On March 7, 2013, Alberta released its budget announcing a new pharmacare program to be implemented in the last quarter of 2013-2014. The new program will be funded partly through means-testing and through reduced prices for generic drugs, which will go from 35% to 18% of the cost of brand name drugs.
The pharmacare program promises to provide comprehensive access to drugs and supplementary health benefit coverage for all Albertans – a large gain especially for the 20 per cent of Albertans who currently have no drug coverage of any kind. Although many of the details of the program have yet to be determined, it appears that Alberta took a big step towards universal drug coverage.
Improved access, affordability, and of course, health
Universal coverage through pharmacare is a net new positive. Not only does it decrease administrative inefficiency and lower drug prices due to increased bargaining power, but it also ensures greater access to basic drugs and helps those who need the help most. As a result, more people will likely have access to drugs, especially those who are low income and financially vulnerable. Currently 740,000 Albertans don’t have any drug coverage.
The budget allocated $1.1 billion to drugs and supplemental health benefits, which is a $56 million or 4.7% decrease from 2012-13. According to the budget, this decrease is due to the expected savings from improved generic drug pricing and the pharmacare program, which will merge 18 different programs that currently help low income, disabled, and older individuals with their prescriptions and other health-related goods and services.
How pharmacare will impact seniors healthcare
The details of the program, including means-tested income thresholds, co-payments, premiums, and whether seniors will be included in the means-testing, have not yet been released. As a result, the true impact of the program on seniors will be difficult to verify until details are revealed. For now, Alberta seems to have recognized the importance of universal access to affordable drugs and has committed to taking steps to fill this particular gap.
With the right thresholds, income-tested pharmacare can keep drugs affordable and expand access to a wider range of people. Last year’s Ontario Budget, for example, announced means-testing on the seniors’ drug benefits. But with the income threshold set at $100,000 of net income for individuals and $160,000 for couples, CARP members polled expressed general acceptance of means-testing. CARP members who were surveyed were generally accepting of income thresholds above the OAS cut off to $100,000 or more. The fact that only 5% of the wealthiest of Ontario seniors would be means tested may also have swayed CARP members.
Universal coverage – A step in the right direction
In addition to the pharmacare announcement, the Alberta Seniors Benefit, an income-based program that provides support for eligible seniors in addition to federal benefits, will experience a $22 million, or 6.4% increase from 2012-2013, to a total of $358 million. Various programs such as seniors services, enhanced home care and rehabilitation, and services provided by health professionals will also receive $927 million this year.
Overall, Alberta’s budget appears to ensure greater access to health and benefits, especially for those who are most vulnerable, including low income Albertans and seniors. And this is a step in the right direction. As usual, however, the devil is in the details. CARP will continue to monitor the release of the details to the pharmacare program as it nears implementation.
Learn more about Alberta’s Budget.