Justice Committee on Nov. 22nd, 2016

[The Chair, Liberal, Anthony Housefather]

Thank you very much for your testimony.

Dr. Cohn.

[Robert Howard, Past President, Canadian Institute of Actuaries]

Excuse me, Mr. Chair. There are some further comments from the Canadian Institute of Actuaries.

[The Chair, Liberal, Anthony Housefather]

Sorry, I wasn't aware that you were sharing your time, but that's fine.

Mr. Howard, if you want to go ahead, please go ahead.

[Robert Howard]

Thank you very much, Mr. Chair.

You may not have intended it, but the anti-selection that Bill S-201 would allow confers a benefit on those who test positive for certain genes. They know that they will be able to buy insurance priced to cover a risk much lower than their own risk. Suppose Bill S-201 is enacted as is, and then you learn that, say, your son-in-law carries a gene for a serious, often fatal, heart condition. Wouldn't you recommend that he buy life insurance, and a lot of it? If you answered yes, you are agreeing that anti-selection is real and that the law confers a benefit on those who test positive.

How big will the impact be? I created a model on behalf of the Canadian Institute of Actuaries, and I wrote two papers on it just to answer that very question. My model suggests that premiums for life insurance are likely to go up by 30% for males and 50% for females because of the prohibition in Bill S-201. That's a lot. That's what most of your constituents will be facing soon after the passing of Bill S-201. We believe that you didn't intend to do something that would result in a big jump in costs for your constituents. We don't think that it's in the public interest to do so.

If you're familiar with the paper written by Angus Macdonald, in 2011, the size of the impact may surprise you. I can explain why my numbers are appropriate for Canada, if you wish.

It's possible to amend the bill to avoid the unintended consequence of large increases in what Canadians will pay for insurance. Our proposed amendment is in our brief, and it's shown on the slides here. There's a table, as well, that gives the amounts that we're suggesting. The amendment sets a limit for the prohibition on requesting to see the results of a genetic test. Because the limit in our proposal is based on the average weekly earnings as published by StatsCan, it requires no recurring action from Parliament to keep it up to date. A company could use a genetic test if the amount is over the limit and if the mortality impact of the gene is found to be well supported by data. That's what's meant by “reasonable and bona fide grounds”. This chart shows the limits for the various types of insurance.

The amendment directly addresses two concerns. First, there is no restriction on buying insurance after a positive test up to the amount that the average Canadian is now buying. Second, by not applying the prohibition on larger amounts, we won't have the serious anti-selection that would result in large premiums for those who have not been tested or have tested negative.

By the way, even today, Canadians with a positive test can get a significant amount of life insurance. Group insurance is not restricted at all. Mortgage life insurance is not restricted, as opposed to what CMHC offers. There are insurance products sold with no medical questions at all; these aren't restricted. If an individual previously bought guaranteed insurability insurance, then more life insurance can be purchased with no medical evidence. Any insurance that's already owned cannot be terminated by the insurance company because of a positive test. So, fears about access to insurance are not well founded.

Note that the amendment that we will propose will not benefit the insurance companies. The companies are able to adjust their premium rates to protect their own profits.

I don't expect that their profits will, in the long run, be materially different if Bill S-201 is defeated, if it passes as is, or if it's amended as we propose. It's the public that will be hurt, but only if Bill S-201 passes as is. Our proposed amendment would protect.

Thank you, Mr. Chair.

[The Chair, Liberal, Anthony Housefather]

Thank you very much.

Dr. Cohn.

[Dr. Ronald Cohn]

Thank you very much, Mr. Chair, and thanks to the committee for providing me the opportunity to speak to you.

I would like over the next few minutes to try to bring to life some of the discussions you have been having over the last few weeks, and to provide you with evidence that genetic discrimination is real. It's a frequent problem in this country that's affecting thousands and thousands of individuals.

I'm here today speaking not only on behalf of the 197 colleagues around the country who have sent a letter to all of you, but also on behalf of health care providers all over Canada, and maybe most importantly, I'm here to speak on behalf of every individual in Canada who is potentially at risk of being faced with genetic discrimination at some time in their lives.

I will provide you with three examples that address the issue that we are facing in the health care community.

I will give you an example of how genetic discrimination interferes with our ability to provide high-quality, safe, and best-standard clinical care to our patients, something that, in part, can be paralyzing for us as health care providers.

I will provide you with an example of how fear of genetic discrimination can interfere with our ability to perform the kind of research we need to actually move forward our standard of clinical care and continue to improve it, and at the same time think about the health care cost and try to keep it down.

Last but not least I will give you an example of the preventative aspect that the fear of genetic discrimination has, where without genetic testing, individuals cannot act upon certain knowledge and put measures into place that will provide protection or help to avoid a life-limiting or a life-threatening disorder.

Let me start with the first example—and it's sad for me to say that I've been in Canada for four and a half years now, and there are too many examples that I could choose from since I've moved here. I chose the example of a young girl who came to my clinic because she was thought to have a connective tissue disorder. The issue with that disorder was that she would be put at risk of her big blood vessel, coming out of her heart, the aorta, being torn, which would be a life-threatening problem.

Once I examined her, I discussed with the family the offer of genetic testing to find out whether she has a more severe or a milder form of this disorder. When I went through the consent process and we had to discuss the issue of genetic discrimination, both parents were very agitated about it. The mother was looking for a new job, and she said she was afraid that this might interfere with her ability to get that job. The parents did not have life insurance, and they said they did not want to go forward with the genetic tests. As a result, this child has to come to the hospital every three months to get an ultrasound of her heart, and is living with the fear of having the more severe form of the disease, but taking this fear over the fear of genetic discrimination.

I would like each one of you to put yourself for one minute into my shoes, knowing that I am not able to provide the right standard, best practice of care because the family declined to go forward with genetic testing. It has been paralyzing at times to me and to other health care providers to simply not do the job I learned and was trained how to do.

The second example is of a research study in which we were trying to answer the question of whether whole genome sequencing—the sequencing of your entire genome—would be a much better test to diagnose a medical condition, and also a much cheaper test for the health care system.

We approached about 200 families. I would like you to think for a moment about families who have had children for many years, most of them with very severe medical conditions, who are trying to look for an answer as to why this is happening to their child. When we offered them the chance to participate in the study, telling them, “There's a really high likelihood that we'll find an answer for you”, they were elated, excited, as you can imagine. Yet again, when it came to the consent process, over 35% of families elected not to participate because of a fear of genetic discrimination.

What that shows you is that, despite being on a search, a journey, to try to find an answer for “what is wrong with my child?”, parents elected not to go after that because of the fear that they would have issues with genetic discrimination. At the same time, it corroborated, somehow, that our study made it much more difficult to do this kind of research to actually prove that this is a better test, it's a cheaper test, and that's the test that we should offer the Canadian public if you are in a situation like this.

The last example I'm going to give you is about a young adult woman who has a family history of colon cancer. Her mom had colon cancer. She elected to do genetic testing, in order to find out whether she has a genetic form that predisposes her to this cancer.

When she went through the consent process, I don't want to repeat myself too much, again she was faced with the fact, “I can't get life insurance. What I will do is I will get yearly colonoscopies to screen myself so, in case something happens, I know that I can protect myself.”

The issue is, if you are young, you don't get yearly colonoscopies covered by OHIP if you don't have genetic evidence in order to actually be allowed to get that covered. In the end, she decided her health was more important than insurance issues. She did the genetic tests and was found positive and is in now in a situation to do yearly colonoscopies and is actually going to be able to prevent any kind of medical complication from happening.

While I'm not here to talk about industry or insurance issues, I would like everyone to consider that the preventative aspect and the preventative power of genetic knowledge gives many individuals the opportunity to take action to actually stay alive, healthy, as long as possible, and as a bi-effect, obviously, pay your insurance premium.

I hope I was able to bring to light some of the issues and, based on this, I'm going to go out on a limb and urge all of you to accept Bill S-201 without any amendments, in full, as it is, so every Canadian can have a better life, free of genetic discrimination for everyone.

Thank you.

[The Chair, Liberal, Anthony Housefather]

Thank you very much, Dr. Cohn.

Mr. Frank, Mr. Zinatelli, the floor is yours.

[Frank Zinatelli]

Actually, it will be my colleague who will be speaking.

[Stephen Frank]

Thank you, Chair.

I'm Stephen Frank, senior vice-president of policy for the Canadian Life and Health Insurance Association. I am accompanied by my colleague, Frank Zinatelli, who is vice-president and general counsel at the CLHIA.

The CLHIA represents life and health insurance companies that account for 99% of the life and health insurance in force across Canada. The industry protects 28 million Canadians and makes benefit payments of $84 billion a year.

We appreciate this opportunity to appear before the committee as it reviews Bill S-201. As drafted, we do not support Bill S-201. Our central issue is that, over time, it would likely result in an increase in the number of Canadians who do not have insurance. In addition, we do not believe that clauses 1 to 7 of the bill are constitutional.

Let me elaborate on these issues and also highlight what the industry is doing to address concerns over the protection of individuals' genetic information, while ensuring that insurance remains affordable for Canadians.

Insurance is a good faith agreement. At the time of application, parties disclose any information that may be material to the contract so that the contract can be entered into on an equal information basis. This ensures that the applicant knows what benefits are being provided and that the insurer can properly understand the risk in order to make an informed decision about whether to provide life insurance to that individual and at what price.

This principle is protected in insurance legislation in every province and territory. Under this principle, and with the express consent of the applicant, insurers use family history, lifestyle and medical information to set prices that fairly reflect the level of risk of insurance applicants. Using genetic test results already in the hands of the applicant is a logical application of this principle. This helps ensure that the costs of insurance reflect each individual's risk and that some individuals are not inappropriately paying for or subsidizing the cost of insurance for others.

Experience tells us that if an individual gets a genetic test result that confirms that they're more likely to develop an illness or other condition earlier in life than the general public, they will seek out insurance and they will seek out more of it than they otherwise would have.

Ultimately, this will result in higher premiums for other consumers as insurers will need to increase premiums for everyone to cover these unanticipated higher costs. As you've heard already, the Canadian Institute of Actuaries has concluded that not allowing insurers to have such relevant information would over time lead to increases in term life insurance of 30% for men and 50% for women.

We know that Canadians are price-sensitive. As prices rise, many thousands of them will likely decide not to purchase insurance due to cost considerations. Therefore, a likely result of any prohibition on insurers having equal information when assessing an application for insurance, is that fewer Canadians will have protection from unfortunate events than otherwise would have.

We also do not believe that section 1 through 7 of the bill fall within the constitutional jurisdiction of Parliament. The predominant effect of those sections would be to regulate the provisions of goods and services and the terms of contracts including in the insurance industry. Sections 1 through 7 of the bill, therefore, fall clearly under the property and civil rights head of power, for which the provinces have exclusive constitutional authority.

There have been previous testimony on this bill that it could be considered constitutional based on the federal criminal power. The federal Parliament has broad and plenary power in relation to criminal matters. However, the federal Parliament cannot legislate within an area of exclusive provincial jurisdiction, simply by casting the legislation as criminal. The Supreme Court of Canada has indicated that Parliament's ability to pass criminal law that addresses health is limited. Genetic testing information does not fall under this category.

As well, please note that sections 1 through 7 of Bill S-201 target a specific category in specific contexts, including insurance and employment, and do not have a criminal law purpose. They're not aimed at prohibiting genetic discrimination generally and cannot be supported under the federal criminal law power.

Our comments are supported by the views of the Torys law firm, in an opinion that we have obtained. We have provided copies of the legal opinion to the clerk to distribute to members of this committee.

As an industry, we understand that genetic testing information is sensitive medical information. This is why the industry already has in place an Industry Code, in which all life and health insurers commit to a variety of obligations, including that no Canadian will be asked to take a genetic test as a condition of obtaining insurance.

Beyond this, however, we are committed to proactively finding a solution that balances the concerns of Canadians regarding the use of genetic testing results with the need for fair and reasonably priced insurance.

As such we've been actively working on this for many months and recently initiated discussions with the provinces on an approach where insurers in Canada would commit to not asking for or using any genetic test results for applications for life insurance policies up to $250,000. At this level more than 85% of applications for life insurance would not require any disclosure of genetic test results, and therefore, will address the concerns around this issue for the large majority of Canadians.

This approach would also keep the cost of life insurance affordable for the average middle-class family. We hope to be in a position to make an announcement with respect to this initiative shortly.

In conclusion, Bill S-201 would undermine the critical principle of equal information and would likely result in an increase in the number of Canadians who do not have insurance over time. In addition, we do not believe that the sections of the bill dealing with insurance are within federal powers. However, we understand that genetic information is sensitive to Canadians. We've started discussions with the provinces about finding a balanced solution that will appropriately protect Canadians' genetic information while also maintaining fair and reasonably priced insurance.

We appreciate this opportunity to participate in the committee's review. We would be pleased to answer any questions you may have.

Thank you.

[The Chair, Liberal, Anthony Housefather]

Thank you very much.

We'll now go to the question period.

Mr. Nicholson.

[Rob Nicholson, Conservative, Niagara Falls, ON]

Thank you very much, Mr. Chairman.

Gentleman, thank you very much for taking time to be with us here this morning.

My first questions are directed to Mr. Boudreau and Mr. Howard. You talked in your presentation about what pervasive anti-selection would mean. You gave an example of the United States Affordable Care Act, better known as Obamacare. You said the predictions were that there would be large losses for insurers, and this is exactly what has happened. I think you gave us some details. You said that for Aetna and other companies this has been a disaster.

As you went on in your presentation you came up with an amendment and suggested that we adopt the amendment, but at the final bulletin you put up here, you said if we pass this amendment, this is not going to protect insurance companies. I'm wondering if you could reconcile that? You said without this was a disaster in the United States, as an example. You proposed an amendment but you said it's not going to help insurance companies. I'm a little bit confused.

[Robert Howard]

There are two main differences. In the U.S. the costs between those who have very serious illnesses and those who are generally healthy can be very sizable. The incentive is for only those who are the most ill to get the insurance. That's why in the U.S. the losses are astronomical.

No one is suggesting that the losses would be as large as that in Canada, because we're talking about genetic conditions that are relatively rare. My model includes 13 genes—that's all, just 13—out of well over 5,000 that have been identified. Those are the ones for which there is good evidence. We're talking about only around 1% of the population that might have one of these genes and would have a good incentive for anti-selection. The extent to which the premiums could rise would be less in this situation than is the case with Obamacare.

The reason I said—

[Rob Nicholson, Conservative, Niagara Falls, ON]

You said already that it's going to go up 50% for women and 30% for men. That's a big jump.

[Robert Howard]

Yes, but you see if the insurance companies increase their rates by that amount, their profit is going to end up being the same. This is not about protecting the profits of the insurance companies. They're going to get the same profits either way, because they can adjust their premium rates. However, the public can't adjust. If they don't have that gene but there are some out there who have that gene and who can buy a millions dollars' worth of insurance, that's going to push the price up for everybody.

[Rob Nicholson, Conservative, Niagara Falls, ON]

You gave the example of Obamacare, and you talked about what that is doing. Have you looked at any other examples? We had testimony here, I think about a week ago, that, for instance in Great Britain, things have gone well. The insurance companies have done well, despite the fact that there are now prohibitions against genetic discrimination or genetic testing. Have you looked at other countries besides that, or is the focus pretty well on the United States?

[Jacques Boudreau]

Can I just come back for a minute? The one big distinction is that in the U.S. the insurers are not allowed to increase premiums. They cannot put caps on the benefits they pay out. That's just to clarify that's one reason why they lose money, and insurers in Canada would not.

As for other places, the impact on life insurance will be measured over an extended period of time. I'll give you an example. Somebody takes out a life insurance policy after finding out that they are a carrier for Huntington's, for example, at the age of 30, and they will not die until age 45 approximately. You could do mortality studies year after year and you would find no distinction at all between those people and the rest of the population. It would take more than a decade before the impact would be felt. To my knowledge—

[Rob Nicholson, Conservative, Niagara Falls, ON]

Is that happening in Great Britain? Do you think that's what's happening there? They just haven't waited long enough to see what the impact of this will be?

[Jacques Boudreau]

That's my opinion.

[Robert Howard]

Actually, I just received some information from the U.K. this morning. I haven't really had time to digest it, but they're very concerned that the frequency of genetic tests has gone up so much since their moratorium was accepted that they think there's a shift in the balance so that the consumers are in a much stronger position now.

Before, because of the lower frequency, it wasn't as serious an issue. There are certainly expectations that we could see some quite significant increases in the U.K. as well over time.

[Rob Nicholson, Conservative, Niagara Falls, ON]

Okay, fair enough.

[Stephen Frank]

I just want to make a couple of points. Be careful with comparisons with the U.K. The U.K. prohibition applies to predictive genetic tests only and not diagnostic. There's a big difference. The predictive ones will materialize over time. The bill proposed today would cover both of those, so it's a much broader prohibition and would get into the kinds of diagnostic scenarios that Dr. Cohn was referring to.

The second thing I would note is that in Canada we issue very long-term insurance. You might have 30- or 40-year terms on that. The U.K. tends to have much shorter terms than that. One way you could keep premiums down, frankly, is to shorten the term of your insurance, so you would make people renew it every five years or every 10 years, and you'd be capturing that new information each time you did it.

Different jurisdictions, particularly in Europe, have a completely different market. They've narrowed their prohibitions in ways not contemplated by this bill. There are similar things in the States. Be careful with some statements that say that Canada is an outlier in this regard. We don't believe that's accurate in most scenarios when you look around the world.

[Rob Nicholson, Conservative, Niagara Falls, ON]

Dr. Cohn, did you have a comment on this?

[Dr. Ronald Cohn]

I have a comment, a British comment I guess, that genetic testing is increasing. I think it's important to put this in the context that it doesn't have a negative impact on the health of anybody. The health and life expectancy of people doesn't change with the amount of genetic testing.

It is going to improve somewhat to the extent that preventative measures are now able to be in place for a number of different disorders. There are not just 13. There are currently 56 genetic disorders out there. If you know about them, then you can stay healthy and prevent catastrophes from happening. I want to put that into context.

[Robert Howard]

Just to put his context in a better context, if people were allowed to buy fire insurance when the smoke detector starts to beep, and not just beep, but give the full alarm, then that would push up the cost of fire insurance an awful lot, because people wouldn't buy until the fire started.

The issue isn't around the total cost of insurance, because group insurance is not going to go up in price. It's the same people who are going to be insured.

[The Chair, Liberal, Anthony Housefather]

I'm sorry, we're way over the time on this question, and we have three other questioners that we need to get to within the time, so I have to cut you off there.

Mr. Hussen.