Drug Program Enhancements
In
October 2007, Newfoundland and Labrador implemented a new
income-based program to make
prescription drugs more
affordable. Residents who earn less than $150,000
annually are eligible for the Newfoundland and Labrador
Prescription Drug Program
(NLPDP). For eligible
residents, out-of-pocket drug costs will not exceed
10 per cent of net family income. The
NLPDP is the payer of
last resort, meaning that once an
individual’s
income-based deductible is met, the NLPDP
will pay for any drug
claim amount over the private
plan payment. There is no
anticipated rate impact to plan sponsors.
Highlights of Newfoundland Assurance Drug Plan
On October 31st, 2007 the Newfoundland
Assurance Plan became effective. Again,
the purpose is to offer protection against the financial
burden of high cost drugs (whether it be from the cost
of one extremely expensive drug or a combination of
different drugs) for individuals and families with lower
incomes.
Here are
some details about the design:
-
Eligible
if a Canadian resident residing in Newfoundland and
Labrador
-
People with private insurance may still be eligible (for
example, products
covered by this Assurance Drug Plan that are not covered
by a private plan
may
benefit or whereby a plan design has an overall cap on
drugs).
-
Successful applicants will receive a drug card which
they present to the
pharmacy
for on-line adjudication
-
Co-pay
will be reassessed every 6 months
-
Program covers most drugs that require a prescription,
plus a small number
of over-the-counter items that do not legally require a
prescription. Based on
the
existing NLPDP formulary.
-
Depending on their income level, individuals and
families will be assured their annual out-of-pocket
eligible drug costs will be capped at either 5, 7.5 or
10% of their net
family income (line 236 of CRA Notice of Assessment).
Maximum
eligible drugs costs are defined only by those drugs
covered by the province’s Assurance Plan.
-
Households with net incomes up to $39,999 will pay a
maximum of 5% of
their
net income for eligible drugs
-
Households with net incomes ranging from $40,000 to
$74,999 will pay a
maximum
of 7.5% of their net income for eligible drugs
-
Households with net incomes ranging from $75,000 up to
$149,999 will pay a
maximum
of 10% of their net income for eligible drugs
-
Premiums paid for private health insurance do not count
against your out-of-pocket
expenses
Example: For a net annual income of $35,000:
$35,000 x 5%= $1 750 (Need to have spent at least this
amount out-of-pocket in
drug expenses for eligible products in the province’s
formulary over the last 12
months to
qualify)
The co-pay is determined by dividing the 5% of the household
net income by the
total drug expenditures of the last twelve months. So if,
for example the total
expenditure
is $2 500 the co-pay would be determined as follow:
$1 750
=
70%
$2 500
Therefore, in this example the patient would pay 70% of the
total drug costs at the
pharmacy.
Note: If the patient has a private plan, say for this
example 80% coverage, then
their total annual drug costs would have to be $8,750 to
qualify for the program
($8,750 x
20% co-pay = $1,750 out-of-pocket).
Highlights of the Application Form
The two key points to the application are the basic personal
information on all family
members, including children living with you under the age of
18 or aged 18 to 20
and still attending high school. And either a pharmacy
printout or a statement from
the insurance company showing last years (12 months) total
family drug costs must
be attached
to the application. This number will be used to determine
the co-pay for the next 6
months. If not currently purchasing the medication(s)
prescribed, alternate information is required
In having our pharmacy consultant team examine the formulary
there are indeed
differences between the province’s plan and that of the
standard formularies typically
offered by
employers for their employees. Details are available upon
request.
Mandatory Retirement
As
of May 26,
2007, provincially regulated employees
are no
longer required to retire solely because they
have reached age 65. The elimination of
mandatory retirement does not affect any age 65 restrictions
in employee benefit plans.
