Ontario’s current co-pay model for prescription drugs may potentially be causing unfair access to drugs due to affordability. The results of a recent study by Professor Sara Allin and others from the School of Public Policy and Governance, University of Toronto, have shown that seniors are sensitive to the costs of drugs and will adjust their medication use depending on their coverage. Seniors with greater coverage, such as private insurance, had higher usage of medication than those who had only provincial coverage, which may indicate that insufficient coverage will prevent seniors from accessing medication they need. This is especially notable since the Ontario Drug Benefit (ODB) is one of the more generous provincial programs in Canada. Seniors in other provinces are therefore more likely to encounter drug cost issues.
Seniors with greater coverage have greater access to medications
In Ontario, there are two groups of seniors who have greater coverage than the average senior: those with private insurance and those in the low-income public drug program. Among Ontario’s seniors, 27% have employer-sponsored complementary prescription drug insurance coverage and an additional 5% report having individual private drug coverage. The private insurance provides greater coverage by acting as a top up, covering drug costs beyond what is covered through the ODB program. The study found that this group used more medication and were found to have better health as well as higher income and wealth.
The study found that seniors in the low-income drug program also used more medication. Not only do they not pay a deductible, but they also have a minimal co-payment at $2.00 per prescription, which was usually waived by most pharmacists as the study found. The results of the two groups, regardless of very different socioeconomic and external factors, revealed a positive association between greater drug coverage and medication use.
Inadequate coverage reduces prescription drug use
Compared to the two groups above, the study found that those with less coverage limited their medication use due to the relatively high costs of co-payments and deductibles. Under the ODB program, seniors without private insurance and annual incomes above the $16,018 threshold for the low-income program, pay a $100 deductible and an additional $6.11 co-payment per prescription. Many seniors take multiple medications, and so the co-payments can easily add up and quickly become unaffordable. Not only are these individuals limited in their access to drugs, but the study found that these individuals are also typically poorer and sicker, and as a result, most affected by nominal changes to drug costs.
Provinces will need to ensure drug policies are fair and accessible to all
The overall results reveal that seniors are sensitive to the costs of drugs and unfortunately, the current co-payment model may be preventing some seniors from accessing the medications they need. Currently, private insurance is filling in the gaps for some individuals, and for similar reasons, CARP is advocating, against current practice, that employment insurance and benefits continue beyond age 65 for older workers. However, private insurance also has limitations, as it cannot address seniors who are already retired, cannot work, or cannot find employment with insurance coverage. So private insurance can help some, but it is not the solution to drug access for seniors.
Governments and policy makers appear to understand the need for a solution to provide better coverage for drugs in a more affordable and accessible way. We see provinces already moving towards lowering generic drug prices, as seen in Alberta’s recent budget announcement that promised to lower all generic drug prices from 35% to 18% of brand name drug prices. We hope that their momentum will only continue since all other provinces’ drug programs generally provide lower coverage than Ontario’s ODB.
May 3, 2013
Read CARP’s backgrounder on provincial drug coverage.
