February 28, 2023 – A portable health benefits (PHB) plan is a feasible, affordable and sustainable way to improve access for millions of Ontarians to essential supplemental health and dental benefits, according to a new report from the C.D. Howe Institute.
Last year, the Ontario government established a five-member Portable Benefits Advisory Panel with the goal of providing advice on the design and implementation of a portable health benefits program for workers who do not have traditional employer-provided benefits.
In “Better for Workers, Better for All? Assessing a Portable Health Benefits Plan in Ontario,” author Chris Bonnett assesses the feasibility of a PHB plan for the province. Such a plan would follow workers as they move from job to job and cover workers in jobs without benefits, including self-employment, contracting, part-time, and temporary or gig-type jobs.
“About 30 percent of Ontarians do not have access to workplace health and dental benefit plans,” says Bonnett. “This is not a new situation, but it’s been aggravated by changes in the nature of work. Too many workers are exposed to high out-of-pocket costs for essential healthcare.”
A PHB model that supplements medicare would be novel in Canada and could potentially improve the health, social and financial security of workers, according to the author.
Bonnett explains that a PHB plan is likely administratively feasible because private health insurers, pharmacy benefit managers and third-party administrators already use similar systems. It can also be integrated with new federal plans, existing employer-sponsored health plans and Ontario’s Trillium and Senior drug plans.
Financial and fiscal feasibility, meanwhile, will depend on variables such as political will, eligibility, plan design, insurance mandates and cost sharing.
The best estimates of how many Ontarians would be eligible for a PHB plan range from 3.5 million to 5 million workers and their families. Assuming an average annual per-capita claim cost of $907, this plan could cost $3.2 billion to $4.5 billion – not including administration costs, tax considerations or subsidies for low-income workers, and assuming current provider service profiles and costs do not change.
However, feasibility for a PHB plan is improved because the cost would likely be shared by three parties – employers, workers and the provincial government. Of note, the cost would be reduced by Ontario’s share of previously announced federal spending on dental and mental health services, and by new federal funding for rare disease drugs. “The Ontario government expects to spend $75 billion on healthcare in fiscal 2022/23,” explains Bonnett. “If the government accepts a one-third share of estimated PHB claim costs, then this new plan would consume 2 percent or less of current health program spending. This model could solve healthcare access and equity problems that have existed for decades.”
Careful planning, ongoing stakeholder consultation, light regulation and a novel approach to governance can be used to resolve challenges associated with enacting this important reform for Ontarians, according to the author. Additionally, a PHB plan could also be operated as a pilot for the first year or two and then adjusted as needed.
Based on an initial review, there do not appear to be any better alternatives if the government wants to improve access to targeted health services, writes Bonnett.
“A PHB plan appears to be feasible, and warrants careful consideration following the report of the Advisory Panel to the government,” says Bonnett.
For more information: Chris Bonnett, PhD, Principal, H3 Consulting; Lauren Malyk, Communications Officer, C.D. Howe Institute, 416-865-1904 Ext. 0247, lmalyk@cdhowe.org
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.