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National Catastrophic Drug Insurance Revisited: Who Would Benefit from Senator Kirby's Recommendations?
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Abstract
The recent "Romanow" and "Kirby" inquiries into the Canadian health care system recommended a publicly funded catastrophic prescription drug insurance program to protect Canadians from potentially ruinous drug costs. While the Romanow commission was not specific about the nature of such a program, the Kirby commission recommended that household prescription drug expenses be capped at 3% of total household income, or 1,500perhouseholdmember,whicheverislower,withgovernmentpickinguptheremainder.Usingrecentsurveydataonhouseholdspending,weestimatehowtheprogramwouldassisthouseholdsofdifferentmeansandages,residingindifferentregionsofthecountry.Wefindthat,despitethefactthatseniorandlowincomenon−seniorhouseholdsaretheprimarybeneficiariesofprovincialgovernmentdrugplans,averagesubsidieswouldbeover4timeshigherforthesehouseholdsthanforallother(non−senior,non−indigent)households.Asmallpercentageofotherhouseholdswouldbeamongthelargestbeneficiariesoftheprogram.Programbenefitsaretypicallylargerinprovinceswithlessgenerouspubliccoverageandtendtobenefitlowerincomehouseholds.Programcostsareestimatedtobeatleast461 million annually, although reductions in out of pocket drug spending will reduce medical tax credits and thereby increase tax revenues by at least $80 million. Program costs appeared to be very sensitive to increased household drug spending that might result from the program introduction.drug insurance; prescription drug expenses