Working behind the scenes, the Corporation provides administrative services to member insurance companies to share large portions of recurring drug claims with very high costs within the drug insurance plans they fully insure. As a general rule, the cost sharing is done where the cost for drugs for one person covered under a drug plan exceed $65,000 annually for the 1st two years and $32,500 afterward. The corporation also provides for compliance and governance services to ensure all member companies have the agreed upon processes and insurance structures in place to allow the sharing of these costs.
In performing these tasks, using an insurance principle called “pooling”, insurance pools of claims are set up with in the member company to share high drug costs across employer bases and also across member insurance companies.
By sharing the insured cost of repeating high and very high cost drugs, CDIPC’s member companies help maintain the viability of the insurance programs for employers and their employees. In so doing, they allow the employees’ drug coverage to continue so that their treatments can continue.
The drug treatments covered by an employer’s insurance are often life changing and even life sustaining for the Canadian’s who need them. Without the sharing of the drug costs over ongoing threshold annually, the related costs for these drugs would result in very material increases to insurance plans when they renew annually. The price increases, in many instances, could render the plan unaffordable for the employee’s employer. This is especially true for employers with small and mid size employment bases. The result could very well mean a cut back on drug coverage by the employer or elimination of drug insurance outright. This is an outcome no one wants.
While the sharing of these costs between insurers doesn’t eliminate the inflationary pressures on the drug plan, it does contribute to maintaining affordability of plans where plan members have high drug costs year over year. Drug pooling provided by CDIPC’s member companies is not a perfect solution but it provides a means to ensure Canadians continue to be able to afford the drugs they need to thrive as both employees and members of Canadian society.
