Is ‘OHIP+’ really the best option for free prescription drug coverage in Ontario?

By Steve Paikin - Published on January 5, 2018
Ontario Premier Kathleen Wynne
The Wynne government's decision to extend prescription drug coverage to under-25s is good politics, but not necessarily the best policy. (Chris Young/CP)

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​Thanks to the Ontario government, this is going to be a happy new year for everyone in the province who’s under 25 years of age and needs medication, regardless of his or her family’s ability to pay for it.

One of the Liberals’ signature promises is called OHIP+, and though it was introduced with few details in last spring’s budget, as of January 1 it’s come into force.

That means if you’re under 25 and need any one of more than 4,000 commonly used prescription drugs on the province’s drug formulary, you can now get them free of charge. Finance Minister Charles Sousa’s budget ball-parked around $450 million as the cost of expanding this drug coverage. (For decades, the province has already covered prescription drug costs for seniors, those on social assistance, and others with extraordinary prescription drug needs. OHIP+ is the first big expansion in some time.)

“We are thrilled that OHIP+ is going to cover prescription medications for young people between birth and their 25th birthday,” Premier Kathleen Wynne said earlier this week in announcing the new program’s implementation.

Let’s not look a gift horse in the mouth. After all, who could be opposed to free prescription drugs for young people? Polls show it’s a political winner.

But let’s also get beyond the politics and ask some other, perhaps more relevant, questions. For example, what’s the actual goal of this pharmacare expansion? Would it have been better to cover fewer prescription drugs, but for all Ontarians, rather than more drugs for fewer Ontarians? Does universal access for people under 25 require taxpayers to foot the entire bill to achieve this? Or are there other, perhaps better, ways to ensure universality for this demographic, without taxpayers paying the whole freight?

These questions point to a debate that Ontario really hasn’t had, because of the surprise nature with which the Liberals introduced OHIP+.

For example, the New Democrats have suggested a different approach. The NDP would have made far fewer drugs available for free (about 125). But unlike the Liberals, they’d have made those drugs available to everyone, not just to those under 25. And some independent experts in the field say that if you crunch the numbers, that would have been a better way to go.  

“I actually believed and still believe that the NDP proposal to cover 120 drugs with strong evidence for all Ontarians was a better first step towards universal pharmacare,” says Michael Decter, a former deputy minister of health and one of the country’s leading health care analysts.

“I preferred the NDP approach,” says Helen Stevenson, who knows as much about this issue as anyone in the province. A former assistant deputy minister of health and executive officer of Ontario Public Drug Programs, she once oversaw the province’s $4 billion prescription drug program. She’s now the president and CEO of the Reformulary Group (which she also founded), a self-described “evidence-based formulary that promotes drugs that provide the best healthcare value.”

“The call to action should have been to people who don’t have coverage,” Stevenson says.

Decter, Stevenson, and others are questioning why the Liberals would want to bring in a new, expensive program aimed at covering young people, considering a significant majority of those under 25s were already covered by the private sector on their parents’ workplace drug plans, or by other special drug programs.

I asked Stevenson directly: “If you wanted to expand Pharmacare and get the best bang for your buck, helping the most people for the least amount of money, is OHIP+ what you’d have done?”

“Absolutely not,” she replied. “And I told the minister’s staff that, too. It’s shifting costs from employers to government unnecessarily. If you’re going to take on extra costs, it should be to cover people who didn’t have coverage and needed it, not cover people who’ve already got it.”

Stevenson just completed her own survey of the drug claims of 1.3 million Ontarians. Of that group, nearly 350,000 were under-25s, who are now covered by the province’s OHIP+ plan. Stevenson discovered that this group of nearly 350,000 spent $72.5 million on prescription drugs annually. Since there are actually 4 million Ontarians under 25, some basic extrapolating shows that if utilization continues at the same rate, the cost to government of paying for this group’s medications will actually be closer to $840 million annually — in other words, almost double what the Liberal government is currently projecting.

For what it’s worth, governments are notoriously bad at estimating the costs of prescription drug programs. I well remember Bill Davis’s government nearly four decades ago bringing in Ontario’s first drug benefit plan for seniors. The government estimated the cost at $50 million per year. Before long, it was more like $1 billion annually. An aging population and skyrocketing drug costs have a way of making that happen.

If private workplace drug plans already cover more than half of Ontario’s 4 million under-25s, why couldn’t the government have left those plans in place, then become the “second payer” for those not covered? That still would have covered all children and young adults, but at less than half the cost to Ontario citizens.

That approach is clearly favoured by the Canadian Life and Health Insurance Association. “We think we should have built on what’s been done and fill whatever gaps there may be,” says CEO Stephen Frank. “We’d have been happy to work on that with the government and still are.”

 A recent Conference Board of Canada study underlines the idea that the province should have only “backstopped” private drug plans rather than taken over responsibility for funding every single person under 25. According to the study, OHIP+ will cover 1.2 million people under 25 who didn’t have drug coverage, but also cover 2.1 million children and youth already covered by a private insurance plan. With the money it will spend covering that 2.1 million, the government could perhaps have provided coverage to the 614,700 Ontarians between 25 and 64 that the Conference Board says will remain without any drug coverage. (All seniors in Ontario are automatically enrolled in the province’s Ontario Drug Benefit.)

“The decision to assume the cost of drugs already covered for children by private plans onto taxpayers is the most puzzling aspect of the new program,” adds Michael Decter.

The Liberals’ OHIP+ may not be the most effective use of our public dollars. But politically, it’s almost certainly here to stay. The Progressive Conservatives opposed OHIP+ when it was introduced but admit it’s politically impossible to take something away from people once they’re accustomed to it. (That partly explains why a future Tory government would leave OHIP+ in place, according to the “People’s Guarantee,” the PC Party election platform.)  

Similarly, in the United States, witness the difficulty a Republican president, Senate, and House of Representatives have all had in eliminating Barack Obama’s Affordable Care Act. (They recently got rid of one significant aspect of the Act but left other important elements of Obama’s health care legacy in place.) Similar hopes to reverse George W. Bush’s massive expansion of prescription drug access through his Medicare Part D program have also gone nowhere, despite the desires of many cost-cutting Republicans.

Stevenson, who made a point of reminding me that she is scrupulously non-partisan, added that she would’ve preferred if the government had focused more on increasing its funding for free prescription drugs to people with rare diseases. “That would have resonated with so many Canadians who would want to help them,” she said.   

That kind of expansion is still possible for whoever wins the next Ontario election, in June.  But for better or for worse (or, more likely, for better and for worse), it looks as if OHIP+ is here to stay. 

Full disclosure: My wife is a volunteer for the Ontario PC Party. She co-chaired the health-care policy development process, some of whose planks are in the PC platform.

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