National pharmacare poll ignores fiscal reality and alternative plans
One of the Trudeau government’s long-term policy ambitions, national pharmacare, received renewed interest late last year following the release of a poll by the Angus Reid Institute, which reported that 86 per cent of respondents support “the concept of having “pharmacare” in Canada—an indicator that most Canadians are ready for some sort of public pharmacare plan.
However, before proceeding with such a plan, it’s important to contextualize both the poll and potential approaches to national pharmacare within Canada’s difficult fiscal reality, and consider alternatives to an expensive national plan that may not even help Canadians who need it most.
First, the poll. Unlike the final report, the questionnaire did not explicitly attach a cost to the program and only seemed to provide information on projected savings. Moreover, when a one percentage point increase to the middle-income tax bracket was attached to the program, support for national pharmacare plummeted to 47 per cent.
More importantly, however, is the broader context. For example, under the most optimistic circumstances, the federal budget deficit is projected to reach $381.6 billion in 2020/21 with Ottawa’s unprecedented level of borrowing in response to the COVID-induced recession, both due to lower tax revenues and significant spending.
Other commitments made by Ottawa including a national daycare program, various green initiatives and stimulus spending up to $100 billion over three years will add significantly to the deficit. Cost estimates for national pharmacare, currently pegged between $15.0 billion and $32.7 billion, would require more borrowing.
Of course, large deficits lead to debt accumulation. And higher debt accumulation, all else equal, means higher debt interest costs that consume more and more government revenue. That’s money unavailable for important social services and tax relief. For this reason, it’s critical Canadians understand the alternatives to national pharmacare.
Consider that according to the same Angus Reid survey, 72 per cent of Canadians already have “most or all of the cost of their prescriptions covered by insurance and government support.” In fact, a much lower (though concerning) 23 per cent of respondents—particularly low-income Canadians—reported having difficulty paying for their prescriptions. And many of these Canadians may be unaware of established provincial plans that help low-income families pay for prescription medications.
In fact, every province offers drug coverage to social assistance recipients at low or no cost. Provincial governments also administer a variety of social programs to cover drug costs for the disabled and those with chronic conditions such as multiple sclerosis, cystic fibrosis and HIV.
Clearly, it’s worth asking whether the 44 per cent of Canadians who are concerned about their ability to afford prescription drugs in the future are aware of such programs. If they’re not, perhaps a first (and much less expensive) step would be for governments to do a better job educating residents about their existence.
It’s also worth noting that not all provinces share the same level of support for a national pharmacare plan. For instance, 37 per cent of respondents in Alberta—more than one-third—don’t want their provincial government participating in a national pharmacare program, likely because many Albertans simply don’t need it.
In Alberta, just about everyone under the age of 65 can enroll in the province’s Non-Group Coverage plan, where families pay $118 monthly premiums and 30 per cent of their prescription costs (up to a maximum of $25). Lower-income groups receive premium subsidies, seniors are exempt from premium payments (but still pay the 30 per cent co-pay), and other programs cover full cost for very low-income Albertans, the severely disabled and those on social assistance.
Again, it’s therefore worth exploring ways to improve existing provincial programs where necessary, as opposed to imposing an expensive one-size-fits-all program for the entire country.
Finally, there’s the broader question of whether issues related to affordability actually have more to do with the types of drugs covered than whether individuals are insured. For example, if a novel breakthrough drug is not listed for coverage (either on a private or public plan), individuals will likely have difficulty paying for it. Given that private insurers usually offer coverage for a greater number of drugs than government plans, it’s unlikely that an expanded government plan will alleviate cost-related issues.
Before citing the recent poll as a reason to move forward with a national publicly-funded pharmacare plan, the Trudeau Liberals—and Canadians more generally—should consider more efficient and effective alternatives, particularly given the country’s immense fiscal challenges.