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Actuarial Science
Actuarial Science 2427A/B
Kopp/ Davies

Module3/4 11/7/2012 12:30:00 PM The Problem of Poor Health  Can be split into 3 categories : o poor health – medical needs (doctors, hospitals) o poor health – disability o poor health among the elderly – long term care Poor Health Medical Needs  If an individual gets sick or needs medical treatment, they will need to get: o Hospitalization o Treatment o Drugs o Other non medical needs  To meet these medical needs, an individual needs money and access to services o Without proper insurance protection, cost must come from individual, could lead to financial insecurity  Attacking issue: o Individual, employer, government Individual Plans  Can purchase individual health insurance policies – can cover: hospital, drugs, medical supplies, doctors  Who buys these plans: Americans. However they do have 2 social/government health plans: MEDICARE (health coverage 65+) AND MEDICAID (coverage to the poor)  Rest of Americans need to have employer sponsored plan, individual health plan  Self employed, part time workers, people not eligible, students not covered by parents insurance, people travelling Government Plans (Canada)  Canadian gets medical care through their province, increasing costs, and falling benefits are leading to problems. (cut benefits)  Federal government used to split costs 50/50, in the 80’s changed to giving each province a fund (about 23% covered by government now)  Problems: waiting time, unavailable facilities. Canadian do have a higher life expectancy than America Criteria for Provincial Health Plans: Provinces must follow  Plan must be comprehensive (must cover, all necessary hospital and physician services, with no exclusions or dollar limits)  Plan must be universally available on equal terms and conditions  Plan is portable across provinces.  plans on a non-profit basis administered by a public agency accountable to the provincial government  Accessibility – everyone must have access to services with any financial impediments How do privinces pay for their health costs?  Some provinces charge their residents a premium , some use payroll tax on employers, and use the pot of money  3 provinces charge a premium to resident (BC, Alberta, Ontario).  Assess a payroll tax on employer – 4, including Ontario again  Remaining pay out of general tax revenue Scope of Coverage  Hospital Services – all provinces cover all required hospitalization to the ward level rates, covers all required expenses related to hospital stay, no limit on length of stay  Does not cover private duty nursing, private rooms, ambulance services (some)  Provincial provinces used to be able to charge user fees, but Canada health act abolished them, can charge a user fee if you are a permanent resident in a hospital Employer Plans Hospital, Medical, Drug, Dental and Vision Care Plans  Important part of the employee benefit program (RPP, Disability insurance etc)  Health plans are the most valued employer plan  Private health plans were originally based on the conceot that protection was need by employees in the event of o Catastrophic illnesses, or accident  Today plans cover almost everything o Because evolution of employer plans to attract employees Challenge of today for employer health plans  With cutbacks to provincial health plans, these private plans are taking the toll, plus there is more expensive drugs everyyear  Employers are faced with the challenge to establish a balance between cost management and quality of care Features of employer health plans 
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