In our recent blog post, “Do Freelancers Need Healthcare Benefits,” we weighed the pros and cons of purchasing health and dental benefits independently. While our research shows that the advantages of paying for benefits typically shifts among demographics, it's clear that for people who regularly require prescription drugs, it is financially smart to invest in an insurance plan.
We are not the only ones to hold this view. Among the out-of-pocket medical services in this country, pharmaceutical care has been flagged as a “national problem” for many years now. Since 1964 – the year that the Royal Commission on Health Services called for the implementation of a pan-Canadian, universal drug program – politicians, scientists, economists and policy analysts have challenged the so-called equality of our country’s two-tiered medical system. These advocates advise that the government expand the healthcare system to include funding for prescription drugs.
While there is a lot of data that supports this view (for instance, consider the fact that Canada is the only country in the world with a universal medicare system that excludes coverage for drugs), a new study published in the Canadian Medical Association Journal (CMAJ) on pharmaceutical coverage has been making waves in the media for its unequivocal endorsement of a national program.
What makes this study so controversial? The authors debunk the commonly held view that national pharmacare is only possible with a tax increase. It claims the opposite, saying that a program of this kind would actually save Canadians “billions of dollars.”
During the election last year the question of pharmacare was in the public eye. Unfortunately, indent for the first time it has again fallen off the radar. To help you understand how the issue affects
freelancers, we’ve answered three fundamental questions about
What are the goals of a national pharmacare program?
Proponents of universal pharmacare may disagree about how the system should be reformed, but they do share a common goal: improving access to drug coverage. The research shows that pharmaceutical care in Canada is not designed to protect all strata of the population – rather, coverage disproportionally depends on “your age, where you work, and what province you live in.”
For freelancers in particular, this is a
cause for concern. While freelancers in Canada may be able to visit
doctors for free, when it comes to fulfilling prescriptions, many are
prohibited by their income or job status. According to PharmaCare 2020,
nearly 1 in 10 Canadians do not have the resources to pay for the
medication they have been prescribed. This number balloons among those
who don’t have health coverage: the stats show that Canadians without
benefits are “four times more likely to skip prescriptions because of
costs.” As precarious employment becomes increasingly common, and more
and more Canadians find themselves without a provider, the barrier to
access only stands to widen.
But how does universal pharmacare actually work?
In countries where there is a national pharmacare program in place, such as Britain or France, patients are either fully reimbursed for their prescriptions or are required to pay a fixed price for a pharmaceutical item. British patients, for instance, pay a standard co-payment of 7.10 pounds for a prescription. While it is up to policy makers to decide whether a similar system might work in Canada, the recent CMAJ study emphasizes the importance of shifting costs from the private to the public sector.
It is no secret that fear over a tax increase is a one of the main reasons why politicians of all stripes have resisted championing a national pharmacare program. What is so interesting about the CMAJ study is that it debunks the myth that including drug coverage in medicare would result in higher taxes. In fact, the authors of the study found that universal drug coverage would “save Canada $7.3 billion every year, with a 32 per cent reduction in overall spending on prescription drugs.” The annual cost of running the pharmacare system for the government would be “just $1 billion.”
The rationale backing these numbers is multifold but in principal, relies heavily on the notion of group buying power. As demonstrated by the UK model, consolidating the resources for pharmaceutical spending in a single national program – rather than a patchwork of public and private programs – serves to shift the balance of power away from pharmaceutical companies, which have unambiguously benefited from our current system, to the patients. Or as the Toronto Star frames it, “By concentrating the purchasing power of the entire country… Canadian authorities would have a much stronger bargaining position when ordering drugs from pharmaceutical giants.”
conclusion drawn here is not unfamiliar to freelancers, who by trade are
excluded from receiving discounted prices or benefits often enjoyed by
those in permanent positions. Inarguably there is strength in numbers,
and freelancers, almost more than any group in Canada, stand to gain
from the implementation of a national pharmacare program.
How does pharmacare affect employee benefits?
The authors of the CMAJ study paint a pretty picture for employers – the results indicate that national pharmacare would relieve the private sector from the burden of drug related plans, which cost employers billions of dollars a year. An article on the topic reports that “Employee benefits now represent more than 10 per cent of gross payroll, and drugs represent the highest single benefit cost component.” Furthermore, a survey conducted by the Conference Board of Canada reveals that the cost of supporting permanent hires remains a “very important issue” for employers.
For anyone struggling to upgrade their temporary, contract or part-time position into a permanent role, this data is most likely familiar to them. Employers are often the first ones to admit that current economic climate does not lend itself to the establishment of permanent positions – the cost containment for many businesses is simply untenable. The trickle-down effect of a national pharmacare program is obvious then: with lower labour costs resulting from drug coverage, employers would have a new set of resources to direct towards job creation.
Perhaps most exciting about a national pharmacare is that the benefits of such a program are so far reaching – reforming pharmacare will not only improve health equity, it will transform the way we conceive of and administer employee benefits. For freelancers or those of us working in precarious positions, accessible drug coverage could be the game changer that we’ve been waiting for.
We encourage you to participate in the growing conversation about pharmacare in Canada – now is the time to begin rebuilding a safety net for workers!
To learn more about the advantages of reforming medicare in Canada to include drug coverage, we suggest that you visit Pharmacare 2020 and Pharmacare Now. You can also get the ball rolling by signing a petition over at the Canadian Association of Community Health Centres.