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Will Canada Ever Have a National Drug Plan to Take the Burden off Private Plans?

Mar 9, 2018 9:00:00 AM / Mario Malatesta / Employee Benefits / 0 Comments

Will-Canada-Ever-Have-a-National-Drug-Plan-to-Take-the-Burden-off-Private-Plans---compressorDespite the high praise Canadians give their healthcare system, most recognize there are some shortcomings.

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Most provincial health plans don’t cover vision or dental care, for example. Canadians are left to pay out of pocket unless they can rely on private plans to assist them with payment. 

Another area of oversight is the lack of a national drug plan. Most provincial plans do not offer much in the way of assistance with prescription medications, which has left most Canadians footing the bill for necessary medications or relying on private plans for coverage.

The Pharmacare Paradigm

Pharmacare, or a national drug plan, would cover the costs of prescription medication for all Canadians. There have been ongoing calls for a solution of this sort, but the federal government has made very little movement. Instead, the government has devolved responsibility for management of all aspects of healthcare, including Pharmacare, to the provinces. 

The provinces have approached Pharmacare differently, but in no province does universal coverage for prescription medications exist. In Ontario, for example, low-income citizens can apply for assistance with their prescription medications. Seniors can apply for a co-pay arrangement with the government. In January 2018, OHIP’s drug plan was extended to cover prescription medications for all Ontarians under the age of 25. 

Even within these plans, coverage is not universal. Patients are encouraged to select generic medications and not all medications are covered on the Ontario Drug Beneficiary. If the medication isn’t listed, the province won’t pay for it, even if the person qualifies for assistance otherwise.

Falling Back on Private Plans

As a result of the patchwork of Pharmacare at the provincial level, many Canadians do not have adequate coverage for their prescription medications. As the population ages and more people develop chronic conditions, the need for prescription medication will continue to rise. More seniors will be without coverage as they lose their private insurance when they retire. 

Most Canadians rely on their private plans, which are often provided by their employers. Without these drug plans, many Canadian citizens would have no coverage whatsoever. People would be responsible for the entire cost of all their prescription medications. For many, these medications would be unaffordable. 

Private plans have shouldered the heavy burden of ensuring a good majority of Canadians can access the medications they need to maintain their health.

An Uneasy Tension

Private plans could be in trouble, however. Over the past few years, drug costs have risen exponentially. This puts increasing pressure on employers. If prices rise too high, their benefits costs may make the plans unaffordable.

Some employers are already scaling back benefits, and drug plan benefits are often the first to go. As employers scale back benefits to make ends meet, Canadians are losing their coverage. This puts many citizens at risk. They must face the choice of paying for expensive medications out of pocket or going without.

Easing the Burden

Medication costs are one of the primary drivers of rising benefits costs across the country. When Ontario rolled out its new OHIP+, CanadianHR Reporter estimated extending Pharmacare coverage to Ontarians under 25 would save private insurers and employers around 10 percent annually.

Imagine if all Canadians were covered under a national drug plan. The burden on private plans would certainly be eased. Employers might not feel the pressure to slash benefits to keep costs in check. They might even turn to offering more robust benefits, such as better dental care. Some might continue to offer additional coverage for medications as a “back-up” for the national drug plan.

The options are endless. One thing is clear: Canada needs a national Pharmacare program. It will benefit employers, insurance providers, and Canadian citizens who need and deserve the best medical care.

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Topics: Employee Benefits

Mario Malatesta

Written by Mario Malatesta

With experience in the financial services industry and the group benefits industry, Mario Malatesta founded GroupQuest Benefits Resources Inc with just his business partner. Today, GroupQuest is a leading Group MGA in Canada with about $150M of group insurance premium in force and a support team of over 35 staff members including: renewal, marketing, sales, and service support teams. GroupQuest has offices in Vancouver, BC and Calgary, AB, as well as a head office in Mississauga, ON.   Mario is married with two children (twins). He enjoys many different sports and travelling with his family.

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