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Normandin Beaudry

Changes to the Quebec Prescription Drug Insurance Act

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There, in black and white

NB Bulletin Vol. 5 N. 4, May 2002

On May 8¸ the Minister of Health and Social Services¸ François Legault¸ tabled Bill 98¸ an Act amending the Quebec Act respecting Prescription Drug Insurance. The Bill was accompanied by a ministerial report setting out the data and considerations that led to the Bill.

The main impacts of this Bill on people insured by the public plan through the Régie de l´assurance maladie du Québec (RAMQ) were published in the newspapers several days before the Bill was tabled in the National Assembly:

  • Maximum annual premium increased from $385 to $422 per adult.
  • Maximum monthly deductible increased from $8.33 to $9.13 ($100 to $109.60 per year) per adult.
  • Maximum coinsurance (portion of the costs paid by the insured) increased from 25% to 27.4% (children insured by the RAMQ are exempt from coinsurance).
  • Annual maximum contribution increased from $750 to $822. The maximum contribution is the maximum amount payable by an adult¸ including deductible and coinsurance¸ for him/herself and any dependent children.

These increases represent a 9.6% hike in the current plan parameters. According to the Minister¸ it is based on an anticipated increase of 14.6% in plan costs in 2002-2003¸ to which the estimated savings that will be generated by various measures have been subtracted:

  • Ensure the collection of premiums from people covered by the RAMQ (estimated savings of $35 million). Bill 98 introduces a change in the Quebec Prescription Drug Insurance Act that allows the RAMQ to pass on information to Revenue Quebec so that the latter can verify the premium payable.
  • Improve the drug usage including the implementation of a partnership with the pharmaceutical industry (estimated savings of $90 million). However¸ although the pharmaceutical industry has confirmed that it will support the implementation of programs to manage treatment and optimize drug use¸ no agreement has yet been reached with the government in regard to the direct financial contribution from the industry which the government is demanding ($13.4 million).

Since private plans must offer conditions as generous as the public plan with respect to the coinsurance and the annual maximum contribution¸ the increase of the coinsurance from 25% to 27.4% and the raise of the annual maximum contribution from $750 to $822 could be apply by private plan.

For private plans that cover people who are also covered by the RAMQ (people aged 65 or over)¸ the impact of Bill 98 could be important. For example¸ if a private plan covers the difference between the coinsurance in the private plan and the public plan¸ the cost increase for the private plan will be significant. If a private plan has a coinsurance of 20% for example¸ the portion of drug costs paid by this plan¸ which is presently 5% (25% less 20%)¸ will rise to 7.4% (27.4% less 20%)¸ which represents a cost increase of nearly 50%.

In addition to the changes in the public plan parameters¸ Bill 98 contains other interesting elements. These include annual indexation of the public plan parameters (which could include the premium¸ deductible¸ coinsurance and annual maximum contribution) which will also have an impact on private plans. Starting July 1¸ 2003¸ the Bill provides for the public plan parameters to be indexed based on cost increases in this plan. The rules for calculating the indexation factors will be determined by regulation.

If the government follows the same logic used to calculate the 9.6% increase applicable on July 1¸ 2002¸ the increase on July 1¸ 2003 would be 15.7%(1). Coinsurance would rise to 31.7% in 2003¸ 36.7% in 2004 and 42.5% in 2005. Remember that the Montmarquette report¸ which proposed increasing coinsurance to 40% in exchange for abolishing the deductible¸ was criticized because its proposals were excessive. However¸ we cannot imagine that the government will follow this formula ad infinitum since¸ at an annual rate of 15.7%¸ coinsurance would reach 100% in less than 10 years.

The Bill also includes changes in how the list of insured drugs is established. This list¸ which constitutes the minimum that must be covered by private plans¸ will henceforth be established by the new Conseil du médicament. A committee will be set up to hear from stakeholders¸ including insurers. In addition¸ Bill 98 specifies that the terms of the "exceptional patients" program will also apply to private plans but the program´s management standards for private plans have not yet been defined.

A parliamentary committee will hold public consultations on the Bill. However¸ the new parameters are expected to come into effect on July 1¸ 2002.

 

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