The Burden of Prescription Drugs on Seniors: Reducing out-of-pocket Expenditures through Lower Co-Payments

The elderly are the most intensive users of healthcare including prescription drugs. Canadian provinces have responded with varying levels of support through senior drug plans that use cost-sharing measures such as co-payments in an attempt to find a sustainable balance between health objectives and budgetary constraints. While provincial co-payments have tended to migrate upwards over time resulting in a greater financial burden for seniors, Saskatchewan deviated from this trend in 2007 by capping its co-payment level. In an effort to provide evidence-based research to the ongoing policy discussion on best-practice approaches for this relatively vulnerable population group, this paper employs a Difference-in-Difference method within a Generalized Linear Model (GLM) to examine the impacts of the Saskatchewan policy change on out-of-pocket expenditure for senior household with a focus on impacts for differing segments of expenditure. The findings suggest the Saskatchewan policy change resulted in a decrease in out-of-pocket expenditures thereby lowering the financial burden for seniors. The results also show the expenditure savings largely accrued to seniors at the higher level of expenditure distribution and the policy change did not result in any significant change for households in the middle and lower quintiles.