Why Prescription Drugs Are an Issue in Canada

By: Lilly Stevens

Canada is often touted as having one of the best health care systems in the world because of its universal health care model. There is, however, a major flaw in our system. Our universal health care system does not cover some essential medications. This flaw affects, in particular, vulnerable groups of Canadians who face challenges related to prescription drugs. These challenges, aka "the gap," can be divided into two groups: uninsured and underinsured. 

Who belongs to the vulnerable population?

Vulnerable populations include patients who are racial or ethnic minorities, children, elderly, socioeconomically disadvantaged, underinsured or those with certain medical conditions. 

The gap

The gap is essentially due to two main factors/elements: Canadians who do not have any form of whole life insurance that includes drug coverage (uninsured), and Canadians who have some form of whole life insurance that includes drug coverage, but still face financial challenges affecting their ability to access the necessary drugs needed to stay healthy (underinsured). 

In fact, one in 10 Canadians is unable to afford prescription drugs, which is not surprising considering Canada has higher prescription medication list prices than most other countries in the world. According to the Canadian Life and Health Insurance Association, access to prescription drug coverage in Canada is a mix between public prescription drug plans and private insurance plans. Public plans vary across provinces in terms of eligibility, affordability, and which drugs are covered.

How many Canadians are uninsured?

Data from a recent report by the Conference Board of Canada reveals approximately 5.2 per cent of Canadians are uninsured, mainly individuals in Ontario and Newfoundland and Labrador. This means that these individuals are not eligible for public prescription drug insurance, nor are they enrolled in a private insurance plan. However, the report also mentions that the percentage of uninsured Canadians decreased to approximately 1.8 per cent in January 2018, due to the introduction of the expanded Ontario Health Insurance Plan (OHIP). 

Even more alarming, there are more than four million Canadians that are eligible for either public or private life insurance with drug plan coverage but are not enrolled. Of surveyed Canadians who did not take their medications as prescribed, 54 per cent were not aware, and 3 per cent were unsure if there were public drug programs to help pay for prescription drugs.

Underinsured Canadians

While many Canadians may be fortunate enough to be enrolled in a public or private drug plan, there still exists the possibility of out-of-pocket expenses due to premiums, deductibles or co-payments, and even annual or lifetime caps. Depending on the plan itself, these out-of-pocket expenses can result in an individual not being able to afford the necessary prescription medications needed to stay healthy. The Canadian Health Policy Institute reported that the majority of the financial challenges faced by Canadians related to drug coverage were a result of underinsurance within existing public drug plans.

Drug plans across Canada

According to the Government of Canada, each provincial and territorial government offers a drug benefit plan for eligible groups. Some are income-based universal programs, and most have specific programs for population groups that may require more enhanced coverage for high drug costs.

These groups include seniors, recipients of social assistance, and individuals with diseases or conditions that are associated with high drug costs. 

Albertans, in particular, are fortunate in that the province offers several drug plans to accommodate different situations. From the Alberta Adult Health Benefit to Seniors Health Benefits to Specialized Drug Benefits, Albertans are encouraged to educate themselves and find out what drug plan coverages they may qualify for. 

The Fraser Institute published an article in October 2018 and outlined that in Alberta, families (with children) earning less than $39,250 can access the province’s non-group coverage plan by paying a monthly premium of $82.60. Prescription drugs covered under the program are subject to a 30 per cent co-payment up to a maximum of $25 per prescription. Higher-income families in Alberta can also access this program but with higher pre¬miums. Lower-income Alberta families, as well as a number of additional covered circumstances such as pregnancy, high ongoing prescription needs, and disability, are exempted from premiums and any co-payments for many prescription drugs as well as some over-the-counter products. For example, a single parent with one child in Alberta with an income less than approximately $26,000 would be exempt from the premium and co-pays under the Adult Health Benefit.

What does all this mean?

All in all, data supports that out of the total population of nearly 36.3 million people, over 13.1 million Canadians were covered under a public drug plan and nearly 23.2 million Canadians were covered under a private drug plan.

This is good news, but there are cases where you may need or want an individual life insurance and drug plan. Contact InsurEye for information, resources, and a free quote on this and any other type of insurance.