REASONABILITY TEST
2024 Terms and Conditions and following

The new Reasonability Test was adopted following consultation with Participants. The purpose of this test is to ensure that the Pooling Terms and Conditions adopted allow drug insurance plans to remain financially accessible and thus limit the risks of adverse selection between public and private plans when setting Pooling thresholds. It is intended to protect Quebec residents’ access to private drug insurance plans, particularly in the event of a very large claim within a group.

The Reasonability Test is meant to serve as a technical reference serving to guide the setting of thresholds.

Each year, new Terms and Conditions are established on the basis of data obtained from the Participants in each Process. The incidence and severity of claims are modelled and projected.

The Reasonability Test simulates 5,000 years of claims for each group size and compares the simulated average claims of a group to a maximum claim.

The maximum claim is established annually based on a principle of equivalence of the maximum cost for an insured, whether covered by the public plan or by a private plan. As such, it varies according to the parameters of Quebec’s public drug insurance plan.

The Terms established for a given year are considered to meet the objectives of the Reasonability Test when overall 99% (the tolerance threshold) or more of the certificates overall have a simulated net premium below the maximum claim based on each group size; particular attention is paid when the tolerance threshold of a group size is below 97.5%.