Increases coming across the country due to rise in usage, inflation, says official
Health premiums for the extended health care insurance plan that covers current and retired Yukon government workers will increase by 52.8% by next month, stakeholders confirmed in a CBC report.
Those who are covered by the plan received a notice on March 14, and some stakeholders have expressed shock over the rate of the increase.
Del Young, a former territorial gas inspector who retired in 2013 after a more than 20-year career, also claimed that the notice gave people just over a week to decide whether to accept the increase or permanently pull out of the plan.
A joint management committee administers the plan. They also determine benefits and set premium rates, explained Sandy Silver, minister responsible for the Public Service Commission, in the report.
Premium increases are expected in different parts of Canada, according to the commission official.
“Plan sponsors and insurers are expecting increasing claims right across the country, and this is due to a rise in usage and also inflation,” he said in the CBC report.
"An increase in the overall benefits used, benefit coverage, costs per claim, specific costs associated with high-cost specialty drugs, vision claims, paramedic services, out-of-country expenses, and also insured administration fees" had contributed to the premium going up, he later added.
How much does health insurance cost employers?
The impact of the premium increase was "not lost on us," said the Public Service Commission in Yukon official in the CBC report, with the government expecting to pay $7.6 million more because of it.
Employers expect a sharp increase of 5.2% in the average per-employee cost of employer-sponsored health insurance in 2024, according to a previous Mercer report.
Aon also predicted an increase of 5% in spending for this benefit for this year.
In 2023, employers had to shell out more cash to provide health insurance for workers, according to a separate report from KFF.
Stakeholders’ contrasting comments on Yukon’s health premium increase
For Yukon Association of Education Professionals (YAEP) president Ted Hupé, the increased premium is understandable.
Previously, the plan had accumulated a surplus due to relatively low use, which in turn had helped temper premium increases, he explained in the CBC report.
However, because the number of those who use the benefit surged in recent years, it drained the surplus and increased costs. Hupé attributed the increased usage to both the impacts of the COVID-19 pandemic and baby boomers retiring and needing more health service, according to the report.
"This was a bit of a perfect storm," Hupé said in the CBC report.
"Unless we want to see cuts, what's happening is we're trying to maintain the benefits package as it is and there are increased costs… Based on some of the things that we're facing post-pandemic and demographically, these are the hard choices that the joint management committee had to make."
However, members of the Yukon Employees' Union (YEU) have concerns over the increased premiums, said Justin Lemphers, the union president, in the CBC report. Some members also say that they've been able to find similar health coverage elsewhere at a lower cost.
"It seems to me that perhaps there may have been another option to exercise, and that would be looking at other service providers to determine if there could have been a better option made available to people that rely on these plans," he said.
The increase would mean an additional $600 per year in spending for Young.
“It goes against the cost of living, it goes against just about everything you can do for seniors,” he said.
Premiums have gone up almost every year, but increases have typically been under 10%, said Young.
Overall, in 2021, 67% of Canadians reported taking or being prescribed a medication in the last 12 months, according to a Statistics Canada (StatCan) report. However, racialized groups in Canada are less likely than natural-born citizens to have access to employer-sponsored plans that cover prescription drugs, according to StatCan’s report titled Study: Gaps in prescription insurance coverage, based on data from the Canadian Community Health Survey 2015, 2016 and 2019.