Posted February 5, 2016
The government’s process for communicating changes to seniors’ Pharmacare has been unfortunate, to say the least. It started with a news release on Jan. 15th.
“Changes to the seniors’ Pharmacare program mean Nova Scotians enrolled in the program will soon pay less each time they pick up a prescription.
Starting April 1, Seniors’ Pharmacare members will start paying a 20 per cent co-payment for each prescription, down from 30 per cent, to a maximum co-pay of $382 a year.
The changes also mean that seniors with lower incomes are no longer expected to pay the same premiums as those with higher incomes.”
Sounded like good news all around. “When we can have 12,000 more be exempt from the premium, that’s a very, very good day,” said Health and Wellness Minister Leo Glavine.
It turned out that some members will be paying a lot more than they do now, increasing from $424 to as much as $1,200 per year, and that other changes would mean that some low income seniors receiving the Guaranteed Income Supplement would begin paying premiums. Both the opposition and the media demanded more information, but the government at first resisted providing financial projections.
Almost two weeks after the original announcement, on Jan 28th, the government caved in and provided forecasting models that should have been freely available from the outset.
Before the policy changes, the $424 maximum premiums covered only 32% of the average per person cost. The new maximum premium of $1,200 could in theory cover more than 85% of costs. If everyone stayed in the program, the government would be $10 million better off in the first year—an amount that would gradually reduce as drug costs grew, while premium rates stayed the same.
In practice, this will not happen. Healthy seniors will drop out if their drug costs are less than the premiums they are asked to pay. The only ones who will be willing to pay $100 per month will be those with chronic conditions, like diabetes, with ongoing costs that are much higher.
So, as a practical matter, the government may experience less fiscal benefit than anticipated. Regardless, rising drug costs will mean that premiums have to rise periodically.
In the meantime, the changes have upset a great many seniors. The total contributions from the 75,000 who are continuing to make contributions will rise by $10 million, plus the cost of eliminating contributions for 12,000 low income seniors. A lot of middle income people are negatively affected.
The government was dealing with a program that was unsustainable in its present form. In principle, asking higher income people to pay more makes sense, but not if the level is so high that it creates mass defections from the program. Decreasing the copayment from 30% to 20% up to $382 was not a good choice for a program under fiscal pressure.
The government was seeking a response to a difficult problem, and has made choices that negatively impact a lot of people. Trying to position the changes as a good news story was a mistake.
The changes were imperfectly designed, and the initial communication was deceptive.
The real casualty in all this is the government’s credibility. For our health care system to be sustainable will require substantial and difficult changes. For them to succeed, Nova Scotians will need to feel that the changes have been well considered and honestly communicated.
Because of the Pharmacare experience, government may face a more skeptical audience for future announcements, no matter how well considered. The government has demonstrated the courage to make tough but necessary choices in many areas. Packaging them as good news is a mistake.
The right way to do it is open communications about the challenges and the impact of the possible responses before a decision is announced.
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