Plans for new programs are raising some very hard-to-answer questions

By: Bill Zolis

It’s hard to know what to make of the recent announcement from the federal Liberal government and the New Democratic Party (NDP) concerning universal pharmacare and expanded dental care programs for all Canadians.

The agreement raises a number of fairly obvious questions, and the first of those questions is, “Is this actually ever going to happen?”

Well, I can’t predict the future, and I have no plans to start a new career as a political analyst, but anyone who is knowledgeable about benefits programs and who has been paying attention to Canadian politics for the last twenty-odd years would have to be extremely cautious on this one.

Let’s look at what we know about the plan and the agreement so far.

The general idea on dental care is that the federal government will introduce dental care for low-income people, starting with children 12 and under. It will expand in stages to include children up to 18, then seniors, disabled persons and, finally, everyone. But there would be income-geared cutoffs – family income of $90,000 initially, with co-pays for families earning over $70,000.

On the pharmacare side, the idea appears to be to start with the National Drug Agency creating a national list of “essential” medicines that would be covered. (Supporters of pharmacare appear to be under the impression that bulk buying, with a single government agency responsible for the purchase of every drug in Canada, would greatly reduce the cost.)

Then there is the agreement itself. Note, however, that it is not an agreement to make pharmacare and dental care happen. It is an agreement in which the Liberals agree to begin the process of creating such plans, and the NDP agree not to vote against them in Parliament on matters of confidence. In other words, as long as the Liberals appear to be working on it, the NDP will allow them to stay in power – well, at least until October 2025, when the next election is scheduled to happen anyway.

That raises a whole list of other questions.

Can they make anything this big happen in a little over three years? The idea that the federal government could create two huge, new, multi-billion-dollar social welfare programs – with all the planning and logistics this would take, and – this is the big one – bring all 10 provinces on board, is just too much of a stretch for me to take seriously. (The premiers of both Ontario and Quebec have already brushed off suggestions that they might have any part of it.) So I’d say that if it happens, it will happen after the next election, and not as a result of a short-term accommodation between parties in the House of Commons today.

How badly do Canadians need new programs for drugs and dental care? Perhaps a better question would be, Who is currently missing out on essential services? As I discussed in an earlier blog on pharmacare, over 32 million Canadians are already covered to some degree by private or government drug plans. (The approximately 4 million people not covered are not, fortunately, the poor and disadvantaged, but tend to be the young and self-employed.)

Current private and public dental care plans are not quite as comprehensive. According to Statistics Canada, 64.6% of Canadians were covered by private dental plans as of 2018, as are members of First Nations, low-income seniors in most provinces and a patchwork of other groups across the country.

How much impact would a national pharmacare program have on “orphan drugs?” Orphan drugs, as we have discussed in this blog before, are very expensive drugs used to treat extremely rare diseases. It’s hard to say what would happen under pharmacare. The in-a-perfect-world scenario would be that all orphan drugs that are proven to be effective and shown to be the only treatment, would make it onto that list of “essential” drugs the Canada Drug Agency would prepare.

How is this different from the pharmacare the Liberal government promised in 2019? It was the central election promise during the 2019 campaign, though it’s impact on voters is debatable – the Liberals actually lost their majority status, don’t forget. By the time the 2021 election rolled around, all the focus was on Covid and the government stopped talking about pharmacare – which suggests to me, at least, that it is not seen as a core objective by the current government.

Where does the money come from? The answer I’m tempted to give on this one is, Don’t ask. Some early estimatesare suggesting a first-year cost of $15 billion. And these costs are just for people who are not currently covered by private or government plans – about 12% of Canadians in the case of drugs, and about a third in the case of dental. But these estimates do not appear to address the big selling point on pharmacare – orphan drugs and other expensive prescription drugs.

How would the government plans impact current private plans? We can say that there are two ends to the spectrum of possibilities, with 100% government control and prohibition of private services (as in medicine under the Canada Health Act) on one side, and supplemental government programs for the underserviced (such as the current Ontario Drug Benefit for seniors) on the other side. Talk of the Canada Drug Agency becoming the sole legal buyer of prescription drugs in Canada suggests that planners are leaning toward total government control, but other talk of serving people “not covered by existing plans” suggests that they are looking at providing supplemental services.

One question that has occurred to me, and that I’ve heard others ask, is whether providers should be investing in improving their plans and the systems for managing them. This one I think I can answer: Yes. Yes, we should continue, full speed ahead, with the development of our programs, and worry about the government taking over if and when anything looks like it might start to happen three or five or however many years down the road.

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I really appreciate comments, ideas, suggestions or just observations about the blog or any other topics in benefits management. I always look forward to hearing from readers. If there’s anything you want to share, please email me at bill@penmorebenefits.com.

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