Ontario’s Drug Plan – A Canadian Outlier

April 3, 2012 – The 2012 Ontario budget calls on wealthy seniors to pay a larger share of their drug costs, in a move described as “fair and efficient”.  Ontario is currently among the very few provinces that do not have income testing on drug benefits. However, seniors in Ontario pay less for drugs than seniors pay in other provinces and will continue to receive some of the best coverage in Canada even after the income testing is implemented.

Income testing for seniors’ drug benefits will only affect individuals with more than $100,000 of net income or couples whose net income exceeds $160,000 per year.
According to the government, income testing is meant to “ensure the Ontario Drug Benefit (ODB) program is effective, properly administered and providing the most help to those in greatest need. The fairness of the program will be improved by asking the highest income seniors to pay more of their own prescription drug costs, while ensuring that these costs do not impose an unreasonable burden.”

About 5 per cent of senior ODB recipients will be paying more under this change.
And, based on CARP member polling, the government can expect to find general acceptance once it is clear that Ontario’s universal low deductible coverage is unique among all the provinces and the most generous.

The annual deductible – at present $100 – will increase to $100 plus 3% of the net income over $100,000 for a single person and over $160,000 combined income for a senior couple. The deductible increases to $700 for a person with $120,000 net income and to $3,100 for a person with $200,000 net income. Importantly, for any senior under the new threshold amounts, deductibles and co-pays will stay the same.

This is a deductible, not a premium as it is in other provinces, so a healthy senior who spends very little on prescription drugs will not be concerned with the new deductibles.

CARP members who were surveyed about income testing drug coverage were generally accepting of income thresholds above the OAS cut off to $100,000 or more. The limiting of the impact of the changes to an estimated 75,000 Ontario seniors, or less than 5% of Ontario’s 1.9 million seniors will improve that acceptance.

The changes will be effective beginning August 2014 to provide seniors
with time to adjust to the new system. Seniors will continue to get benefits under the ODB program by presenting their Ontario Health Cards at their pharmacies, where their pharmacists will be able to access the information they need to ensure that seniors are charged appropriately for their prescription drugs.

As is currently the case, seniors living in long-term care homes or receiving publicly funded home care will not be affected by these changes.

To Read more on changes to the ODB, click here

To read CARP’s backgrounder on provincial drug coverage, click here