A primer on some of Canada’s catastrophic drug programs

All Ontarians under the age of 65 who spend a significant amount of their annual household income on prescription drugs are eligible for the Trillium drug program, provided their private plan doesn’t cover the entire cost of their medications. But besides eligibility, how does the program work?

Ontarians using the Trillium program must pay a deductible of approximately four per cent of their household income, but the threshold can vary depending on the number of people in the household and combined net incomes. To calculate deductibles for households with net incomes of less than $100,000, the process begins by adding net incomes for all members. A person then subtracts $20,000 from that amount and multiplies the result by 0.045. Add $500 to the result and subtract between $0 and $200, depending on the number of people in the household. The remaining amount is the annual deductible. 

Read: Changes to make Trillium first payer could have major impact on private plans

Premiums paid by an individual for private insurance, whether obtained through a employer or not, can count towards the deductible. Each year, individuals in a single-member household can apply a maximum of $100 towards the deductible. If a household has two or more members, the maximum increases to $200. Prescription receipts from the period between the enrolment date and the confirmation of enrolment can also count towards the deductible.

If patients register for the program partly through the benefit year, which begins on Aug. 1, their deductible will be prorated. After paying the full deductible per quarter, patients pay $2 per prescription until the next quarter begins.

For example, a patient whose annual deductible is $600 and a start date of Aug. 1. will pay the first $150 of eligible prescription costs between that date and Oct. 31. Afterwards, the person will pay up to $2 per eligible prescription. On Nov. 1, the $150 deductible resets.

Read: The debate over drug formularies

This fall, Ontario will implement a technology change to improve the co-ordination of benefits between private and public plans. Currently, privately insured Trillium recipients who haven’t met their quarterly deductible will pay out of pocket for drug costs their insurer won’t cover. They then submit paper receipts for these costs, which the Ministry of Health and Long-term Care assesses. If the costs exceed the deductible, the patient receives the difference. The process, however, can take six weeks or longer.

“When the cost of drugs is very high, the out-of-pocket expense paid by a [Trillium] recipient with private insurance can be significant,” David Schachow, assistant director of the drug programs delivery branch at Ontario’s Ministry of Health and Long-term Care, told Benefits Canada in an email. “Waiting six or more weeks can be a financial burden.”

The technology changes will allow pharmacies to submit prescription claims online, thereby reducing wait times. They’ll also track when a privately insured patient reaches their quarterly deductible, after which the plan will pay the pharmacist directly and eliminate the need for reimbursement.

There are approximately 137,000 households and 315,000 individuals registered with Trillium, according to David Jensen, a spokesperson at the Ministry of Health and Long-term Care. In 2015/16, the Ontario government spent $530 million on the program, more than $100 million more than in previous year.

Read: Panel calls on feds to create an ‘equitable’ and ‘cost-effective’ national pharmacare system

Reimbursement works differently in other provinces. British Columbians, for example, can register for the provincial Fair PharmaCare Plan, which offers income-based help for expensive medications. Families with a net income of no more than $15,000 pay no deductible and receive 70 per cent coverage for eligible medications. After reaching their annual maximum — which ranges from $25 to $300 — the province pays for all eligible costs. For families earning between $15,000.01 and $316,667.00, coverage remains at 70 per cent, with deductibles ranging from $300 to $9,000 and annual maximums ranging from $450 to $10,000. And families earning more than $316,667 receive 100 per cent coverage after they reach a $10,000 deductible.

In Nova Scotia, on the other hand, residents can register for the province’s Family Pharmacare Program, which aims “to assist Nova Scotians who do not have drug coverage or are experiencing high drug costs not covered by their private insurance,” according to an explanatory booklet. It also notes those with private insurance are welcome to join the program but it stresses the provincial plan is the payer of last resort.

Read: Many older Canadians don’t take drugs as prescribed due to cost: study

Copayments and deductibles are calculated based on family size and income. The first 20 per cent of each prescription counts towards the annual copayment maximum, with the remaining 80 per cent applied against the annual deductible. Once someone reaches both thresholds, the program will cover the rest of the costs. According to the program’s online calculator, a family with an income of $40,000 and two dependants earning nothing will have a $1,190 deductible and a $2,720 copayment. A family earning $100,000 that includes two dependants with no incomes of their own will have a deductible of $17,390 and a copayment of $14,100.00.