Good news from the recent Alberta budget update

By on March 18, 2013

Good news from the recent Alberta budget update

 

The Alberta 2013 budget brought several changes to government-sponsored benefit programs that are expected to help employer group plans in Alberta.

Introduction of “PharmaCare”

The most significant change was the announcement of a “PharmaCare” program to be implemented on January 1, 2014 “to ensure drug and supplementary health benefit coverage for all Albertans”.

The new program will be income-based and may provide coverage for such supplementary benefits as ambulance, chiropractic and psychology services.  Details are not known.

The Minister of Health has been reported in the media stating that the new program will likely be similar to British Columbia’s PharmaCare Program. The BC program is structured on income-based deductibles. Employer group plans will continue to play a vital role as the majority of individuals will not accrue enough expenses in a given year to satisfy their deductible before government sponsored benefits apply. In addition, employer group plans will continue to provide important benefits as PharmaCare formularies are more limited than those provided through employer based group plans.

The B.C. model can be used as an example of how such a program might work. In B.C., a family with a net income of $60,000 would have to satisfy a yearly deductible of $1,800 in eligible drug expenses before PharmaCare would become available. PharmaCare would then pay 70 per cent of the cost for eligible products until an annual out-of-pocket maximum of $2,400 is reached upon which full coverage would be provided for the remainder of the year with no deductible.

If the new PharmaCare program is implemented as suggested, we expect this program could have a positive impact on group benefit plans by providing an additional measure of protection against extreme high cost drug products such as those for rare diseases.

Generic drug prices to be reduced
In conjunction with its 2013 budget, the Government of Alberta announced that it is reducing the price it pays for all generic drugs to 18 per cent of the brand name equivalent, down from 35 per cent. This continues the previous strategy of generic price reductions that began in 2009.

The potential impact of this change has yet to be evaluated.

Diabetes care enhanced
The provincial budget also includes an announcement that diabetes care will be enhanced through a new Insulin Pump program starting spring 2013 for Albertans with Type 1 diabetes. Albertans who are eligible will be provided 100 per cent coverage for insulin pumps and basic supplies. More information about this program will be announced closer to the implementation date.


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