UNDERSTANDING PRESCRIPTION DRUG PLANS:
Pharmacists spend a phenomenal amount of time explaining drug plan details to their patients. Over and above the federal
and provincial legislation that governs the dispensing of medication by pharmacists, drug plans have a number of rules
and protocols as well. Here is an overview of how they work:
Private Prescription Drug Plans:
Private drug plan benefit levels and premiums are negotiated between employers and insurance companies, often
with employee or union input. The greater the premiums paid, the better the plan. Sometimes the full premium is paid by the
employer. Sometimes the employee pays a portion.
Group plans are available from your place of work or through various organizations (e.g. alumni, chamber of commerce etc.)
Benefit plans are also available for individuals without group coverage typically as part of a package including dental
benefits, life insurance and so on. The premiums tend to be very expensive and acceptance can be subject to various restrictions.
For example, diabetes is considered a "pre-existing" condition and a diabetic applying for an individual plan may
not have diabetic supplies covered as a benefit.
Reimbursement vs Pay Direct
- Plans may be of the "reimbursement" type in which the employee pays for prescriptions at the pharmacy then sends in the
receipts for reimbursement. Depending on the plan details, some items may not be covered or may only be partially covered.
Only your human resources or benefits contact can tell you if any particular drug product is covered. Keep
an envelope or shoe box handy at home or work to safely store your receipts.
- The plan may be "pay-direct." With this type of plan, the pharmacist submits the claim by computer at the
time the prescription is filled. The insurance company responds within seconds with the co-pay and/or deductible
amounts, coverage restrictions or eligibility errors.
- There are advantages and disadvantages to both types of plan.
- On some plans, the employee pays for the first few prescriptions before the plan kicks in. This is called an annual deductible
and is usually a set amount such as $20.00 per annum. It may be divided among family members such as $10.00 for each
of two people.
- The year may be a calendar year (i.e. January 1 to December 31) or a benefit year (such as the August to July benefit
year used by the provincial seniors' and Trillium plans).
- Usually, the employee pays a portion of each prescription. The co-pay may be a set amount such as $1.00
per prescription or a percentage, such as 10% of the cost of the prescription. Some plans calculate complex co-pays.
Where the plan does not reimburse the full cost of the prescription you may also have to pay the difference. Some
Cost Saving Measures
- Many plans pay only for generic drugs where available by law. You may usually pay extra to get the brand name version
if it is still in common use.
- Some plans limit the amount paid for the cost of the medication or the prescription fee.
- Some plans have two levels (tiers) of coverage. Generally, the co-pay is lower if your physician prescribes older,
less expensive or generic drugs and higher if your physician prescribes newer, more expensive drugs that are not available
- Limited formularies are popular as well. A number of medicines may not be covered because they are new and expensive or
unproven. There may be a mechanism available to have a particular drug covered under special circumstances.
- Rarely, a plan will subscribe to the concept of "therapeutic interchangeability." In this situation, the plan
will pay only for the least expensive member of a particular family of drugs. This type of plan is difficult to administer
effectively at the pharmacy level since most patients are stunned by the costs they would have to bear. Furthermore,
the physician is rarely available for a quick consult to change the prescription to a lower cost alternative.
- Sometimes employees are forced to purchase their prescriptions at specified pharmacies. There is debate as to whether
this is an ethical practice.
Employees are generally issued wallet cards as proof of coverage. For pay-direct drug plans, there is usually a separate
plastic (sometimes paper) card, specifically for the pharmacy, containing a special set of computer billing numbers. The billing
numbers for dental plans are usually different.
Green Shield, Ontario Blue Cross and Liberty Health are the three major insurance companies who deal directly with pharmacies.
Most of the others use intermediaries such as Assure, Rx Plus and ESI.
Provincial Drug Plan for Seniors:
The Ontario Ministry of Health administers drug plan coverage to eligible seniors in the community. They are trying to
keep drug costs down. Generally, drug coverage is limited to medicines listed in the provincial drug formulary. These are
usually older, well known and less expensive drugs.
Limited Use Benefits
- Some drug products may be covered if certain criteria are met.
- If you meet the criteria, your physician would have to accurately fill out the appropriate paperwork (an "LU" form) first.
- Coverage is limited to a maximum of six months to one year (depending on the situation) before it must be renewed. Some
drugs are covered only for 2 weeks, others for 6 months. Coverage is not retroactive. The paperwork must be accurately filled
out by the physician in order to be accepted by the government auditors.
- On behalf of their patient, a physician may apply to the Ministry of Health for coverage of life sustaining drugs
that are not normally covered.
- He or she must write a letter to the review committee for consideration.
- If the request is accepted, coverage is for a one year period only. If required, the application process must be repeated
yearly. Coverage is not retroactive.
Co-pays and deductibles
- Seniors in lower income categories pay $2.00 per prescription.
- Seniors in higher income categories pay for the first $100.00 worth of eligible prescriptions received on or after August
1 of each year then pay $6.11 per prescription for the balance of the year until the end of the following July when the
cycle repeats itself.
Ontario Provincial Drug Plan For Welfare and Disabled Clients:
- Coverage is arranged by the local Community Care Access Office.
- Single patients or entire families may be covered depending on the circumstances.
- Benefits on the plan are exactly the same as for seniors.
- Patients pay a flat $2.00 co-pay per prescription.
- Provincial drug plan coverage for those who do not have private or group benefits or do not qualify for other government
- Open to persons of any income level.
- Generally the entire family will be covered, each member using their own health card.
- May be used as a supplement to existing insurance.
- Arranged through the Ministry of Health. Call to have them send you an application. The application process is simple.
The eligible expenses, calculations and deductibles can be quite confusing.
- Annual deductibles (paid quarterly) are based on family income. The greater the family income, the larger the annual deductible.
A $2.00 per prescription co-pay is in effect for the balance of the quarter after the deductible has been paid.
- Benefits on the plan are exactly the same as for seniors.
- Once accepted, the patient takes his or her health card to the pharmacy. The pharmacist bills the government on-line and
the ministry automatically calculates eligibility, deductibles and co-pays.
Cardholder: The employee with the insurance plan
Spouse: The husband or wife of the employee and may include a common law or same sex partner.
Dependant: A child of the employee. It may include completely dependant "special needs" adults.
Overage Dependant: Children of the employee who are full time students and generally between the ages of 18 and
25 depending on the plan. Coverage is not automatic and must be renewed each September.