Drug insurance plan: Let’s cover those who can’t afford to pay

Montreal, February 8, 2019 – The MEI welcomes the news that Ottawa is expected not to go forward with a completely public national drug insurance plan that would make the government the sole insurer and prevent workers who want to continue to enjoy their current coverage from doing so.

“The government would be right not to go down the state monopoly path and to preserve the current mixed public-private model administered by the provinces,” argues Michel Kelly-Gagnon, President and CEO of the MEI. “Although the idea of a government monopoly has gotten some traction with some people in recent years, the MEI has long maintained that such a plan would penalize Canadians who already have coverage by removing their freedom of choice.”

Indeed, the argument often raised in favour of implementing a state monopoly in Canada is that it would give the government greater negotiating power with pharmaceutical companies, which would supposedly allow for better control of drug costs. But what the proponents of such a plan don’t say is that the savings would be essentially obtained through rationing and reducing the number of drugs available, not through greater efficiency.

“Canadians must know that state coverage would certainly not be as generous as the coverage currently offered by employers through private insurance,” explains Mr. Kelly-Gagnon. “Moreover, if access to drugs is broadened through monopoly government coverage, it will inevitably cost taxpayers more money. Indeed, the former Parliamentary Budget Officer already foresaw substantial tax increases to fund such a program.”

According to the same former Parliamentary Budget Officer, 10% of Canadians cannot afford their medication.

“Ensuring that everyone can receive the care and the drug insurance coverage they need is a legitimate concern. But this need can be met through targeted assistance to this portion of the population. And precisely because it is targeted assistance, it will be easier, in terms of the budget, to provide them with adequate and even generous coverage,” points out Mr. Kelly-Gagnon.

The current mixed public-private system works for the very large majority of Canadians, who are very satisfied with the coverage offered by their employers through private insurers. And while Canadians want to improve access to drugs for all, a recent poll showed that 90% of them were opposed to a national policy that would threaten their current group plans. “Clearly, Canadian workers are not ready to accept drug insurance coverage that is of lesser quality than what they presently enjoy,” concludes Michel Kelly-Gagnon.

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The MEI is an independent public policy think tank. Through its publications and media appearances, the MEI stimulates debate on public policies in Quebec and across Canada by proposing reforms based on market principles and entrepreneurship.

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Interview requests: Pascale Déry, Vice President, Communications and Development, MEI. Tel.: 514-273-0969 ext. 2233 / Cell: 514-502-6757 / Email: pdery@iedm.org