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Busby and Blomqvist - Here's a better plan for OHIP +

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From: Colin Busby and Åke Blomqvist

To: Charles Sousa, Ontario Minister of Finance

Date: August 4, 2017

Re: Here’s a better plan for OHIP +

With much fanfare, Ontario’s 2017 budget announced the introduction of universal drug coverage, starting next January, for those under age 25. True, a lack of drug coverage is an important gap in Canadian healthcare. But even with an annual starting cost estimated at $480 million, “OHIP+” looks like a poor approach while taking up limited fiscal room to close health gaps elsewhere.

The main problem is that much of the money will pay for the drugs of people who didn’t have any access problems in the first place. A more targeted approach could have a much larger effect on addressing the many unmet healthcare needs of Ontarians.

Ontario’s current patchwork of public drug plans covers social assistance recipients and their dependants, those who qualify for disability support, and those aged 65 and up. Private employer-based plans cover most workers and their dependants. Most of those without sufficient coverage are the so-called “working poor” – people in low-wage occupations without drug benefits – and the self-employed.

Most young people who will be covered by OHIP+ already have coverage through their parents’ insurance. Among those whose coverage will improve are mainly children of low-income parents without employer-based insurance and postsecondary and high-school graduates who no longer qualify as dependants.

The share of OHIP+ costs attributable to these groups is relatively small: Most of the $480 million will be spent to move youth dependants from private drug plans onto a public plan.

There are better ways to spend taxpayers’ money.

Instead of paying for the drugs of all young people, we could offer comprehensive drug coverage for children of low-income parents without private insurance, and for high-school or university graduates for a four-year period as they look for permanent work. This would free up money to extend more dental care services to low-income Ontarians and train more counsellors in communities where mental-health needs are the highest, while coming in under the OHIP+ price tag. That would be a more effective use of funds.

Further troubling about Ontario’s narrow approach is that the province staked a Pollyannish hope that greater federal intervention will extend OHIP+ into a universal pharmacare plan nationwide. This is an extension of the age-old political game played in Canadian healthcare. By clamoring for more federal funding, provincial politicians are trying to make people believe they can save money by paying more taxes to Ottawa and less to the provinces.

Ontario deserves credit for trying to improve access to prescription drugs. But insisting that all improvements must come through universal programs makes the exercise costly for governments – and risks leaving Ontarians with other serious health needs behind.

A more effective approach would be to create new, or extend existing, programs that target those who need access the most.

Colin Busby is Associate Director of Research at the C.D. Howe Institute, and Åke Blomqvist is adjunct research professor at Carleton University and Health Policy Scholar at the C.D. Howe Institute.

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