Health Insurance (Pharmaceutical Benefit) (General Provisions) (No 2) (Amendment No. 5) (Jersey) Order 2008 Report
Purpose of Report
The purpose of this Order is to abolish Health Insurance prescription charges with effect from 1st February 2008.
Background
The Health Insurance (Jersey) Law 1967 collects contributions (2% in total) from employers, employees and the self-employed and uses this money to pay for medical and pharmaceutical benefits and the administration of the Law. The money collected cannot be used for any other purpose.
Purpose of Charges
There is no definitive explanation of the purpose of prescription charges in Jersey but the policy has always been to keep them as low as possible to ensure more benefit reaches claimants. International and UK studies have highlighted several reasons for prescription charges;
- Raising revenue
- Influencing patient behaviour to avoid inappropriate use of medicines
- Increasing the public perception of a valued service as payment has to be made
- Influencing doctors’ prescribing habits to provide more efficient medicine usage
Current reviews of prescription charges in the UK have pointed to the change in primary care medicine and the shift from treating disease to the management of chronic illness through pharmaceutical products. The negative effects of charges as a barrier to efficient medication have been raised by the professions.
Setting Prescription Charges in Jersey
Prescription Charges are set under the Law by Order. The Minister consider rates of medical benefit and prescription charges annually and in setting the rates, has regard to the status of the Health Scheme as well as changes in the cost of living in Jersey.
Status of the Health Insurance Fund
The Health Insurance Fund is in a very healthy financial position and it is estimated that the abolition of prescription charges in 2006 would have cost approximately £2.5 million. Bank interest on the year amounted to just under £2 million. There would still have been a surplus of approximately £6 million (£8.48 million actual) on the year, and a fund equivalent to 2.72 (2.85 actual) years’ expenditure. Costs will be greater than this in future years in light of the increased numbers of pharmaceutical products recently added to the formulary and given that the prescription charge will no longer act as a barrier to medication. Even after allowing for any such increases, the fund will remain in a very robust position.
In summary, the Health system is currently in a very robust and buoyant state due to economic growth and changes in prescription costs. There is an opportunity to provide more financial assistance to those who use and contribute to the Health Scheme.
Summary and Conclusions
Those most vulnerable from the financial barrier which the prescription charge presents are, in particular, those with chronic conditions, but also those suffering acute conditions requiring multiple prescriptions.
The Health Insurance Fund is a contributory scheme from which all contributors expect to benefit, rather than a scheme established on a non-contributory means-tested basis and that therefore there is a strong argument that all should benefit equally from the scheme’s benefits proportionate to their clinical need as opposed to their incomes.
Recommendation
The Minister approved the Order amending Pharmaceutical Benefit) (General Provisions) (No 2) (Jersey) Order 2002. This new Order abolishes prescription charges within the Health Insurance Fund to £nil with effect from 1 February 2008.
Financial and manpower implications
The abolition of prescription charges will cost an estimated £2 - 3 million a year and there are no manpower consequences
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