2009 annual meeting ● assemblée annuelle 2009 halifax, nova scotia ● halifax (nouvelle-...
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Canadian Institute of Actuaries. L’Institut canadien des actuaires. 2009 Annual Meeting ● Assemblée annuelle 2009 Halifax, Nova Scotia ● Halifax (Nouvelle- Écosse ). Ins and Outs of Health Insurance Coverage for Canadians. Dave Burry President Travel Insurance Specialists Ltd. - PowerPoint PPT PresentationTRANSCRIPT
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2009 Annual Meeting ● Assemblée annuelle 2009Halifax, Nova Scotia ● Halifax (Nouvelle-Écosse)
2009 Annual Meeting ● Assemblée annuelle 2009Halifax, Nova Scotia ● Halifax (Nouvelle-Écosse)
Canadian Institute
of Actuaries
Canadian Institute
of Actuaries
L’Institut canadien desactuaires
L’Institut canadien desactuaires
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Ins and Outs of Health Insurance
Coverage for CanadiansDave Burry
PresidentTravel Insurance Specialists Ltd.
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Plan Design Tools
1) Eligibility Criteria (eliminate the poorest risks).
- Red light versus Green light
- Impacts both premiums and claims in different magnitudes(eg. lowers premiums by 1000 but reduces claims by 5000)
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A La Carte Eligibility Requirements1. You must not have: a) ever been diagnosed with congestive heart failure [CHF]; b) had your most recent coronary artery by-pass or
angioplasty surgery before January 1, 1999; c) an aneurysm that has not been surgically repaired; d) had 2 or more of the following: coronary artery by-pass,
coronary angioplasty, stenting, pacemaker insertion or valve replacement; or
e) been advised by any physician not to travel on your trip.2. In the past 24 months you must not have: a) received treatment or taken medication for a terminal
illness; b) required dialysis; or c) been prescribed home oxygen.3. In the past 12 months you must not have been hospitalized for 24 or more consecutive hours for: a) abnormal heart rhythm, high blood pressure, blood
clot(s); b) cardiomyopathy, valvular disease of the heart, valve
replacement, coronary artery disease (including angina), heart attack (myocardial infarction), stroke or mini-stroke [TIA]; or
c) chronic lung condition (including emphysema, chronic bronchitis, chronic asthma or Chronic Obstructive Pulmonary Disease [COPD]).
4. In the past 12 months you must not have: a) been prescribed or taken 5 or more medications (including
nitroglycerine in any form) in total (regardless of whether you used the medications) for one or more of the following conditions:
- stroke or mini-stroke [TIA] (transient ischemic attack); - abnormal heart rhythm, high blood pressure, blood
clot(s); - cardiomyopathy, valvular disease of the heart, valve
replacement, coronary artery disease (including angina), heart attack (myocardial infarction);
- diabetes; - diverticulitis, Crohn's disease, ulcerative colitis, chronic
constipation, Irritable Bowel Syndrome [IBS], or any other
chronic bowel disorder; - kidney (or renal) failure; - liver disorder, pancreatitis; or - chronic lung condition (including emphysema, chronic
bronchitis, chronic asthma or Chronic Obstructive Pulmonary Disease [COPD]);
b) had a coronary angioplasty procedure or stenting; c) received treatment for metastatic cancer; or d) had surgery for a heart, lung or gastrointestinal condition
refused or postponed by you or any physician.
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Plan Design Tools (cont’d)2) Plan Selection
- price poorer risks at higher levels (i.e. match expected claim pattern with the premium needed to cover the risk)
- use plan selection criteria that “pushes” sicker people into higher priced plans
- how many plans do you need?
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A La Carte Underwriting QuestionsA. Have you used tobacco products at any time in the last 12 months?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 points
B. Was your last complete medical examination by a physician more than 18 months ago? . . . . . . . . . . . . . . . . . . . . . . .25 points
C. In the last 6 months have you been prescribed or taken any medication for, or as the result of: coronary, vascular or carotid artery surgery, heart attack (myocardial infarction), coronary artery disease (including angina), cardiomyopathy, blood clot(s), pericarditis, abnormal heart rhythm? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 points
D. Do you have high blood pressure requiring medication and, in addition, do you have diabetes (including diet
controlled)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 points
E. In the last 12 months, have you:
1) been prescribed or taken cholesterol medication? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 points
2) been prescribed or taken Coumadin (Warfarin)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 points
3) been prescribed or taken, for 30 or more consecutive days, Prednisone (or equivalent steroid medication) in pill form or Lasix (Novo-Semide/Furosemide)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 points
4) had cancer requiring surgery, chemotherapy, radiation and/or laser therapy (excluding removal of skin lesions)?. . 35 points
5) been prescribed or taken medication for anxiety? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 points
6) received treatment for urinary tract infection [UTI], urinary retention, kidney stones, gallstones or pancreatitis? . . . 15 points
7) had an episode of pneumonia? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 points
8) been prescribed or taken 3 or more medications for high blood pressure (hypertension)? . . . . . . . . . . . . . . . . . . . . 30 points
9) been prescribed or taken 2 or more medications (including inhalers) for a chronic lung condition (including
emphysema, chronic bronchitis, chronic asthma or Chronic Obstructive Pulmonary Disease [COPD])? . . . . . . . . . 30 points
10) been prescribed or taken medication for dementia (including Alzheimer’s Disease)? . . . . . . . . . . . . . . . . . . . . . . . . 40 points
11) had a blood transfusion for anemia? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 points
12) received treatment for syncope or fainting? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 points
13) had a gastrointestinal bleed? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 points
F. In the last 24 months, have you:
1) been diagnosed with a stroke or mini-stroke [TIA]? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 points
2) been diagnosed with, received treatment for or taken medication for any chronic bowel condition (including
ulcerative colitis, Crohn’s disease, chronic constipation, diverticulitis or Irritable Bowel Syndrome [IBS])? . . . . . . . . 50 points
3) had a bowel obstruction or bowel surgery? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 points
G. Do you have peripheral vascular disease [PVD] (excluding varicose veins and venous stasis)? . . . . . . . . . . . . . . . . . . .40 points
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Plan Design Tools (cont’d)
3) Rate Table Construction
- how many age bands (What is maximum age?)
- higher daily rate by length of trip(Why?)
- Single trip versus Annual Multi-Trip
- Top-ups (good or bad?)
Travel Insurance Specialists Ltd.
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Plan Design Tools (cont’d)
4) Wording for the Policy
- Pre-existing condition coverage Length of period Buy down to a lower period Medication changes Impact of using “treated” versus “stable”
- Requirement for notification Must call assistance company within 24 hours
of seeking care (why, how and what happens if not compliant?)
Travel Insurance Specialists Ltd.
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Does the insured understand the importance of the
“24 hour rule”. . .
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ClaimsWhat is so important?
- can they be stopped
- how to mitigate
- payment methods
- managing is the key
- reserving is important too
Travel Insurance Specialists Ltd.
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Travel Insurance Specialists Ltd.
Claims1. What happens when the answers are
not accurate?
2. How do you find out?
3. Costs incurred – can they be recovered?
4. Results – deny claim?
– void policy?
– return premium?
– pay only part of the claim?
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…claim denied?…policy void?
… return of premium?
What happens when the answers on the application are not accurate? . . .
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Travel Insurance Specialists Ltd.
How to Fix the Loss Ratio?- reduce who you sell to by eliminating
the poor risks. (easier said than done)
- reduce costs (someone should be willing to work for less!)
- make it up with volume (If you believe this, I have some “undervalued” stocks and real estate to speak with you about).
- much better to reduce claims than to increase premiums.
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…eliminate the poor risks…
Fixing the loss ratio…
…reduce costs…
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Example1. Premium Expenses Claims
100% 0% 105% Solution 1: Increase premiums by 5% Solution 2: Decrease claims by 5%
2. Premium Expenses Claims 100% 30% 75% Solution 1: Increase premiums by 7.1% Solution 2: Decrease claims by 5%
3. Premium Expenses Claims 100% 50% 55% Solution 1: Increase premiums by 10% Solution 2: Decrease claims by 5%
Travel Insurance Specialists Ltd.
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…other strategies…
…not quite as successful…
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Travel Insurance Specialists Ltd.
Marketplace Differences CANADA TOPIC U.S.A__
Not an issue. . . . . . . . . . . Filing . . . . . . . . . . State by state
Marketplace. . . . . . . . . . .Rates . . . . Technical justification
Marketplace . . . . . . . . . .Benefits . . . . . . . . . . . . Mandated
Scrutinized . . . . . . . . . .Marketing . . . . . . . . . . . .Monitored
Mostly fee for service . . . .Legal . . . . . . . . .Contingent fees
Rarely awarded . . . . . . Damages . . . . . . . . . . . . . . Liberal
Guidelines . . . . . . .Marketing Material . . . . . . . . . . . Filing
Rely on Contract . . . . . . Courts . . . . . . . Consumer friendly
1/10 of U.S. . . . . . . . . . . .Size . .10 times larger than Canada
Licensing
Province . . . . . . . . . . . . .Agents . . . . . . . . . . . . . . . . State
National . . . . . . . . . . . . Carriers . . . . . State (OFC coming?)
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Marketplace Differences – Claims Canada• Coverage is for “Emergency Only”• Elective treatment excluded• Claims management is more aggressive• Claims are re-priced with savings of 25-75%• Air ambulance used to repatriate to Canada
U.S.A.• Regulated coverage for most benefits (mandated)• Claim management highly regulated (bad faith)• Re-pricing used where possible• Prompt payment required
Travel Insurance Specialists Ltd.
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Travel Insurance Specialists Ltd.
Premium Differences Example: Age 73, travelling 180 days
Plan 1 (best price) 1123
Plan 2 1210 (+8%)
Plan 3 1814 (+50%)
Plan 4 2891 (+60%)
Plan 5 (worst price) 4044 (+40%)
make it up with volume (I have some “undervalued” stocks and real estate to speak with you about).
much better to reduce claims than to increase premiums.
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…will put you ahead of the competition!
• Good plan design• Proper claims management
• Fixing your loss ratio
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Thank you.
Any questions?
Dave BurryPresident
Travel Insurance Specialists Ltd.