Mandatory Universal Drug Plan, Access to Health Care and Health: Evidence from Quebec, Canada

This study estimates the effects of a mandatory, universal prescription drug insurance program in a public health care system with free physician and hospital services. In 1997 all residents of the province of Quebec, Canada, were required by law to have drug insurance coverage. Under this program, all persons under age 65 who are eligible for a private plan are required to join that plan and the public prescription drug insurance plan covers all Quebecers who are not eligible for a private plan. Using the 1994 to 2003 data of the National Population Health Survey and a difference-in-differences approach, we find that the mandatory program significantly increases drug coverage among the general population. The policy also significantly increases medication use and general practitioner visits but has little effect on specialist visits and hospitalization. Findings from quantile regressions suggest that there is a significant improvement in the health status of less healthy individuals. Analysis by drug insurance status before the reform and presence of chronic condition reveals that the probability of taking any medication and visiting a general practitioner increases more among the previously uninsured and those with a chronic condition, and the universal drug program produces positive health gains among the chronically ill.