The debate on universal drug insurance should soon intensify as the federal government has promised to table a bill on drug insurance.
The actuarial profession has been closely associated with the development of major Canadian social programs, such as the QPP, health insurance, etc. The Canadian Institute of Actuaries took a position on drug insurance in 2021. At this stage of the debate, we wish to further explain our position.
All Canadians should be covered by affordable drug insurance. Rather than establishing a single universal public plan for all of Canada, with uncertainties about potential savings and federal encroachment in an area of provincial jurisdiction, we propose to build on what already exists and establish a national framework in which would evolve from public and private regimes.
In this context, private group plans, offered by employers, unions and professional associations, would remain available, but would have to respect national criteria regarding the drugs covered and the maximum share of the cost remaining the responsibility of the patient. People who do not have a private plan would necessarily be covered by a plan managed by their province of residence. Everywhere, seniors and last-resort assistance providers already have access to public drug insurance. We would only add people not covered elsewhere to the public plan.
The federal government would have an important role to play, as a reinsurer, by covering a share of each patient’s catastrophic claims. In addition, the negotiation of drug prices would be centralized with a single organization, in order to have the strongest negotiating power.
The proposed approach would allow governments to continue to focus on improving health and education programs for the population and doctors rather than on the architecture and administration of a compensation system.
Why this approach? For a host of reasons:
• Guarantee fair and equitable coverage for all;
• Direct government efforts towards issues of price and availability of medicines and public health issues;
• Enable rapid implementation by reducing the possibility of administrative slip-ups;
• Spread the risks among the greatest number of stakeholders (not only taxpayers through their governments, but also employers and insurers);
• Maintain the funding currently offered by employers as well as the greater generosity and flexibility of their plans;
• Continue to benefit from the work of private insurers who bear a significant part of the risk of cost overruns, with premiums with low administrative costs and profits;
• Respect the constitutional powers of the provinces;
• Allow provinces to retain their tax revenues on private drug insurance (taxes totaling more than 12% in Quebec and 10% in Ontario).
Before proceeding, the costs and risks of any national approach to drug insurance must be seriously analyzed. The estimates circulating are open to dispute. However, the information exists. At least in the case of Quebec, whose system is a gold mine of data and information. And we can complete it using data from insurers. As for the savings that we hope to achieve through national cost control measures, they will have to be based on solid analyses.
The Quebec framework has existed since 1997 and we know what worked well and not so well, what was corrected and why. It possibly corresponds to our capacity and willingness to pay. The out-of-pocket limit ($1,196) seems expensive, but becomes minuscule when compared to the sky-high prices of many observed claims.
