A national drug insurance program would likely subsidize those who don’t need it
Calls for a government-operated national drug insurance program, commonly referred to as Pharmacare, are getting louder.
However, it seems as though the proponents of such a program lack perspective on what additional coverage a national drug program would provide for lower-income Canadians, and whether government-run insurance with limited patient payments is the best way to provide drug insurance coverage to all Canadians.
While there may be theoretical concerns about affordability across the income spectrum, there should be particular concern for those with lower incomes, as they may be more likely to forego filling their prescriptions due to cost than middle- or higher-income Canadians. The latter are more likely to have effective private insurance through their employer, or by purchasing it directly, thus reducing their need for government assistance.
A recent review of existing provincial drug programs found that Canadians with lower incomes currently already have access to comprehensive drug coverage. Specifically, in every province, people on social assistance receive coverage for drugs at very low cost, or no cost to the patient or insured individual. Further, while qualifying income levels vary across Canada, lower-income Canadians have access to at least catastrophic insurance for prescription drugs (which provide coverage after drug expenditures exceed a portion of income). As one would expect, coverage under current plans also tends to be more generous for lower-income children and seniors than for non-senior adults, particularly those without children.
There may, of course, remain the possibility that certain groups of vulnerable Canadians still struggle to pay for their prescribed medication. In such cases, public policy should focus on identifying and supporting these groups of individuals, instead of looking toward establishing a national plan that subsidizes those who don't need it.
When looking at the Canadian situation more generally, it’s also helpful to understand what’s happening in other countries.
For example, Switzerland and the Netherlands, two countries with high-performing universal access health-care systems, provide drug insurance coverage to their populations, and more timely access to higher quality health-care services at roughly the same cost as Canada (as a proportion of GDP, adjusted for age).
However, neither country has opted for a government-run insurance scheme; both provide universal pharmaceutical coverage as a fundamental component of universal health insurance coverage, which is provided through regulated, competing, private insurance companies. Moreover, the universal schemes in both countries require cost-sharing (including for prescription drugs) through both per-service charges and insurance deductibles.
Access to care for individuals and families regardless of health or income is ensured in both countries through a range of policies including community-rated premium regulations, taxpayer-funded premium assistance, programs that equalize risk among insurers, annual caps on cost-sharing, and public safety nets for vulnerable people. Rather than become an insurance provider, the government generally supports consumer choice for lower-income people by allowing them to choose their insurer and remain active players in the insurance market.
The universal health care models these countries have chosen demonstrate that that several avenues exist between the current, decentralized approach in Canada, and the sort of government-run, national program that proponents of the single-payer system propose.
Modern medicines are essential for improving health outcomes, alleviating pain and suffering, increasing longevity, and reducing expenditures on other medical services. At the same time we should remember that expansions in government insurance coverage are not costless, and must be judged against coverage already provided by governments to lower-income Canadians.
While there is merit to pursuing a policy that expands access to pharmaceuticals to those in need, this pursuit does not require the establishment of a potentially expensive national drug insurance program to subsidize those who don’t need it.
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