February 10, 2002

Extra Charges at the Pharmacy

Some pharmacies in BC are taking advantage of higher user fees on Pharmacare to sneak in even higher dispensing fees - fees that come out of the pockets of seniors and are not recognized by Pharmacare.

Pharmacare pays for over 6.3 million prescriptions per year for seniors. We will have to wait to see whether higher user fees results in a non-compliance problem. That is when a physician writes a prescription but it is never filled. For the time being we know of an immediate problem in the filling of prescriptions. Some drug stores are taking advantage of the higher $25 user fee ($10 for low income seniors) to sneak in extra charges.

Pharmacare will not recognize a dispensing fee of more than $7.80 as an eligible expense for reimbursement. Some seniors are reporting that rather than receiving a bill for $10 or $25 as expected with the new higher user fees, they are getting something like $26.20. That is because the store is tacking on an extra $1.20 making the dispensing fee $9.00. In determining whether a senior has reached the $275 (or $200 low income) annual maximum, those extra charges are ignored. The user fee is based on the total of the maximum dispensing fee recognized by Pharmacare plus the ingredient cost.

With 6.3 million prescriptions being filled for seniors, an extra $1.20 per prescription could mean over $7.5 million in extra charges being pocketed by pharmacies. The only way to stop this practice is for seniors to shop around to make sure they aren't paying something extra on top of the already increased user fee. No user fee for seniors on Pharmacare should be more that $25.00 - anything more is an extra charge by the pharmacy.

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February 9, 2002

Unraveling User Fees and Premium Taxes

Some seniors have reported that their Pharmacare user fee is $26.20 rather than the $25.00 announced by government. It turns out the extra $1.20 (or more) is going to the drug store for its dispensing fee. Last year the user fee was equal to the dispensing fee. This year the user fee is $25 for seniors who do not receive MSP premium tax subsidy and $10 for those that do. ON TOP of that user fee pharmacies can charge the amount that their dispensing fee exceeds the maximum dispensing fee allowed by Pharmacare ($7.80 previously $7.60). In calculating the $275 annual maximum for user fees the excess dispensing fees DO NOT COUNT (are not an eligible expense). Think of the extra $1.20 or whatever it could be as an extra bill from the drug store. Shop around because $25 should be the maximum - anything above that is gouging by the pharmacy!

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February 6, 2002

Income Tests for Pharmacare
$1,300 in bills for the losers!

In 2003 some BC seniors with very large drug bills could end up paying $1,300 per year compared to $200 last year and $275 this year. Of course, anyone needing that much in drugs would also be very sick. Before the Campbell government makes such dramatic changes to Pharmacare, it ought to put all the options government is considering for Pharmacare before the public for discussion and input.

Those who argue that benefits should not depend on age fail to see that seniors are different from younger British Columbians. Seniors have much higher need for drugs and they have much lower incomes with no further opportunity in life to make up for loses. One of the original reasons for creating Medicare to replace private health insurance was because private insurers kicked seniors off their plans. We appear to be going back to those bad old days as Pharmacare gets changed to reduce coverage when people need it most - when they get older.

Changes made to Pharmacare in 2002 suggest the next step that will be implemented in 2003. The charges to Pharmacare for seniors this year increased the user fee to $25 (or the full cost if the total cost was under $25). The annual maximum for all such user fees was increased to $275 (in 2001 it was $200) after which no further user fees are collected.

A further important change was made by splitting Pharmacare for seniors (Plan A) into two parts. The new second part applies to seniors who receive premium assistance. It suggests how a broader income test will apply starting next year. For 2002 seniors who receive Medical Services Plan Premium Assistance have a user fee of $10 rather than $25 and an annual maximum of $200 rather than $275.

The next step in 2003 might be to eliminate Pharmacare for all seniors who do not qualify for premium assistance and treat those people the same as someone under age 65. Pharmacare's Plan E (Universal) (pdf) does not cover the first $1,000 in eligible drugs for a family. After a family has reached the $1,000 deductible, Pharmacare will pays 70% of the cost of eligible benefits and dispensing fees. Once a family has paid $2000 as their portion, further eligible expenses in that year are 100% covered.

For Plan E patients receiving MSP Premium Assistance, the family deductible is $800. When a family has paid $800 as their portion, further eligible expenses in that year are covered 100%.

There is one enormous difference between most people currently covered under Plan E (universal Pharmacare) and those covered under Plan A (Pharmacare for seniors). Seniors are far more likely to have big drug bills. Cutting their coverage doesn't just make them subject to a theoretical risk that gets picked up by private insurance. Cutting coverage for seniors actually makes them pay more when they can least afford it and when they cannot get private insurance coverage.

The changes in 2002 were linked to MSP Premium Assistance. The MSP website describes premium assistance saying: "Regular premium assistance offers subsidies ranging from 20 to 100 per cent and is available based on an individual's net income (or a couple's combined net income) for the two preceding tax years, less deductions for age, family size and disability. If the resulting amount referred to as adjusted net income is $20,000 or less, a subsidy is available."

Applying for premium assistance requires the submission of a form (pdf). Family net income is the combined after income tax income of both spouses minus $3,000 for each person who is 65 or older minus a further $3,000 for couples and minus $3,000 for each disabled person (as defined for income tax deductions). A couple both over age 65 would therefore qualify for at least 20% off their premium if they had after tax family income of less than $29,000 or about $33,000 gross income. In order to qualify for 100% premium assistance, that couple would have to have after tax family income of less than $21,000.

The Pharmacare office could not tell me whether the current split in Pharmacare benefits for seniors requires full or partial premium assistance. The Campbell government should disclose what changes in income levels it is considering for determining eligibility for premium assistance and full Pharmacare benefits. That disclosure should come now, not just before Christmas and the January 1, 2003, implementation date.

Monthly Premium Rates for 2002 until April -
Click here for 50% information on 50% increase effective April 1, 2002

Five levels of assistance, based on adjusted net income for the previous year, are as follows:

 

Adjusted Net Income	Premium Rates	One Person	Family of Two	Family of 3 or more
$0 - $12,000	100% premium assistance	0.00	0.00	0.00
$12,001 - $14,000	80% premium assistance	$7.20	$12.80	$14.40
$14,001 - $16,000	60% premium assistance	$14.40	$25.60	$28.80
$16,001 - $18,000	40% premium assistance	$21.60	$38.40	$43.20
$18,001 - $20,000	20% premium assistance	$28.80	$51.20	$57.60
Over $20,000	Full Rate	$36.00	64.00	$72.00