National Pharmacare: The Advisor Perspective

Oct 01 | 2019

The concept of a universal health insurance plan in Canada is not a new one. In fact, it’s been talked about back-and-forth in Canada for decades, with new life being brought to the topic in advance of the upcoming federal election in October.

National pharmacare is a huge topic with many moving parts and angles to consider, but we’ve done our best to break it down into smaller chunks!

What is a National Pharmacare Program?

A national pharmacare program in Canada would bring universal pharmacare and prescription drug coverage to Canadians across the country. In the current Canadian healthcare space, individual provinces are tasked with their own healthcare systems, which results in varying levels of coverage for Canadians by province. Instead, national pharmacare would put health care on the federal government, potentially closing coverage gaps between provinces and bringing a national drug plan to all Canadians.

Where is the Pharmacare Conversation Now?

Pharmacare plans are actually already in Canada today. Three provinces have some measure of pharmacare already in place – British Columbia, Alberta, and Manitoba, offering varying coverage levels for drugs to millions of Canadians. This shows that pharmacare is possible, but to create a national pharmacare plan will be a big undertaking, and there are many considerations.

The council on the implementation for national pharmacare released a final report that is an excellent way to get a good beginniner’s grasp on the issue. (We’d recommend the ‘Executive Summary’ to start).

National Pharmacare Perspectives

We held a webinar featuring two knowledgeable, passionate group insurance advisors, Dave Patriarche and Jeremy Stankov, who each took one side of this important issue. Over the course of the hour-long webinar, each of them brought up strong points for and against a pharmacare plan in Canada. We’ve boiled these down to four (admittedly simplified) perspectives: advisor, employee, insurer and taxpayer, which we’ll go into below.

These perspectives are adapted from talking points from the above-mentioned webinar, and aren’t meant to sway you one way or the other on the issue of national pharmacare. Rather, our intent is to provide an overall, well-rounded viewpoint to get you thinking and considering the issue from multiple perspectives, and the potential impacts of the insurance industry and its various stakeholders.

The Advisor Perspective

Advisors are in a unique spot here, as many of their concerns arguably overlap with the concerns of their clients. After all, what negatively affects their clients is likely to impact them as well. When it comes to advisors, one of the biggest talking points is the impact of removing drugs from benefits plans, which make up a significant portion of premiums, and therefore advisor commissions.

However, no longer paying for high-cost drugs in plans frees up dollars for employers to put that savings into other aspects of the plan that they haven’t been able to explore, or would like to expand. This could give advisors an opportunity to add additional value through alternative coverage or additional benefits options. As an example, defined contribution solutions, such as Health Care Spending Accounts (HCSA)s, could see an increase in popularity.

Things to think about:

  • If drugs are removed from plans, do you think there be a place for advisors to add value?
  • Will plans shift towards more defined-contribution style?
  • How will the decrease in revenues from drug claims affect insurers?

The Taxpayer Perspective

With a national pharmacare plan, the federal government will take on health care, but questions remain as to whether or not the government will be able to effectively run the programs without driving up costs too much.

Provincial programs already in place, such as RAMQ in Quebec or the existing pharmacare programs in provinces like British Columbia, Alberta and Manitoba could work as a template to rolling out a national program. But each solution is different – how can we determine which one is working most effectively, and would be best adopted on a national basis? Additionally, as with OHIP+ in Ontario, these kinds of healthcare reforms can become politicized, and when new parties take over, there’s the potential for a lot of hard work can be thrown out the window.

Things to think about:

  • Can taxpayers handle the extra expense of paying for drugs?
  • Will the government be able to build and run effective distribution?
  • What happens if pharmacare becomes politicized and a new government takes over?

The Insurer Perspective

Insurers have been providing coverage for Canadians for decades, so does the old adage, “Why fix it if it ain’t broke” apply? It seemed our two advisors were at loggerheads the most on this particular perspective, but both agreed that there were opportunities for improvement, particularly with technology and internal systems.

Potential for lost revenues and potential job losses remained a sticking point as well. If insurer’s revenues decrease with the loss of drug claims, what effect will that have on jobs and the Canadian economy?

Things to think about:

  • Will switching pharmacare to the federal government increase or decrease efficiencies?
  • Could the loss of drugs increase the costs and the load of other benefits on the plan?
  • Is there potential for a national or potential formulary supported by the government?

The Employee Perspective

Employees will be affected by any kind of change related to national pharmacare through a variety of means – taxes, coverage changes in plans, and more. If the government takes up the mantle of prescription drug coverage nationally, how will employees be affected?

Things to think about:

  • Will Canadians have to pay more taxes as a result of a pharmacare plan?
  • Will drugs be cheaper on a pharmacare plan, and therefore employees will pay less?
  • Will Canada still see new high-cost drugs being released in Canada on a pharmacare plan? Will employees still get the treatment they need?

Learn more about this issue and the advisor perspective on the recording of the webinar!

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