Campaign for a National Drug Plan-Not everyone has drug coverage

Your drug plan at work …
and why we need pharmacare

Half the Canadian population — 16 million people — are covered by drug plans through the
work place. These work-based plans cover both employees and their dependents, and go some
way to filling in the biggest gap in Canada’s healthcare system — its lack of a national
pharmacare plan. But as medications become an increasingly important part of treatment for
many conditions, and their costs rise, this employee-benefit approach to insuring drug costs is
proving inadequate.

How good is this drug coverage?

It varies.Most drug plans at work are negotiated by unions for their members. In the best plans, the insurance premiums are paid by the employer and drugs are fully covered by the insurance
plan. But that model is rare. More than half of all workers contribute to the cost of the
insurance premiums through deductions from their wages. On top of that, most plans pay only
part of the cost of prescriptions, because of deductibles. Most workers pay a set amount
(usually about $50 or $75 per family member per year), before the insurance kicks in. A lot of
plans also require the worker to pay a percentage of the cost of each prescription — for
example, the drug plan may cover 80 per cent of the cost, and the worker pays the other 20 per
cent of every prescription.

Drug coverage is based on where you work, not medical need.

The benefits provided in negotiated collective agreements reflect a whole range of factors, like
the strength of the union, the state of the industry and the finances of the employer. None of
that has anything to do with people’s need for prescription drugs.
Work-based drug coverage is not secure.

If you move away, find a different job or get laid off, you lose your drug plan. In most cases
retirees are not covered, so if you retire, you also lose your drug plan. And when workers lose
drug coverage, so do their family members. Of the 16 million covered by work place plans, 7.6
million are workers, 4 million are their adult family members and another 4.4 million are their
children.

PUBLIC, ACCESSIBLE, AFFORDABLE, SAFE AND APPROPRIATE

Campaign for a National Drug Plan
Not everyone has a drug plan at work.
Almost half of Canadians (42 per cent in 2000) are not covered by work place drug plans.
Part-time workers and young people are less likely to have drug coverage and smaller work
places may find it too expensive to get a drug plan because insurance companies charge a much
higher administrative fee to cover small numbers of workers. Some workers who don’t have
their own drug plan are covered by their spouse’s plan, but many have no drug insurance.
Work-based drug plans are under threat.
Drug costs are rising rapidly, so insurance premiums are getting more expensive. Employers
looking for ways to cut their costs may react by increasing the share paid by workers or
reducing the coverage. Workers find themselves paying more for their premiums and more at
the pharmacy counter. This is leading to conflict at the bargaining table and strikes, as workers
struggle to protect their benefits.

We can do better than this.

Drug insurance based in the work place covers some people, some of the time. But it is limited,
arbitrary and insecure. It is a patchwork system — not based on need, but on where you work
or where your spouse works. Nearly every other industrialized country covers prescription
drugs under their public health care plan, and Canada should do the same.

We need pharmacare, a national drug plan.

Drugs are an integral part of health care and should be part of Medicare. A universal public
plan would provide equal drug coverage no matter where you live or work. It would be far less
expensive to administer than the thousands of different work-based plans and would have the
negotiating strength to bargain for cheaper prices with the drug companies. It makes medical
and financial sense to provide drugs to people who need them through a public system, not
haphazardly through the work place.

For more information, read the full report:

More for Less: A National Pharmacare Strategy (www.healthcoalition.ca/moreforless.pdf)

About the Campaign for a National Drug Plan
Pharmacare means a national drug plan that would be publicly funded and administered,
control costs, provide universal access and ensure the safe and appropriate use of drugs. It would cover medically necessary drug costs in the same way that Medicare now covers hospitals and physicians. The Canadian Health Coalition is a public advocacy organization dedicated to the
preservation and improvement of Medicare. For more information visit: www.medicare.ca