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Headshot of Jeffrey Simpson. (Brigitte Bouvier/Brigitte Bouvier/For The Globe and Mail)
Headshot of Jeffrey Simpson. (Brigitte Bouvier/Brigitte Bouvier/For The Globe and Mail)

JEFFREY SIMPSON

Why we need a national seniors’ drug plan Add to ...

Ask any premier this question: Name the top five worries you have about future costs to your government. If they’re honest, everyone will include seniors’ drug costs.

The number of seniors in Canada is starting to rise as a share of total population. It’s 14 per cent today; in a decade, it will be 20 per cent, and heading higher.

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Seniors take drugs, lots of them. Eighty-five per cent of seniors take at least one drug; those over 75 take six on average. Drugs often do good things for seniors’ health, and can keep some of them out of hospital. So the demand for drugs is only going to go up.

The trouble is, as with health care generally, costs will rise, but the number of people under 65 in the work force is going to decline as a share of total population. So someone has to pay for the additional costs for seniors’ drugs.

Broadly speaking, there are three ways out of this pickle.

A government could drop some drugs from its formulary and/or increase seniors’ deductibles, at least for the better-off among them. Sit back and watch the fury.

A government could raise taxes and/or cut programs for those still working to pay seniors’ higher drug costs. Would that be fair to the next generation? Hardly, although if Canadians don’t rethink how they finance medicare (and pensions, among other programs), this option will become necessary.

Or the country could think about fairness between generations, in which case consider the Canada Pension Plan. We all understand the CPP and Old Age Security. We pay in throughout our lives. Employers pay, too, if we have an employer. The government chips in as well. When we reach a certain age, we get a public pension. That’s called a social contract between citizens and the state.

You can argue about the size of the pension and the contribution rate, but the social contract is: Pay now, receive a direct benefit later. It’s what we need for seniors’ drugs.

Otherwise, we’ll be dumping the increasing cost of seniors’ drugs on future government budgets. Those budgets will have to be financed from the share of the work force under 65 that will be smaller than today’s share. We need, instead, to prepare for tomorrow by grafting onto the CPP a national seniors’ drug benefit into which payments will be made today for defined benefits tomorrow.

You’ll say, not without reason, that the provinces will never buy in. They’ll stand on the sanctity, as they see it, of provincial jurisdiction over health care. And what has that sanctity brought? A hodgepodge of seniors’ drug plans across the country: different formularies, no co-ordinated buying, different coverage, different deductibles. Drug costs will differentially burden provinces depending on the age of their populations and their capacity to raise revenue. Ergo, Alberta might be fine, but New Brunswick will struggle.

What we should think about is a plan that stretches from Newfoundland to British Columbia, with a Quebec opt-out since that province already has a different drug plan for all citizens.

The federal government already approves drugs for sale from safety and medical perspectives. Rather than 10 provincial drug formularies, there should be only one – for all Canadians. One country, one buyer, as in every other country.

A seniors’ drug plan co-ordinated among provinces won’t work, because the criteria would differ province to province, and seniors move. It would have to be a national plan. And it would have to be paid for through social insurance.

You can hear the screams at the mere mention of the idea. A tax hike in disguise! Okay. But here’s the choice: We either pay for the coming costs of seniors’ drugs by higher taxes later, disproportionately on the next generation, or by social insurance contributions now. What you can’t expect is a free lunch.

A national seniors’ drug plan would be consistent with the spirit of medicare. It would have to be financed fairly and responsibly. Yes, there’d be a myriad of details to get right. But the future won’t be like the past. Will we be ready for it?

 

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