OBAMACARE EN ROUTE TO ALBERTA?
I wonder if we were to approach the average Albertan and ask him or her whether Alberta has an ‘all in nobody out’ provincial Pharmacare Program, how many would correctly answer ‘no’. Though we do have ‘catastrophic drug coverage’ for select groups like seniors and those on social-assistance, how many would know that average Albertans do not have universal access to prescription drugs?
As Canadians, we are privileged to have one of the most coveted public healthcare systems in the world. The infamous Obamacare program is often compared to the superiority of the Canadian healthcare system. Ralph Nader, a Washington based political and consumer activist, just listed 22 reasons why Canada’s Healthcare system is better than Obamacare, with top three reasons being: that tax-payments to fund the system are progressive, the administration is simple and the majority of the citizens love their healthcare system (in ascending order). 1
Our Alberta Healthcare card is all we need to present when admitted to a hospital. The first question an emergency room doctor will ask you is ‘where does it hurt’, not ‘do you have insurance’. Whether we admit it or not many of us take this universal healthcare coverage for granted, and view equal access to healthcare as a profoundly Canadian right.
However, when it comes to prescription drugs it is a very different Canadian story. Among countries with universal medicare, Canada is the only one without national drug coverage. Instead, Canadians rely on employer-sponsored group health plans and individual insurance. When compared with Britain, France, New Zealand, Canada’s inflation rate for drugs has been much higher; Canadians pay as much as 49% more per capita for drugs than countries with universal pharmacare.2 Rising pharmaceutical costs are often a hot-button issue with consumers, insurance providers and government stakeholders alike. Ironically, it is cost (government cost) that’s the Achilles heel of the debate on whether Canada should have a single-payer universal pharmacare system. With recent economic upheavals, governments are not quick to introduce new national programs.
So, we were watching closely when New Brunswick (the only remaining province that did not have ‘catastrophic drug coverage’) announced the rollout of a newly minted provincial Pharmacare program. This Drug Plan is not designed as a ‘catastrophic’ provision, to cover seniors and those on social-assistance, but a Program that will make it mandatory for all to pay premiums for a provincial drug plan. Here are some of the highlights on the specifics of this Drug Plan 3:
The plan will be implemented in two phases. Phase 1 will begin on May 1, 2014, when New Brunswickers with a valid Medicare card can choose to enrol in the plan. Phase 2 will begin on April 1, 2015, when all New Brunswickers will be required to have prescription drug insurance. Those not insured by a private plan will join the New Brunswick Drug Plan. At this time, minimum coverage standards will come into effect, meaning that all private group drug plans must be at least as comprehensive as the New Brunswick Drug Plan.
In some ways this plan is similar to BC’s Pharmacare program, where most BC residents are covered under the “Fair Pharmacare”, and coverage is based on net family or single income.
A recent article in the Edmonton Journal 4 stated that the Alberta Drug Reform will likely be akin to the one in British Columbia, where Pharmacare is income based; that means that lower income Albertans will be eligible for coverage at minimal or no charge, while bigger earners will be asked to pay more for each prescription. It’s expected that a monthly or yearly premium will also be charged.
Originally the Alberta Pharmacare reform was supposed to be implemented in January 2014. However, its rollout has been delayed due to the complexity and magnitude of the upcoming changes. The delay stems from concerns raised by special groups like seniors, who worry about the impact these changes will have on the current ‘universal seniors coverage’. Many are saying the Drug Reform will likely lead to a complete restructuring of the seniors’ Drug plan. Another stakeholder raising concerns has been the Insurance Industry who has indicated they’ll need at least 12-18 months to sufficiently prepare for any changes.
If the New Brunswick plan is any indication, it may be the proverbial ‘canary in the coalmine’ for Alberta. Though Alberta Government has stated that the proposed Drug Reform will save the Province about $180 million, there are concerns that an income-based system like the one in BC will result in more patients refusing to fill their prescriptions due to increased costs. With income-based Pharmacare, 6.6 percent of households in British Columbia still incurred over $1,000 in out-of-pocket drug costs 5; these are 2007 numbers, and given that pharmaceutical costs have been on the rise this percentage is likely even higher today.
The complexity of implementation and paradigmatic changes in approach to drug coverage will have significant impact on all Albertans, and may radically change the benefit consulting and planning advice that professionals in the field offer. One specific example of this impact is the government’s role in dictating what Private Group Plans can and cannot do as a result of Drug Reform – the New Brunswick Drug Plan states that Employer sponsored Group Plans may no longer have annual or lifetime drug maximums. With Government getting involved in drug coverage for the average Albertan, who’s really to say whether this will lead to more manageable costs for the employers or a happier work force.
Alberta has a long-standing history of relatively minimal government involvement in areas of insured healthcare, and only time will tell whether the impending Drug Reform will move our province inline with the ranks of those who are heralding the era of a universal pharmacare system in Canada. One thing we know for sure is that here at Qube Benefit Consulting we will adapt to the changing landscape of Alberta’s Drug coverage, and will continue to provide sound advice based on cost-efficiency, sustainability and flexibility. Obamacare or Albertacare, we are looking forward to serving the benefit needs of Alberta’s workforce.
1http://www.thestar.com/opinion/commentary/2014/01/12/canadian_health_care_better_than_obamacare.html 2 http://www.thecanadiancharger.com/page.php?id=5&a=1520 3 http://www2.gnb.ca/content/gnb/en/news/news_release.2013.12.1269.html 4http://www.edmontonjournal.com/health/Alberta+Health+delay+major+change+drug+coverage+system/9080203/story.html 5 http://www.cdhowe.org/pdf/Commentary_384.pdf