Ontario pharmacare program provides some relief to plan sponsors

Ontario is introducing a pharmacare program for all residents aged 24 and under, Finance Minister Charles Sousa announced Thursday as he tabled the province’s 2017 budget.

The new program will launch on Jan. 1, 2018, and will offer universal drug coverage for all medicines listed in the Ontario drug benefit formulary. There will be no copayment or deductible, and youth will be eligible regardless of family income.

“It will decrease plan sponsors’ costs to some extent,” says Tiina Liivet, vice-president of benefits and health at Accompass Inc. She notes dependent children and young workers typically aren’t the biggest contributors to an employer’s drug costs and the formulary won’t cover several high-cost medications. But the new program “will still have a mitigating impact on how much [a plan sponsor’s] cost is.”

Read: A primer on some of Canada’s catastrophic drug programs

Liivet notes the government will be the first payer, so carriers should ensure co-ordination of benefits occurs in the correct order. Another issue is how coverage for expensive drugs for orphan diseases would fit into the new program.

Earlier this week, the Ontario NDP announced that should the party win the 2018 provincial election, it would introduce a universal pharmacare program for all Ontarians that would cover 125 essential medicines to start.

Read: What does Ontario NDP pharmacare proposal mean for plan sponsors?

Liivet notes both the Liberal and NDP proposals focus on covering routine drugs while ignoring the high-cost medications that are putting pressure on plan sponsors and insurers. But she isn’t sure if the governments will eventually cover those medicines.

“I don’t know if they’ve got the wallet for them, especially if they’re going to pick up more of these routine costs,” she says. “Where is the money going to come from?”

The Canadian Life and Health Insurance Association declined to comment on the new program, saying it was too early to talk about the impact on business operations. “We are assessing the details of the proposal and look forward to working with the government of Ontario as they implement this new program,” said Susan Murray, vice-president of government and international relations at the CLHIA. Following the budget, Health Minister Eric Hoskins said the government would immediately begin working with insurers to ensure they pass cost savings on to employers and employees, The Canadian Press reported.

The budget also includes $73 million to increase publicly funded structured psychotherapy for Ontarians with anxiety, depression and other mental illnesses. The government will also fund Mifegymiso, the abortion pill Health Canada just approved in July 2015. Alberta and New Brunswick have also committed to publicly funding Mifegymiso.

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