Private plan costs went higher in 2019, says TELUS

Change to major provincial medication plan among several factors that contributed to rise in eligible monthly cost

Private plan costs went higher in 2019, says TELUS

After seeing a 3.6% decline in 2018, private drug plans in Canada saw eligible monthly cost across all individuals rise by 7.6%, according to a new report from TELUS Health.

“Overall eligible costs saw their biggest increase in the past five years, for multiple reasons,” said the 2020 Telus Health Drug Data Trends & National Benchmarks report.

While a regional breakdown revealed notable increases across all regions, Ontario was revealed as an outlier due to the province’s discontinuation of its OHIP+ program for insureds below the age of 25 in April 2019.

But even after discounting all insureds under 25 from the analysis, other factors caused a 5.1% rise in eligible costs for 2019, in contrast to a dip of 0.8% in 2018. Stripping away the effects of that event in Ontario also showed that the eligible costs for private drug plans in the province were still found to have risen by 5.4% last year, compared to the 2.4% decline in 2018.

“Quebec is also at the forefront, with a 5.8% increase across all age groups, compared to an increase of 3% in 2018,” the report said.

While the under-25 cohort showed the biggest jump in costs last year, it also showed the lowest average eligible cost per insured at $14.44. The highest numbers were found among insureds between 60 and 64, for whom the average eligible cost was $98.60.

“[A]s we age, we see chronic conditions becoming more prevalent, and it’s not uncommon to see someone in their 50s or 60s on several medications,” said Shawn O’Brien, Principal, Data Enablement and Drug, Health, Dental Product Roadmap for TELUS Health.

Teasing apart the data by drug type showed an outsized rise in average eligible monthly costs for specialty drugs (10.1%) for insureds aged 25 to 64 last year. The rise in monthly costs for specialty drugs stemmed from 2.1% growth in average cost per claim, coupled with a much greater 7.8% acceleration in utilization that’s partly due to the entry of new specialty drugs into the Canadian market.

Focusing on non-specialty drugs, the report found that eligible costs have been on a 10-year trend of decline due to legislated price reductions on generics and a confluence of patent expirations. But that trend was bucked last year, when eligible monthly costs rose by 2.1%.

The report also noted that among insured Canadians under the age of 29, eligible claims costs last year saw double-digit increases, including an 11.6% surge among those aged 25 to 29. “We are seeing more mental health-related claims, as well as clams for attention deficit hyperactivity disorder in this cohort,” said Jason Kennedy, director, Health Business Consulting at TELUS health.

While Kennedy said the cost trend reflects a growing awareness of mental health issues, the relative high prevalence of mental illness across all age groups also represents a growing call to action.

“Employers, insurers, and associations are starting to fully embrace the need for wellness programs that concentrate on the emotional and mental health and wellbeing of their employees,” he said.