Pharmacare is the drug benefit program for eligible Manitobans, regardless of disease or age, whose income is seriously affected by high prescription drug costs.
Pharmacare coverage is based on both your total family income and the amount you pay for eligible prescription drugs. The total family income is adjusted to include a spouse and the number of dependents.
Each year you are required to pay a portion of the cost of your eligible prescription drugs. This amount is your annual Pharmacare deductible. Pharmacare sets your deductible based on your adjusted family income.
The deductible ranges from three to seven percent of your total family income. The lower your total family income the lower the percentage.
The Manitoba Health Pharmacare letters should be arriving soon giving you information about what your Pharmacare deductible is for the 2019/2020 year; it’s based on your 2017 personal income taxes.
The Pharmacare year is from April 1 to March 31. So you begin to pay for your own prescriptions every April 1 and then when you reach your deductible, Pharmacare pays for the eligible prescriptions until March 31 the following year.
If you do not receive a letter, you may not have applied. I recommend every family apply now. You will need to at some point in your life (we normally buy more prescription drugs as we get older). You can find the application form on the Manitoba Pharmacare website; it is easy to complete.
Reduce Your Deductible
If your 2019 family income will be reduced by greater than 10% from your 2017 total family income, you can request the deductible be reduced. There is an application form to be completed and proof of your reduced income will be needed.
I help individuals and couples throughout the year complete this form and get it in to Pharmacare. So if your income in 2019 will be much lower than it was in 2017 or 2018, I recommend you complete the form and get it into Pharmacare as soon as possible.
The most common reason for a reduction in income is retirement, but it can also be semi-retirement (reduction in employment income) or other reduced income. Even in retirement, your income may drop if you no longer have RRSPs (Registered Retirement Savings Plan) or RRIFs (Registered Retirement Income Fund), or other sources of taxable income may have dropped.
You can send in the request to reduce your Pharmacare deductible any time, but the sooner the better.
Deductible Instalment Payment Program
Another little known fact about Pharmacare is the Deductible Instalment Payment Program. In some cases, a single prescription can be as much and sometimes more than a family’s annual deductible amount.
The Deductible Instalment Payment Program for Pharmacare helps reduce financial hardship for individuals and families whose eligible drug costs are a significant portion of their monthly family income.
The Payment Program is an option for eligible Manitobans to pay their annual Pharmacare deductible in monthly instalments. This option will give those who have high monthly drug costs compared to their monthly income a way to pay their Pharmacare deductible in interest-free monthly instalments as part of their monthly Manitoba Hydro energy bill.
The financing program is administered by Manitoba Health.The role of Manitoba Hydro is to withdraw monthly payments from your account with your bank or credit union for the bill payment portion of the program.
To be considered for the program, applicants and/or their families must:
First be enrolled with the Manitoba Pharmacare program;
Have eligible Pharmacare specified drug costs over a 30-day period that are equal to or above 20 per cent of their average monthly adjusted family income;
Have, as of the application date for enrolment in the program, reached or gone above their benefit limit for specified prescription drug coverage through another drug insurance or benefit plan; and
Pre-authorize Manitoba Hydro to make automated monthly withdrawals from their bank or credit union account to pay for their Pharmacare annual deductible by way of monthly instalments.
If your prescription costs are fairly high and you reach your Pharmacare Deductible fairly quickly, I recommend you check out the option of the Deductible Installment Payment Program. If you already have a Hydro account (pay hydro monthly) it will be added to your current bill. If you do not have a Hydro account (you rent and do not pay hydro yourself), you will need to apply.
If you need more information you can contact Pharmacare directly, or drop in to our office and see me (after April 30 of course!).
A quick reminder to get your taxes completed by April 30. Especially if you owe; you face penalties if you miss the deadline and you owe CRA. If you are expecting a refund, you can delay your filing. If you or your spouse are self-employed, you have until June 15 to file your taxes without penalty.
Don’t be late filing your taxes if you owe. The penalty is 5% of the amount owing plus 1% for each month you are late. And if it’s not the first time you are late, the penalties are even worse!
Even if you do not have all your info to file by the deadline, file it with estimated amounts. You can always adjust later.
Happy Tax Season!
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact us at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca