The Trillium Drug Program, part 1: What’s happening now

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    In this four-part series, Patti Ryan explores the underutilization of Ontario’s Trillium Drug Program, why that’s occurring and how small businesses need help in getting catastrophic drug claims paid.

Many advisors say it’s a real head-scratcher how this has gone on so long, but it has: Millions of dollars in catastrophic drug claims over the years have been paid for through small businesses’ insurance plans when they should have been funded by Ontario’s Trillium Drug Program.

Recently, a Canadian Group Insurance Brokers seminar on the topic attracted some 275 attendees—three times the number who came out for a similar session just a few years ago. The key message, which is finally catching on, says Dave Patriarche, president of Mainstay Insurance Brokerage Inc. in Thornhill, Ont., is this: “For the past 20 years, every insurance company in Canada has processed claims for high-cost drugs in Ontario wrong.”

“They’ve done it to their benefit, not to the benefit of our clients, the employers.”

For the most part, nobody’s blaming Trillium. The problem, say those in the know, is that insurers are not integrating eligible high-cost claims with Trillium, but rather are paying them at the employer’s expense, continuing to put more claims in stop-loss pools when the province should be paying. Compounding the problem, too few small businesses are aware of Trillium, and are not educating their employees about it. Meanwhile, employers are looking for options, and some are feeling cornered into choosing short-term solutions that are not smart for the long term.

Why now?
One reason this is big news now is the recent arrival on the market of extremely costly drug treatments that may be needed by at least 1 in 100 Canadians.
Biologics to treat autoimmune diseases—such as Enbrel or Remicade for rheumatoid arthritis—have already made the issue urgent for small businesses, says Patriarche. The treatments can cost $20,000 or $30,000 a year, and it’s estimated that about 1 in 150 Canadians could be using them. (Biologics are are pricier than conventional drugs both to make and to administer.)

But the matter is even more pressing now that hepatitis C drugs are here as well. Revolutionary new treatments for hepatitis C offer a complete cure, but can cost as much as $125,000 per patient, and about 1 in 100 Canadians have the disease. The total cost to treat them all, says Patriarche, will be in the realm of $30 billion.

Hepatitis C is “a freight train coming,” says Tim Spark, president of RTM Benefit Partners in Toronto.

For small businesses offering health plans, the rising claims resulting from these new drugs are driving renewal increases to new heights because many insurers use an experience-based model where businesses with higher claims pay higher costs. This, in turn, is causing some owners to scale back benefit plans dramatically. Insurers have raised stop-loss attachment points from zero to $10,000 annually, and some are now discussing $15,000, says Patriarche.

No easy answers: In part 2, Patti Ryan will look at how educating all the players — employers, advisors and insurers — is key in stopping the trend towards more restrictive benefits plans and getting catastrophic drug claims paid by Ontario’s Trillium Drug Program.

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