Ontario budget: Children and Youth Pharmacare
Under the heading “Helping Parents”, the 2017 Ontario Budget has introduced OHIP+: Children and Youth Pharmacare (OHIP+), proposing free prescription drug coverage for four million children and youth aged 24 and under in Ontario.
OHIP+ is the first program of its kind in Canada and would be provided without an earnings test to reflect the Ontario government’s commitment to ensure equal access for all families requiring drugs for their children to be healthy and to thrive. A successful introduction of OHIP+ may pave the way for Universal Pharmacare in Ontario, with those aged 25 to 65 as the remaining, yet significant, gap in coverage.
If approved, OHIP+ would be effective January 1, 2018, and would provide coverage for the 4,400+ medications covered under the Ontario Drug Benefit (ODB) program, which includes treatment for acute and chronic illness, as well as certain pediatric cancers. There would be no out-of-pocket expense for drugs covered under the ODB, meaning that no deductible or co-payment would apply.
A quick review of the needs of those expected to be covered can be categorized in the following stages and most likely prescription drug needs, which we believe to be well represented under the ODB formulary:
- For the early years: diaper rash and oral thrush, ear infections and viral infections, probably the most common reasons to seek medical attention;
- For elementary school ages: asthma, ADD/ADHD, and seizure control, likely the most prevalent in the elementary school ages;
- For high school ages: acne, allergy medications, birth control, antibiotics;
- For young adults: muscle relaxants, NSAIDS, antidepressants, anxiety drugs.
Most group health benefit programs define a dependent child as someone who is under age 21, or under age 25 if in full-time attendance at an accredited institution, and the implementation of OHIP+ could mean significantly reduced drug claims under these programs. Prescription drugs typically represent the lion’s share of costs for these plans and it is anticipated they will act as a supplementary plan to the first-payor OHIP+ if it is implemented.
Cancer treatment and medication provided inhospital are currently covered by OHIP, with private group health benefits programs, including employersponsored plans, typically providing coverage for at-home cancer therapies. It is uncertain at this point if additional cancer treatments would be available under OHIP+ and further clarification is required to determine if OHIP+ will mitigate the continuing and significant increases in charges for individual high amount pooling under group health benefits programs, driven by costly specialty drugs including cancer therapies in the past.
It also remains to be seen what coverage would still be deemed necessary for Student Health Plans or other such type of plans outside of OHIP+.
What is also uncertain is how the insurance industry will respond to these changes as the Provincial Health Department staff could not give any indication of the commitment from the insurance industry, and how the ODB benefits payments would be coordinated with private plans. Plan sponsors can expect savings from this new coverage under the ODB formulary, probably with any renewal period on or after January 1, 2018.
The availability of specific data for each of plan sponsor’s experience is paramount to ensure that reduction on ongoing costs as well as postemployment benefits liabilities, be passed onto them. Further analytics to identify key cost drivers for plan sponsors may help inform them of modifiable risk behaviours and determine targeted wellness intervention to help better stave off health cost increases. More details should become available in the near future.