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
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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