is overweight be forced to exercise?”
René Hamel, senior vice-president, group insurance, at SSQ Life, highlighted a Canada-wide phenomenon: “a la carte personalization of group insurance.” This survey is just one manifestation, he explained.

Mr. Hamel is opposed to this trend, which he sees as breaching the fundamental principles of group insurance. “Group insurance can exist only if there is a group ready to share a risk collectively: an employer and its employees, for example.”

Personalizing group insurance increases segregation, he added, which means that fewer people will have access to the insurance they need.

User pay system

Group plan participants are also ready to shoulder many more responsibilities.

Of the survey participants, “73% feel an obligation to help their employer rein in costs, while 72% said that they usually consider the costs of a product or service before they use it,” said Mr. Bergeron of Sanofi-Aventis when he presented the survey findings.

As for how to help employers control costs, 45% of the survey respondents would agree to pay more for the “health care” portion of the plan.

In addition, one third of these respondents say they are willing to pay a larger proportion of each type of care that they use, which amounts to increasing their share of coinsurance.

Mr. Hamel of SSQ Life would rather see changes to the deductible rather than the coinsurance. “For 25 years the deductible has stagnated at $25 in group insurance plans. It should be set at $250,” he says.

Mr. Fiola of the RCASQ believes the survey finding that 45% of insured are ready to pay more seems high. “This proportion largely exceeds what I have been seeing in my day-to-day practice. When I announce a group insurance premium hike of 15% to 20% to an employer, the employees are not thrilled to be paying more!”

To absorb increases, Mr. Fiola recommends increased employer participation, possibly by increasing cost sharing with employees from 50% to 75%. “For the employer, the group insurance premium is a tax-deductible expense. Employees, in contrast, pay for the coverage out of their net wages.”

Insured altruistic

A large proportion of the survey respondents were equally altruistic about spreading their contributions across the Canadian health care network.

“Plan members have also indicated a willingness to pay a small fee for visits to the emergency room, the doctor’s office or a day in the hospital as long as the extra money is invested elsewhere in services like home care, community care, nursing home care, costly drugs, mental health counselling or palliative care,” the Sanofi-Aventis publication concludes.

Of the survey respondents, 71% strongly or somewhat agree to a small fee, while 19% disagree. The other 10% say they “somewhat disagree” with this idea.

As to who should absorb the cost of the most expensive drugs, 66% of the respondents said the state. They believe that the government should assume the costs of a drug with an annual cost of $5,000 per person.

This percentage plunges to 52% for drugs that represent an annual expense of $1000. Employers rank second, for 42% of the respondents, when it comes to paying for drugs that annually cost $5,000 and 46% for drugs with a $1,000 annual price tag.