Frank1 claims to “correct the record” by providing an estimate for the medical loss ratio for supplemental health insurance plans in 2012, and an average of this ratio from 1997 to 2012. Of note, Frank1 excluded disability coverage and similar benefits from his calculations. In contrast, we used statistics for the entire for-profit health insurance market, because the Canadian Life and Health Insurance Association does not publicly release disaggregated data.
The important question is whether these new data lead to different conclusions regarding the efficiency of private health insurance. We made two major arguments: first, compared to the public sector, the medical loss ratios in private plans are low; second, the medical loss ratios in both the group insured and individual insured markets have decreased over time.2 Private insurance is less productively efficient than public insurance and has become less productively efficient over time.
On the first point, the data Frank1 provides actually support our argument: the figure he provides for the private health insurance medical loss ratio — 82% — is much lower than those of Canadian public health insurance programs.3
Our second point was that medical loss ratios have decreased from 1991 to 2011.2 Frank1 counters that this was not the case for supplemental health insurance (i.e., excluding disability coverage and similar benefits), at least from 1997 to 2012. There are two problems with his claim. Notably, data omit 1991 to 1996, when overall medical loss ratios were comparably high. Second, Frank1 claims that the trend is “relatively flat” without disclosing data for each year.
Frank’s1 additional data support our first major conclusion, and do not undermine our second. Further, the selective disclosure of additional data supports our argument that more effective regulation of private health insurers — including requirements for greater transparency — would benefit Canadians.