Risk & Business Magazine R&B CMW Fall | Page 28

BENEFIT PLANS BY: STEVEN HESKETH, B.COMM, BY: GBA, LIZ WISEMAN, CFP, RPA, MANAGING SPEAKER & AUTHOR PARTNER, CAPRICMW BENEFITS DIVISION The Primary Threat To Sustainable Benefit Plans T he rising cost of prescription drugs is the single greatest challenge to the sustainability of most traditional benefit plans. This trend continues to escalate beyond all other Canadian healthcare expenses. In fact, Canada pays more for prescription drugs than almost every other country in the world, and it is the only country that has universal healthcare costs but not universal drug coverage. With necessary prescriptions beyond the financial reach of many Canadians, one in ten patients has stopped taking a vital medication, according to a study in the Canadian Medical Association Journal. In many cases, improving medical technology and the development of more sophisticated treatment drugs 28 have led to dramatic improvements in the available treatments for many health conditions. Yet these solutions are often only available outside of the public healthcare system, and their price tag can be simply unaffordable. It’s understandable for companies facing expensive, uncovered, pharmaceutical needs to wonder how their benefit plans can afford to cover recurring, catastrophic health claims. The result, employers fear, could be increasing premiums to the point where employers are forced to exclude or cap benefits, or even terminate drug coverage entirely. Employers wishing to provide good medical coverage for their staffs are truly stymied by these developments— and are desperately searching for a good solution. However, due to laws concerning privacy, employment standards, and human rights, the employer’s hands are often tied. Costs are driven entirely by the medical needs of the organisation’s staff and their families as well as by the evolving pharmaceutical industry itself, making it difficult for employers to avoid this challenge. In fact, plan sponsors need to accept the increasing probability that employees or their eligible dependents will require expensive prescriptions that could significantly improve their quality of life. Yet covering this expense could literally make your benefits plan unsustainable when it comes time for future renewals. Insurers have attempted to respond to this concern with the Extended