Drummond report: Turn Ontario Drug Benefit into income-tested program for all

This article was published by the Toronto Star February 15th 2012.  To see this article and other related articles on the Toronto Star website, please click here.

In tough fiscal times it probably makes sense to scrap Ontario’s prescription drug program for seniors in favour of an income-tested benefit for all low-income residents, seniors’ advocates and social policy experts agree.

The Ontario Drug Benefit, which covered more than 4.3 million Ontarians on welfare and over age 65 last year, cost almost $4.1 billion. Benefits to seniors accounted for about $2.7 billion of that.

“When you are looking at fiscal constraint, you really do need to target public support to those who need it the most,” said Susan Eng, of the Canadian Association of Retired Persons (CARP), an advocacy group for those over age 50.

“Ontario has one of the most generous (prescription drug) programs and there are wealthy seniors who are eligible and . . . those seniors themselves have said to me that they don’t think it is a wise use of public dollars,” she said.

“If (changing it) means we can expand it to other low-income groups, not just those on welfare, it would be a big improvement,” she said. Combined with other health-related cost-saving measures in the report, it could be the first step toward a new pharmacare program for all Canadians, she added.

Numerous studies have suggested the province provide drug benefits to low-wage workers, noted social policy expert John Stapleton said

In the context of welfare reform and social changes to help low-wage workers, “this recommendation is obviously moving in the right direction,” he said.

“It doesn’t make sense for wealthy seniors to get every cent of their drugs paid for while someone working in a poverty-level job gets no access at all,” he said.

But if there are savings from the change, Stapleton said he hopes the funds would used to extend dental benefits to low-wage workers.

Calling the seniors’ drug benefit “very expensive,” the Drummond report suggests introducing co-payments geared to income for seniors, to save between $300 million and $1 billion annually. Alternatively, the government could remove the link to age and welfare status and turn it into a benefit for all low-income Ontarians.

The second, preferred option, “would greatly strengthen the equity of the program,” the report says. “It would also remove a large brick in the so-called ‘welfare wall.’”

Currently, someone on welfare who returns to work loses the Ontario Drug Benefit. For an individual or family with health conditions requiring prescription drugs, losing the benefit could be a disincentive to taking a low-wage job.

Although large savings would be more difficult to extract under an income-tested program available to all, the report says it should be possible to come up with a cost-neutral design.

The benefit would be enhanced equity and less disincentive for those on welfare to enter the workforce, it says.

Still, some anti-poverty advocates are uncomfortable supporting a scheme that requires taking away benefits from one group to support another.

“In the context of lousy, low-wage work with no benefits and no job security, extending drug, dental and vision benefits to all low-income workers is good social policy that government should pursue,” said Jennefer Laidley, of the Income Security Advocacy Centre.

“However, we’re not interested in having to make choices about taking it away from some people and giving it to others. That’s the problem.”