Cost-effective health insurance protection
The industry pays out 86% of health insurance premiums
as benefits to policyholders (this includes funds set aside
for future benefits on disability and other longer-term
contracts), 8% for operating costs and 3% in federal and
provincial taxes. The remaining 3% is the average profit
margin.
Specialty drugs
The development of specialized drugs has also led to
a steep rise in drug costs. These specialty drugs, while
making up 2% of the total number of claims, accounted
for 30% of prescription drug costs in 2016, and the costs
are expected to rise further in future years.
13
2016 health
benefits
$32.5B
Ext. health 75%
Disability 21%
Other 4%
Benefits by coverage type
$11.0B
Drugs
$7.9B
Dental
$3.0B
Paramedical*
& vision
Ext. health
$1.8B
Hospital
$0.8B
Travel
*Refers to services and professions, such as
physiotherapy, that supplement and support
medical treatment
86% of premiums
paid out as benefits
(5-year average)
The cost of specialty drugs is anticipated
to
reach 40% of prescription drug costs
by 2022*
22% 30% 40%
2012 2016 2022
(estimated)
*Source: Drug Trend Report,
Express Scripts Canada
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