WHAT IF: Social insurance could pay for prescription drugs?
What if social insurance could pay for prescription drugs?<br />Sara Allin<br />Report co-authors: Mark Stabile andCarolyn Tuohy<br />
What is the problem?<br />Unlike most high-income countries, prescription drugs are not universally covered under the health care system in Canada<br />Why is a medically necessary form of healthcare publicly insured in hospitals, but not otherwise?<br />
Possible policy option? <br />Raising revenues through a social insurance model could be a possible way to achieve universal coverage of prescription drugs<br />
What is social insurance?<br />A method of raising revenue<br />Contributions are usually related to salaried wages (and are always independent of risk)<br />Contributions may be shared between employers and employees <br />Revenue is earmarked for health care<br />Collection agent is usually arms length from government<br />Participation is mandatory (for the population or specified groups)<br />
What are the potential benefits?<br />A universal system addresses equity concerns arising from the current fragmented financing model<br />Increased transparency with links between revenues and benefits could be more politically acceptable than general tax increases<br />A diversification of the public system’s funding stream may increase public willingness to pay for rising health care costs<br />
What are the challenges?<br />Concerns with financial sustainability among SI programs that draw only on employment income<br />Unless there is a single collection agent/risk pool, sophisticated risk adjustment mechanisms are needed to reduce incentives to select risks<br />Regulation is vital to ensure universal coverage and standard benefits, and to integrate private (commercial) and not-for-profit insurers<br />