Last week’s Ontario budget announcements included a new health care deductible amount for seniors with high incomes.  This affects single seniors with incomes over $100,000 or couples with a combined income of more than $160,000.  Details are here:  http://www.cbc.ca/news/health/story/2012/03/27/toronto-ontario-budget-health.html .  The estimate annual increase in cost for prescription drugs for high income seniors is estimated at $665.

On the surface this may seem like a good idea – but I think it’s a real problem.  It’s easy to slough off this proposed change to the Ontario Drug Benefit (ODB) program because:

  1. It’s often assumed that high income seniors also receive drug benefits from their former employers.  This isn’t necessarily true.
  2. Finance Minister Dwight Duncan indicated that people of better means were especially on-side with a change to government benefit coverage.  This may be what he heard with his non-representative survey method – after all it’s the socially acceptable response if you’re wealthy and a politician asks your opinion.  But it may not be what people really want and the ‘survey’ results certainly cannot be considered representative of Ontario residents.
  3. There are wealthy people who will not be identified as high income because of their holding companies or other tax avoidance approaches (all legal).  Therefore the application of this ‘wealth’ penalty will be uneven.
  4. One exempt group are those receiving public home care.  I don’t see how these people will be identified.   Someone who has day surgery may require some home care.  For example, publicly funded home care will be needed in order to change surgical dressings.  Do one or two visits from a public health nurse exempt the high income senior from the deductible?
  5. How will this work for hospice or palliative care?  Some drugs are already paid for through these specialized services even for non-seniors.  Other non-palliative medications are typically funded by the individual.  In these cases, as in long term care and home care, there’s no indication that the deductible exemptions will apply for seniors.
  6. The Ontario Health Premium http://www.fin.gov.on.ca/en/tax/healthpremium/index.html increases in increments based on income level.  It’s unclear why this additional money for the ODB program is being implemented at a single cut-off point.
  7. Similar to point #6, it’s unclear why the ODB program change is being implemented at a single or household level whereas the Ontario Health Premium is at a single taxpayer level only.

Health care policy changes are typically difficult to understand and this one appears to be very complicated to administer.  The cost savings may not be worth the expenses to implement, manage and monitor.   Even more importantly, this change is a proverbial bandaid.  The aging of our population requires serious rethinking of health care in Canada.  We cannot afford health care as it is currently delivered.  Annual $665 per-wealthy-person fixes are not a solution.

Note:  Public revenues for Ontario are in chart 2.25 http://www.fin.gov.on.ca/en/budget/ontariobudgets/2013/ch2g.html#ch2_t2-24