Ontario government to become second payer under OHIP+ changes

Ontario’s new Conservative government has announced changes to the province’s youth pharmacare program to make it second payer for Ontarians under age 25 who have coverage through private benefits plans.

“Today, our government is announcing our intent to fix the OHIP+ program by focusing benefits on those who do not have existing prescription drug benefits,” said Christine Elliott, minister of health and long-term care, in a statement.

“Children and youth who are not covered by private benefits would continue to receive their eligible prescriptions for free. Those who are covered by private plans would bill those plans first, with the government covering all remaining eligible costs of prescriptions.”

Elliott said the new system will be more efficient, save taxpayers money and dedicate resources to those most in need. “Even more importantly, it would continue to guarantee that children and youth still receive the prescription drugs they need.”

Read: Ontario Liberals to expand OHIP+ program to seniors

Noting that private insurers had previously provided the government a grace period for some medications up to July 1, Elliott said the government is now asking them to extend it.

“We look forward to working with insurance groups to ensure a smooth transition to this updated system,” said Elliott. Her announcement didn’t specify a timeline for implementing the latest changes.

In a statement, the Canadian Life and Health Insurance Association said it welcomed the changes to the youth pharmacare program, which only took effect on Jan. 1, 2018.

“The life and health insurance industry is committed to working with the government of Ontario to ensure a smooth transition and is pleased to extend the transition period agreed to with the previous government beyond July 1,” said Stephen Frank, president and chief executive officer of the CLHIA.

Read: OHIP+ for seniors a ‘significant win’ for employers with retiree benefits plans

“We will work closely with the new government to ensure that all those who are eligible for coverage under an employer-sponsored health benefit plan are transitioned back from the OHIP+ children and youth pharmacare program with minimal disruption.”

When it comes to the impact on employers and plan sponsors, Christiane Bourassa, a senior consultant at Willis Towers Watson, says the costs they had been saving as a result of the youth pharmacare program will now revert back to them.

“Based on what they had budgeted, based on what they knew of the program, then obviously it’s going to cost them more because some of the costs will revert back to employers,” says Bourassa.

She doesn’t, however, believe the latest changes will have a major impact as children are typically not the biggest consumers of drugs. “I don’t want to say it’s a minor cost . . . but as much as the introduction of OHIP+ had generated savings, then those savings are just vanishing. So it has an impact — not a very large impact but it’s still an impact,” she says.

Read: Youth pharmacare plan’s growing pains creating challenges for some patients

Given the quickly changing circumstances, is the latest decision by the Ontario government a good move? Have your say in Benefits Canada‘s weekly online poll.

As for last week’s poll question, it asked whether orthotics claims are a concern for benefits plans. Most respondents (59 per cent) agreed that unnecessary claims are a growing burden that will affect the sustainability of benefits plans. Just 16 per cent disagreed, suggesting the issue is minor when compared to drug and dental claims. The remaining 24 per cent of respondents said it’s not a major concern but suggested unnecessary claims are an issue that warrant attention.