Canada Health and Medical Insurance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Canada Health and Medical Insurance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Canadian health insurance market is expected to register an effective CAGR of 7.5% over the forecast period (2019-2024). It had been valued at USD 41 billion in 2017. However, it is facing challenges in terms of the delivery of health services in the rightful time, due to certain operational discrepancies.

While Medicare provides all the required health services free of cost to all the residents, and some of the employers offer private supplemental health insurance as a benefit cover to attract quality employees. Each province holds responsibility to raise the revenue, plan, regulate, and ensure the rightful delivery of the healthcare services, although the federal government regulates certain aspects of prescription drugs, and subsidizes the provinces coverage of services to vulnerable populations.

Public private partnerships in the health system delivery.

Drivers

Key Highlights

• Growing geriatric population.
• Rising income and preference for better health benefits, to meet emergency health needs.
• Increasing medical care costs across different healthcare services offered.

Restraints

Key Highlights

• Lack of awareness of the policy changes or the appropriate health plan details.
• Lack of knowledge to choose the rightful provider.
• Stronger competitor activity pressurizing the consumer health spending habits.

Key Market TrendsPrivate Health Insurance in Canada and Its Implications on the Health Coverage

Private health spending in Canada accounted to about 31% of the total health spending (includes private insurance, OOPs and others) in Canada, in 2018. In 2018, about 25 million Canadians had supplementary health insurance to achieve their health security needs. About 12% of the total health expenditure, in 2018, was derived from private insurance. Employment-based supplementary health insurance is the status quo among large employers and covers services, such as optometry, dental, and extended prescription drug coverage. In Canada, majority of the population is publicly financed, while the private healthcare delivery is achieved through 10 provincial and two territorial health insurance schemes. Three provinces, namely, British Colombia, Alberta, and Ontario, remain the core for Medicare services with the receival of the national health premiums.

Prior to 1940, the healthcare was essentially financed privately. However, with the advent of the 1984 act on Medicare and its principles, public had wide scope to receive a lot health benefits. Canada’s national public health insurance is characterized by local control, doctor autonomy, and consumer choice, i.e., patients can choose for themselves which physician and hospital to attend to receive services within their province. Healthcare providers are mostly private funded by public monies via provincial budgets. Hospitals are largely privately owned not for profit organizations who receive an annual global operating budgets from the provinces. Physicians practice privately, with their remunerations on fee for service basis received through the provincial health plans.

Spotlight on the Popular Channels Used to Distribute Health Insurance in Canada

Canada is home to more than 130 health insurers serving the healthcare needs of its people. Group sales through the medium- and large-sized employers is the dominant channel of distribution in health insurance, which is best utilized by the Canadian population. Together with the traditional career agent or exclusive sales force, health insurers may as well use any combination of independent agents, Managing General Agencies (MGAs), and national accounts, to distribute their products. Each of these channels is further divided into sub-categories. So independent agents may be either individuals working on their own or Personal Producing Groups of Agents (PPGAs), MGAs include Associate General Agencies, and national accounts include both IIROC dealers and MFDA dealers.

• MGA’s: Managing General Agencies – This is supposedly the largest channel of distribution for life, as well as health insurance in Canada, which contributes about 30% of all the new premiums. The MGA channel utilizes a wide variety of business models large, national organizations to small, local operations. Though there is no clear and consistent description of how the channel operates, there is no evidence of any systemic problems in the channel.

The Functions of an MGA include:

• Back office support between advisor and insurer for sales transactions
• Sales and marketing support for the advisor
• Market conduct compliance support for the insurer

AGA’s Associate General Agencies – They too support independent financial advisors on a smaller scale, compared to the MGAs. It is mostly a sub to one or more MGAs.

Competitive Landscape

It is a fragmented market, with the leading players, such as SunLife, ManuLife, Great Westlife, contributing about 25-30% of the total health insurance market, in 2018. The competition is, however, tightening up, based on the consumer awareness about having an additional private health cover. The consumers are resorting to additional health benefits offered by the private players, besides receiving Medicare benefits free of costs. Sunlife, in 2018, had acquired MaxWell Health, a digital platform that makes it easy for plan members to make good benefit plan enrolment decisions, along with administration tools for employers and brokers.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Manulife
Sun life Financial
GreatWest Life
Ontario Blue Cross
Blue Cross Canada
Green Shield Canada
Ivari

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