Do I need health insurance for prescriptions when I retire?

If you’re shopping around for insurance options for retirement, one of the items you may have looked into is coverage for prescription drugs. Here are some factors to consider.

3 things to think about when deciding how much coverage you may want for prescriptions

1) Your age and where you live

Every province and territory in Canada has a government drug plan. What’s covered by the plans, how much and for whom depends on where you live in the country.

There can be upper limits within government drug programs. The drug costs for some of our members, like those with diabetes, exceed those limits.

Also be aware that government coverage can change. While we hope it will only get better, there’s also the potential for certain drugs to be removed from coverage.

Drug coverage in Canada’s health care system

In Canada, health care is a provincial responsibility. So, there is a patchwork of more than 100 drug plans provided by the 13 provinces and territories.

These programs are aimed at groups such as seniors, low-incomes individuals or people with serious medical conditions. Each province also provides a supplement when the cost of medication far exceeds the patient’s ability to pay for it.

Retirees need health insurance for prescription medication because there are many hidden costs and gaps in our health care system. Public plans in Canada limit coverage through:

• Formularies – public plans provide coverage only for some medications, not all prescription drugs
• Deductibles – provinces may use income to determine a dedutible that must be paid before providing reimbursement, which may be required monthly (RamQ) or annually (ODB)
• Coinsurance/copayment – public plans may cover only a portion of the medication cost, and the patient pays the balance

Prescription drug coverage by province and territory

Alberta Prescription Drugs Program

• Program starts at age 65
• Patient pays 30% of medication cost, up to maximum of $25
• Coverage is based on a formulary, and there’s a limit to diabetic coverage

British Columbia Fair Pharmacare Plan

• Income-based program
• Coverage is based on a formulary
• You pay an annual deductible
• After the deductible is reached, you pay a portion of eligible medication costs
• Use the online calculator to estimate coverage

Manitoba Pharmacare Program

• Income-based program
• Coverage based on a formulary
• Use the online calculator to estimate what your deductible would be under the plan

New Brunswick Prescription Drug Program

• Eligibility based on age and income
• Coverage based on a formulary

Newfoundland Prescription Drug Program

• Coverage for residents 65 and over who receive Old Age Security Benefits and Guaranteed Income Supplement
• Includes dispensing fee
• Payor of last resort, which means the plan covers eligible costs when they’re not reimbursable by a third party

Northwest Territories Extended Health Benefits for Seniors Program

• Program starts at age 60
• Provides coverage for prescription drugs, as well as dental and vision care
• Coverage is based on a formulary

Nova Scotia Pharmacare

• Program starts at age 65
• Coverage based on a formulary

Nunavut Extended Health Benefits

• Program starts at age 65
• Coverage based on a formulary

Ontario Drug Benefit Program

• Program starts at age 65
• $100 annual deductible for most seniors
• Includes maximums for diabetes test strips
• Coverage based on a formulary

Prince Edward Island Seniors Drug Program

• Program starts at age 65
• Includes a pharmacy professional fee
• Coverage based on a formulary

Quebec RAMQ

• All residents of Quebec must have coverage either through the public plan or a private plan
• RAMQ is available to residents 65 and older

Saskatchewan Seniors’ Drug Plan

• Program starts at age 65
• Eligibility based on income
• Coverage based on a formulary

Yukon Pharmacare

• Program starts at age 65
• Includes prescription drugs, dental care, eye care and supplies and equipment
• Coverage based on a formulary

 Related: If equitable government drug coverage is something that matters to you, you might be interested in our advocacy efforts for universal public pharmacare as part of our National Seniors Strategy focus.

2) The purpose of insurance

While your health insurance will help offset the costs of things you plan for (for example, you might want to have a massage every month), the purpose of insurance is actually for those things you don’t plan. Usually, unplanned expenses come with a high cost. These can include things like:

• Medical treatment while travelling
• Medical aids such as hearing aids or mobility aids
• Prescription medication

We don’t plan to need prescriptions. We don’t intend to get sick or injured. In fact, we plan the opposite. We take steps to stay healthy. And we purchase insurance to give us peace of mind that we’ll be protected financially should something happen.

There is a common belief that prescription medications are fully covered by government programs after 65. The coverage isn’t really what people think it is. You might be shocked by how many medications are not covered by government plans. The point is, you might need more than you could imagine right now. And that’s the value and purpose of a group insurance program – we all pay the same thing, and the coverage is there for us when or if we need it.

3) The kinds of drugs you might want access to in the future

No government plan in Canada covers sexual or erectile dysfunction drugs (Viagra, Cialis. There medications are some of the most common claims through our plan. Again, we may not plan to need these drugs, but we could be planning to continue having sex, so the peace of mind might be nice!

Our extended health care plan includes a $3,400 annual maximum per person for all medications. We don’t have built in limits – you use the benefits how you need them. And we have an open formulary, which means our plan covers all prescription medications. That’s not the case with government plans and other plans on the market.

8 of the top 10 drugs not covered by government formularies

Eight of the 10 most popular prescription medications are not covered by government formularies:

Cialis

Dexilant

Jublia

Nexium

Shingrix

Viac injections

Viagra

Victoza

What else to consider when looking at health insurance for retirement

Bottom line – government drug programs in Canada are not comprehensive. You will be paying out-of-pocket for prescription medications in retirement without additional coverage such as RTOERO’s Extended Health Care Plan.

While it’s important to consider the points we’ve shared above, remember, prescription coverage is just one part of health insurance. Here’s a list of what to consider when looking at insurance options for retirement that may be helpful.

Learn about our group insurance plans for retired teachers, post-secondary workers and all other education sector retirees in Canada.