Universal pharmacare coverage for Canadians is within reach, based on cost estimates in a new C.D. Howe Institute study. In "Filling the Gaps: A Prescription for Universal Pharmacare," Policy Analyst Rosalie Wyonch finds there are ways to close the gaps in prescription drug coverage and protect households from excessive costs when in acute need through the expansion of public insurance.
"Gaps in prescription drug insurance coverage leave many Canadians at risk." Noted Wyonch. "In an already fiscally strained system, addressing coverage gaps presents a significant challenge. But, with careful expansion and revision of public programs, prescription drug insurance for all Canadians is within reach."
The report investigates current prescription drug insurance in Canadian provinces, evaluates options for achieving universal coverage and estimates their cost. These estimates suggest that providing prescription drug insurance coverage to the uninsured population would increase total provincial government spending across the country by about $2.2 billion to $5.4 billion in 2020, depending on the option chosen. The estimated cost of implementing catastrophic drug insurance ranges from about $340 million to $890 million, to cover drug costs above a threshold of 9 percent of personal income or 6 percent of income, respectively.
With the federal government's Advisory Council on the Implementation of National Pharmacare chaired by Dr. Eric Hoskins due to issue its final report this month, pharmacare is high on the national agenda. Wyonch analyses two possible options to make the universal pharmacare dream a reality.
- Option 1, Automatic enrollment: If comprehensive coverage available to seniors, children and low-income households were simply expanded so that all uninsured individuals were automatically enrolled in a comprehensive public plan, it would increase provincial expenditures by up to $5.4 billion in 2020, and the cost of such a program could reach about $6.4 billion annually by 2030.
- Option 2, the Quebec model: If, however, provinces were to implement a new public insurance scheme similar to that in Quebec, the cost implications are much less dire – about $2.2 billion in 2020. Though there are many differences underlying the two estimates, one key feature of Quebec's insurance model is that people enrolled in public insurance finance the costs of their coverage by paying an annual premium.
"Adopting a prescription drug insurance model that includes a funding mechanism would reduce the potential for short-term strain on provincial budgets as pharmacare coverage is expanded," says Wyonch. "Insurance premiums paid through income taxes are, effectively, revenue earmarked for prescription drug spending, and shouldn't be considered public savings per se. Quebec has achieved universal prescription drug insurance while maintaining public spending that is comparable to other provinces."
Since Quebec has already signaled that it will opt out of a federal pharmacare program, says Wyonch, other provinces adopting its model would be a feasible way to bring us one step closer to harmonized prescription drug coverage across the country.
"In general, premiums and copayments should remain a feature of any universal prescription drug insurance policies," notes Wyonch.
is a Policy Analyst at the C.D. Howe Institute.