Health spending in Canada represents over 10% of the gross domestic product (GDP).
Despite the significant cost of health care in Canada, many patients aren't able to afford their prescriptions. Most Canadians rely on insurance coverage to pay for their prescriptions.
Complicated insurance policies are difficult to unravel. But understanding coverage of your prescribed medications is key to budgeting and maintaining your health.
If you're confused about prescription insurance, keep these 8 questions in mind.
Understanding Canadian Health Care
Canada's publicly funded health care system is Medicare. Medicare provides all Canadian residents with access to hospital and physician services. Canadians don't have to pay for these services out of their own pocket.
There is no national health insurance plan in Canada. Instead, each province and territory has their own health insurance plan.
In this system, provinces and territories manage, organize, and deliver health services according to the standards outlined by the Canada Health Act. On the other hand, the federal government takes care of:
- administering national standards as stated in the Canada Health Act
- providing funding through the Canada Health Transfer
- ensuring the delivery of health care to specific groups of at-risk or vulnerable people
The Canada Health Act also sets the rules for prescription drug coverage in Canada. Under this Act, patients don't have to pay for prescription drugs they're provided during a hospital stay. Once a patient is no longer in a hospital, that changes.
The individual governments of provinces and territories take over outside of the hospital. They administer prescriptions through publicly-funded drug plans. But these plans aren't available to the majority of Canadians.
This is what's known as the most serious flaw in Canadian health care. In most cases, Canadians have to cover their own prescription drugs costs. Some do this through private insurance, but others have no way to afford the prescriptions they need.
8 Questions to Ask About Your Prescription Insurance Coverage
Between federal and provincial drug programs as well as employee benefits and private insurance coverage, there's a lot to know about your prescriptions. There 8 questions will help you better understand how prescription insurance coverage works in Canada.
1. What Kind of Insurance Coverage Exists?
Between public and private insurance plans, most Canadians can access a degree of insurance coverage for their prescriptions.
Through the federal, provincial, and territorial governments, there's help available for paying your prescriptions. These programs vary across provinces and territories in terms of who they cover.
While no provincial or territorial insurance plan is the same, most cover certain groups of people. Typically, this includes Canadians who are in need. Need is determined by age, income, as well as medical condition.
Across Canada, most provincial and territorial pharmacare plans cover people on social assistance and low-income seniors. Many also provide some form of catastrophic coverage to help with drug costs that exceed a preset amount.
Canadians who don't qualify for these programs might have private health insurance. There are 2 categories of private insurance in Canada. These are employee benefits/group insurance or individual/personal insurance.
Employee insurance is private insurance provided through your place of work. You may also have coverage under your spouse's employee insurance. Individual insurance is health insurance that you sought out and purchased on your own through a private health insurance provider.
Insurance coverage for your prescriptions will depend on whether you're covered by a provincial or territorial program, your employer, or through private insurance. Canadians that aren't covered through any of the above may have to pay for their prescriptions out of their own pocket.
2. What Are the Criteria for Coverage?
Not every prescription is eligible for insurance coverage. In order to be eligible, you must meet the minimum criteria.
First, you have to obtain your prescription through a medical professional. This includes physicians, dentists, as well as psychiatrists.
Secondly, your prescription must be medically necessary to your health. Having a prescription from a medical professional verifies this fact.
Lastly, the drug you're prescribed must have a Drug Identification Number (DIN). While medical marijuana might not require a DIN, most other drugs do.
Keep in mind that even drugs meeting all of these criteria might not be covered by your insurance plan.
3. What Prescriptions Are Never Eligible for Insurance Coverage?
There are some prescriptions that won't receive insurance coverage.
Over-the-counter drugs are never covered by insurance. If you don't need a prescription to take it, you pay for it out of pocket.
Any drugs that you received while you were in the hospital aren't covered by insurance. However, you don't have to pay for these. They're covered by provincial and territorial health insurance and pharmacare plans.
Other than medical marijuana, a drug that doesn't have a DIN associated with it will not be covered.
4. What Drugs Are Always Eligible for Insurance Coverage?
There are some drugs that are never denied for coverage. Drugs that are used to control high blood pressure or hypertension are usually always covered. Similarly, medication for high cholesterol and insulin for diabetes are covered prescriptions.
Then there are the grey area medications. Sometimes these are covered and sometimes they're not, depending on your health insurance plan.
- New drugs or drugs that have recently been approved for public consumption
- Drugs to help you quit smoking
- Fertility drugs
Medical marijuana is a particularly complicated subject. While some employer insurance plans provide some coverage, it's not covered by most private health insurance plans.
5. Are There Maximums on Your Insurance Coverage?
If your primary health insurance comes from an employee benefits program, you usually don't have any maximum limits on drug coverage.
However, if you have private health insurance that you sought on your own, you likely do have maximums. These are set according to the calendar year and over your lifetime.
6. Are You Covered for Brand Name Drugs?
Most drugs have a brand name form and a generic form. The generic form is almost always cheaper than the brand name. That's why many health insurance plans won't cover the cost for a brand-name prescription if there's a generic form available.
7. Are You Covered as a Senior?
If you're over the age of 65, you're covered by your provincial health insurance program. That is, your province will pay for most of your prescriptions drug costs.
8. What Provincial Insurance is Available?
Each province and territory has their own unique health insurance plans. They also have special programs available for specific groups of people.
For a full list of these programs, check out this website. You may be eligible for coverage through one of these programs.
More Insurance Coverage Information
Prescription insurance coverage in Canada is provided by provincial and territorial government programs as well as private insurance plans. Private insurance takes the form of employee benefits or individual plans. Without some form of insurance, Canadians have to pay for prescriptions with their own money.
The world of insurance is a big one. Understanding health insurance, life insurance, and other forms of insurance take research. Check out more of our blog to answer all the questions you have about protecting your health, safety, and finances with the right insurance.