Between 1970 and 1986 all Canadian provinces introduced some version of a prescription drug subsidy for those age 65 or over and since 1986, all the provinces have increased copayments or deductibles to some degree. Employing a first-order approximation to the welfare gains from a subsidy, we find evidence that these subsidies have been less redistributive than an absolute per household cash transfer but slightly more redistributive than a transfer that would increase each household's income by the same percentage. Such evidence may have relevance for predicting the redistributive effects of a potential national prescription drug plan for seniors in the United States.
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Find related papers by JEL classification: I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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