Ontario insurers would have to pay all pharmacies equally and face potential government takeover powers over public sector insurance pools under proposed legislation.
The Plan to Protect Ontario Act (Budget Measures), 2025 (No. 2), introduced as Bill 68 on November 6, 2025, would rewrite the rules for how insurance companies handle prescription drug coverage and would open the door to direct government supervision of certain insurance operations.
The centerpiece for most carriers is a straightforward mandate that would require operational overhauls if passed. Under the proposed legislation, if an insurer provides reimbursement or other payment for a drug dispensed by a pharmacy operator under a group insurance contract, it would be required to offer the same reimbursement for that drug to all pharmacy operators that dispense it.
The change would eliminate preferred pharmacy networks in their current form. Insurers would still be able to set a maximum amount they will pay for a dispensing fee or pharmacy markup, but those caps would have to apply universally. Companies that establish such maximums would be required to disclose them to pharmacy operators upon request.
Pharmacies charging fees or markups exceeding the maximum could be excluded from coverage, but the legislation would build in a workaround. Group plan members could apply directly to their insurer for reimbursement for drugs dispensed by excluded pharmacies, though they would only receive what they would get from a pharmacy within the fee limits.
The bill's second major provision would create public sector reciprocal insurance exchanges. Under the bill, Lieutenant Governor in Council may designate a reciprocal insurance exchange as a public sector entity if the majority of subscribers are broader public sector organizations, if a prescribed portion of funding comes from public funds, or if designation serves the public interest.
The designation would trigger intensive government involvement. If passed, the responsible Minister may issue binding policies or directives to the exchange. The government could prescribe advisory board composition, including appointing members and selecting the chair.
Most dramatically, the Lieutenant Governor in Council may appoint a supervisor to assume complete control of the exchange if the board fails to meet requirements, financial risks emerge, the exchange faces insolvency, or for other prescribed reasons. Unless otherwise specified, the supervisor would hold exclusive rights to exercise all powers of the attorney.
Designated exchanges may be required to include their financial statements in Ontario's consolidated Public Accounts. This integration would bring obligations: annual reports to the Minister, five-year strategic plans, mandatory information sharing, agreements on reporting standards, audits by licensed accountants, and compliance with ministerial directives. The Auditor General may audit these exchanges at any time.
A third provision would extend the government's reach backward. The Lieutenant Governor in Council may reassess health system costs previously billed to insurers within four years from the original assessment period. No interest would be payable on reassessed amounts.
If passed, most changes would await proclamation by the provincial cabinet. The pharmacy provisions would require immediate operational attention, demanding revisions to claims systems, provider contracts, and member communications. The public sector exchange framework would signal a permanent shift toward tighter government integration for specialized carriers serving government clients.
