Since March 12, personal care claims have been in freefall. Starting from the April invoice, many insurers have credited their group insurance clients proportionately with the plunge in these types of claims.
The same scenario happened in May, but claims may rise in June, as personal care activities resume. They include private healthcare businesses and body and beauty care, including dental care, psychology, optometry, physiotherapy, osteopathy, etc.
Many think it was about time. The quarantine closed down dental and vision clinics, and many therapeutic care sectors, in mere days. In response to this sudden shift, most insurers announced credits ranging from 50% to 80% of group insurance premiums allotted to dental care. Many insurers also credited premiums for eye care and extended care, generally by 20%.
The first credits appeared on the group insurance invoice during the period of April 1-30. For example, Canada Life credited 50% of the group insurance premium allotted for dental care and 20% of the premium for eye care and extended care during this period.
Until further notice
“The scope of these credits is proportionate with the plunge in our claims. It reflects the impact that we have been seeing since the start of social distancing in mid-March.” - Marie-Pierre Tremblay
Marie-Pierre Tremblay, Senior Manager, Market Development at Canada Life, told the Insurance Portal that the insurer will offer a credit at the end of each month in which the insurer observes a consistent downward trend.
For now, it is hard to say whether the trend will persist, she says. “The scope of these credits is proportionate with the plunge in our claims. It reflects the impact that we have been seeing since the start of social distancing in mid-March. It is an exceptional, fast-changing situation. These impacts vary greatly week to week from one region to another, and depending on the business insured,” Tremblay points out.
Dentists: bottleneck anticipated
Why are rebates lower for care other than dental? Other areas were less of a challenge, Tremblay explains. Psychologists, for example, could provide virtual care through service platforms like Microsoft Teams. “Plan participants can choose to continue treatment with a psychologist using these services,” she says.
Telemedicine is another alternative. “We don’t have statistics yet for this, but we know that telemedicine is valued highly during this social distancing period. More than 200 of our clients have this service that we offer via Dialogue, which includes access to virtual mental health services.”
Mario Albert, executive Vice-President – Group Insurance at La Capitale, mentions that the premium reduction offered in dental care is even lower than the drop in claims observed because La Capitale wanted to give itself a margin. The insurer offered a dental care premium reduction of 60% in May and June for SMEs offering this guarantee.
“We expect claims to rebound after dentists reopen,” Albert says. He thinks claims for cavity or root canal treatment were only delayed, not cancelled, in contrast with exams or cleanings.
AGA Financial Group CEO Martin Papillon watched dental and paramedical care claims plummet. “Claims stopped coming in for this care since mid-March,” he says, adding that plan promoters are saving money these days.
Like Albert, he agrees that dentists will have to catch up after lockdown, unlike paramedical care providers. “I’m not convinced that paramedical care practitioners can catch up. I would be surprised if a participant who had made a dentist appointment on April 15 wouldn’t go to it, but insured just postpone paramedical care. They will reach the $300 coverage limit in October instead of July. This won’t incur a real cost for plans,” he points out.
Drugs less affected
La Capitale decided to credit only the dental premium. Mario Albert declined to lower the extended care premium because that premium is combined with that of drug and travel insurance, two sectors hit hard by claims.
“In the case of drugs, there wasn’t a sharp rise in the number of claims. Yet we saw a slight increase in the average claim cost, notably due to a rise in pharmacists’ fees.” - Mario Albert
“In the case of drugs, there wasn’t a sharp rise in the number of claims. Yet we saw a slight increase in the average claim cost, notably due to a rise in pharmacists’ fees resulting from the government guideline that limited prescription renewals to 30 days to avoid the risk of a shortage,” Albert explains. “In travel insurance there were many more claims than usual for the trip cancellation guarantee,” he adds.
Marie-Pierre Tremblay, of Canada Life, reports that drug insurance claims in group plans have remained stable despite the pandemic. She noticed a slight rise in disability insurance claims. “We don’t have statistics or information yet as to whether this increase is related to COVID-19,” she says.
Pharmacy benefit managers are reporting the same trend. Nancy Tibbo of Express Scripts Canada is monitoring the situation and will update Insurance Portal in June or July. “For now, our experience is the same: the trend for dental care claims and one-time care is lower. Drug insurance claims have remained stable,” she says.
TELUS Health and Payment solutions President Luc Vilandré says that he has seen a slight dip in drug claims starting in the week of April 13. He pins this decline on the plunge in the number of visits to medical clinics. TELUS measures this situation every day, via its network of 26,000 physicians in Canada. “We have made virtual health services available to these doctors. Undoubtedly telemedicine is benefitting from distancing by drawing additional users. In some provinces, clinics told us that they have received half of the usual number of visits,” Vilandré explains. “People are waiting before getting treatment for a minor health problem. This slump will affect the number of weekly consultations, and in turn the number of prescriptions issued.”
Drugs with fewer claims include antibiotics other medication taken to treat one-time health problems, Luc Vilandré explains. He has not measured the direct impact of the 30-day guideline on the number of prescriptions issued.
Martin Papillon notes that patients who had gotten used to 90-day prescriptions had to go to the pharmacy three times more often, or have their drugs delivered. “Drug consumption should be the same on an annual cycle, but the 30-day guideline will cause drug prices to edge upward over the year because there will be no discount on pharmacists’ fees for longer prescriptions,” he explains.
The slight dip observed in drugs for one-time treatments is not mirrored in maintenance drugs, Luc Vilandré adds. “A person with diabetes will not stop taking their drugs just because of COVID-19,” he says. Chronic diseases remain a concern in plans.
From 100% to 0% in 5 days
The pandemic has had a mitigated effect on drug insurance claims, but a more striking impact on extended care. “It is hitting the hardest mainly in dental care and extended care, he says. “We saw a really huge drop in claims volume in these two sectors.”
TELUS’ clinics and network are suffering as a result. Business was nearly obliterated since the start of lockdown, Vilandré adds.
Among the networks supported by TELUS Health, Medisys saw a dramatic plunge in activities at its clinics that specialize in executive health services. “One example is the annual health workup for managers. We saw a drastic decrease day after day, through the whole sequence of activities. We went from 100% capacity to 70%, then 30% and almost 0 in five days,” he says.
