Biden Sides with Insurers, Shifting More Costs to Patients

By: Ranier Simons, ADAP Blog Guest Contributor

The high cost of healthcare is the product of a complex, fragmented financing system. The machinations of multiple public and private payors coupled with the advent of middlemen, such as pharmacy benefit managers, in the healthcare expenditure landscape often hinder the development of common sense solutions. This is especially true in the present discourse surrounding 340B Drug Pricing Program, Prescription Drug Affordability Boards (PDABs), and Alternative Funding Programs, which are all intertwined around 'controlling' prescription drug costs. At the center of the medical, fiscal maelstrom is the patient. Rising medical debt has a crushing impact on many aspects of patients’ lives and healthcare outcomes. Potential solutions come and go. Unfortunately, one remedy to alleviate patient costs recently failed. The Biden Administration fell short of instituting promised regulations surrounding patient protections against insurers abusing copay assistance programs.[1]

Photo Source: Lifepoint Health

The 2026 Notice of Benefit and Payment Parameters (NBPP) proposed rule was posted to the Federal Register on October 10th.[1] This rule addresses many things, including the operations of insurance plans. The executive summary states explicitly, “Our goal with these proposed requirements is providing quality, affordable coverage to consumers while minimizing administrative burden and ensuring program integrity. The changes proposed in this rule are also intended to help advance health equity, mitigate health disparities, and alleviate discrimination.”[1] However, the proposed rule lacks promised provisions that would have closed essential health benefits loopholes and shielded patients from adverse cost-sharing activities by insurers. In the NBPP, insurers won and patients lost.

This is a fight that many advocates felt had already been won, thanks to the combined efforts of the HIV+Hepatitis Policy Institute, Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition. In September of 2023, a federal court struck down a previous federal rule issued under the Trump Administration that allowed insurance companies to use copay accumulators and maximizers, which allowed them to take advantage of manufacturer copay assistance programs to the detriment of patients.[2] This ruling meant that insurers had to follow previous 2020 federal guidelines that prohibited the usage of copay accumulator practices except with regard to brand name drugs that have generic equivalents if allowed by state law.[3]

The court remanded authority back to the U.S. Department of Health & Human Services (HHS), meaning the federal government needed to issue new regulations. The government previously in November 2023 stated in a brief that it would issue new rules directly addressing the prohibition of copay accumulator practices.[4] Yet, it has not, and the 2026 NBPP does not do that. As of January 2024, 19 states have passed legislation that bans or restricts accumulators in individual or small-group health plans.[5] That leaves patients in many states unprotected without federal regulation that explicitly bans copay accumulator practices. Without protection, patients are still victim to insurers using copay accumulators, maximizers, and even alternative funding programs.

The 2026 NBPP also does not include a provision to close an essential health benefits loophole insurers, and PBMs are taking advantage of it. Essential health benefits (EHB) are categories of services the Affordable Care Act (ACA) states insurance plans must cover.[6] One of those categories is prescription drugs. The ACA provides cost-sharing limits on EHBs. What is happening is that PBMs are investigating which drugs have high-cost thresholds or those for which manufacturer copay assistance programs are available. They subsequently identify those drugs as ‘non-essential health benefit’ drugs, removing their shield of protection. That designation enables them to siphon all of the manufacturer copay assistance funds to themselves without applying it to patients' deductibles and other cost-sharing. A 2025 NBPP rule closed this loophole for individual and small group markets but is still open for large group and self-funded plans. The 2026 NBPP does not bring the federal government’s promise to close the loophole to fruition.

Photo Source: Chronic Disease Coalition

Copay accumulators, maximizers, and alternative funding programs increase patients’ financial burden while lowering costs and increasing profits for insurance plan sponsors and other vendors. Copay accumulators accept manufacturer copay assistance funds up to the limits of patients’ insurance deductibles while not counting it towards patients’ out-of-pocket contributions towards their deductible.[5] Adam J. Fein, Ph.D. with the Drug Channels Institute, summarized, "Benefit designs have been shifting drug costs to patients, some of whom are now responsible for a much greater share of their prescription costs. These out-of-pocket expenses can be quite high, especially for more expensive specialty drugs when patients face coinsurance amounts and payment in the deductible coverage phase."[5] Thus, patients still have to meet their out-of-pocket contributions even after they have already been met by the copay assistance program. The insurance plan is effectively being paid twice, known as ‘double dipping.’

Copay maximizers are more nefarious because they drain a disproportionate share of manufacturer assistance funding.[5] Here, the plans set a patient’s out-of-pocket obligation to match the maximum value of support the copay assistance program provides. Thus, even if a deductible is $5,000, a patient’s out-of-pocket obligation could be set to $20,000 if that was the maximum use case of a particular copay assistance program. Patients incur very low out-of-pocket costs, but funding that could be stretched to help more patients is drained into industry coffers.

Alternative funding programs are the newest development in violating patient protections. Here, plans eliminate coverage entirely for specialty or costly drugs, thus leaving patients with the plans effectively uninsured.[5] Then, the patients are made to apply for patient assistance programs, which pay the entire list price for the drug. Patients incur minimal costs. However, plan sponsors and other vendors are paid the entire list cost value, which reduces their plan expenses but is a significant and improper financial depletion of assistance funds.[5] Additionally, there are delays involved in patients applying for these programs, and some are denied. Delays and denials are unnecessary barriers to patient access to medication that should be essential health benefits.

Photo Source: First Federal Credit Control

Since the EHB loophole remains open for large group and self-funded plans, masses of patients are left unprotected. It is not enough for the federal government to acknowledge a problem. Effective remedy requires acknowledgment of a problem, specific delineation of a solution, followed by enforcement of the solution. It is likely this loophole will only exacerbate the growing problem with medical debt.

Carl Schmid, executive director of the HIV + Hepatitis Policy Institute, encapsulates the situation perfectly, stating, “Every day these rules are delayed is another day that insurers and PBMs are pocketing billions of dollars meant for patients who are struggling to afford their drugs. Coming from an administration that prides itself on supporting patients and lowering their prescription drug costs, this is a huge disappointment. While they have gone on record that they will issue these rules, the clock is ticking, and there isn’t much time left.”[7]

[1] National Archives and Records Administration. (2024, October 10). Proposed Rule: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2026; and Basic Health Program. Retrieved from https://www.federalregister.gov/documents/2024/10/10/2024-23103/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2026-and

[2] United States District Court. (2023, September 29). Memorandum Opinion. Retrieved from https://hivhep.org/wp-content/uploads/2023/09/HIV-Hepatitis-Policy-Institute-v.-HHS-DDC-opinion.pdf

[3] HIV+Hepatitis Policy Institute. (2023, October 2). Court Strikes Down HHS Rule that Allowed Insurers to Not Count Copay Assistance. Retrieved from https://hivhep.org/wp-content/uploads/2023/10/copay-accumulator-court-decision-press-release-10.2.23.pdf

[4] United States District Court. (2023, November 27). Defendant's Conditional Motion to Clarify Scope of Court's Order. Retrieved from https://hivhep.org/wp-content/uploads/2023/11/govt-clarification-request.pdf

[5] Fein, A. (2024, February 14). Copay Accumulator and Maximizer Update: Adoption Expands as Legal Barriers Grow. Retrieved from https://www.drugchannels.net/2024/02/copay-accumulator-and-maximizer-update.html

[6] HealthCare.Gov. (2024). Essential Health Benefits. Retrieved from https://www.healthcare.gov/glossary/essential-health-benefits/#:~:text=A%20set%20of%2010%20categories,offers%20when%20you%20compare%20plans

[7] HIV+Hepatitis Policy Institute. (2024, October 4). Biden-Harris Administration Sides with Insurers & Fails to Take Steps to Lower Patient Costs for Prescription Drugs. Retrieved from https://hivhep.org/press-releases/biden-harris-administration-sides-with-insurers-fails-to-take-steps-to-lower-patient-costs-for-prescription-drugs/

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.   

US District Court Sides with Patient Groups on Co-Pay Accumulators

By: Ranier Simons, ADAP Blog Guest Contributor

An important legal decision produced a financial win for patients on medication affordability. On September 29, 2023, U.S. District Court Judge John D. Bates struck down a federal rule left over from the Trump Administration that previously allowed broad use of copay accumulators by insurance companies, which shifted more cost-sharing to patients. For a detailed explanation of copay accumulators, please view a previous ADAP Advocacy blog post on the subject here. 

Photo Source: National Infusion Center Association

Copay accumulators, in essence, allow insurers to ‘double-dip’, maximizing profits while increasing financial burdens for patients. The accumulators allow insurers to refrain from applying drug manufacturer copay assistance payments to patients’ deductibles and out-of-pocket costs. Under copay accumulator policies, insurers pay less for medications by prolonging the cost-sharing time period before they are responsible for 100 percent of a medication’s cost.

The Trump-era rule is officially known as the U.S. Department of Health and Human Services (HHS) Notice of Benefit and Payment Parameters for 2021 (NBPP).[1] The HIV+Hepatitis Policy Institute, Diabetes Leadership Council, Diabetes Patient Advocacy Coalition, and three patients sued HHS over the rule. The win means that insurance companies must now abide by the federal rule that controlled 2020 health plans. Thus, copay accumulator programs are only allowed to be used for brand-name drugs that have generic equivalents.[1] According to a report issued by IQVIA, manufacturer copay assistance in 2022 was almost $19 billion.[2] This means insurers previously received billions in payments provided by manufacturers in addition to the overage they were predatorily siphoning directly from patients. 

The flawed federal rule allowed insurance companies to arbitrarily decide if copay assistance programs were considered a type of cost-sharing. This was based on contradictory interpretations of the law and problematic ambiguities of its language. Copay assistance should indeed be regarded as cost-sharing, given the rule states cost-sharing is “any expenditure required by or on behalf of an enrollee.”[1] Striking down the rule removes any ambiguity mandating that patients can go back to applying copay assistance payments towards deductibles and out-of-pocket maximums, thus significantly lowering their financial burden for high-cost medications.

Photo Source: National Bleeding Disorders Foundation

Health insurance policy and drug benefit design can be a bridge or a barrier to effective and optimal access to life-saving medications. High out-of-pocket costs for patients often result in medicine abandonment, poor medication adherence, or even failure to initiate necessary treatment.[3] Patients affected by copay accumulators are 1.5 times less likely to fill their prescriptions than those in high-deductible plans.[4]

The legal decision is a significant win. However, it must be aggressively and effectively enforced. The representatives of HHS attempted to use convoluted and flawed arguments to explain why copay accumulators were good for patients and how they somehow forced manufacturers to lower prices. The judge refuted their arguments, but he remanded to HHS in the event it should decide to offer new arguments concerning the legality of copay accumulators under the Affordable Care Act.[1] Swift and sweeping enforcement can ensure there is no delay in patients' financial relief. Languid implementation of the ruling will continue to harm patients while providing time for continued attempts to construct arguments in favor of the accumulators.

[1] HIV + HEP Policy Institute. (2023, October 2). Court strikes down HHS rule that allowed insurers to not count copay assistance. Retrieved from https://hivhep.org/press-releases/court-strikes-down-hhs-rule-that-allowed-insurers-to-not-count-copay-assistance/ 

[2] IQVIA Institute For Human Data Science. (2023). The Use of Medicines in the U.S. 2022: Usage and Spending Trends and Outlook to 2026. Retrieved from https://www.statnews.com/wp-content/uploads/2023/10/iqvia-institute-the-use-of-medicines-in-the-us-2022-1.pdf

[3] Simons, R. (2023, May 18). Affordable Care Act marketplace plans and drug benefit design. Retrieved from https://adapadvocacyassociation.blogspot.com/2023/05/affordable-care-act-marketplace-plans.html

[4] Silverman, E. (2023, October 3). Court strikes down Trump-era rule that allowed health insurers to broadly use copay accumulators. Retrieved from https://www.statnews.com/pharmalot/2023/10/02/trump-biden-hhs-copay-insurance-accumulator/

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.   

CMS Declines To Enforce New Co-Pay Rules It Put In Place

By: Marcus J. Hopkins, Policy Consultant

One of the arguably good changes brought forth by the Affordable Care Act (ACA; AKA – Obamacare) was the ability to use Ryan White (RW) Part B funds to purchase and pay private insurance premiums and co-pays for AIDS Drug Assistance Program (ADAP) clients. This, in addition to shifting some clients off of RW and onto state Medicaid programs in those states that expanded Medicaid, allowed state RW programs to shift some expenditures and costs off of their budgets by no longer paying directly for medications and, in some states, treatment costs.

One of the negative consequences of the ACA’s implementation has been the creation and proliferation of so-called “Co-Pay Accumulator Programs” – management tools used by Pharmacy Benefit Managers (PBMs) and other health plans that excludes co-pay assistance coupon and program payments from counting toward patients’ deductibles (Schweitz, 2019). This concept essentially allows insurers and PBMs to accept the payments received from the utilization of these co-pay coupons and Patient Assistance Programs (PAPs), not count those payments toward patients’ deductibles, and later demand and collect additional deductible payments after the co-pay assistance runs out for patients.

This practice has been widely criticized in a time when pharmaceutical prices have been (rightly) deemed out of control, too high, and unconscionable. Patients rely upon these manufacturer coupons, PAP assistance, and other discount programs to reduce the high cost of drug co-pays to as little as $5 or no cost from potentially hundreds of dollars per medication fill.

Photo Source: AIMED ALLIANCE

The current administration has repeatedly promised that it would lower the cost of prescriptions, though it has done little to deliver on said promise. One of the few positive steps it had taken was the announcement in its 2020 Notice of Benefit and Payment Parameters rule that “…co-pay assistance from drug companies must count towards a patient’s deductible and out-of-pocket maximum in most cases.”

That decree lasted about as long as any other policy decree from this administration.

On August 26th, 2019, the Center for Consumer Information and Insurance Oversight (CCIIO) released an FAQ (found here) stating that this rule, set to go into effect on January 1st, 2020, will now not be enforced, nor will states be required to enforce the pro-patient rule, because enforcing it might conflict with rules set forth by the Internal Revenue Service (IRS) that allows High Deductible Health Plans (HDHPs) to not count co-pay assistance toward deductibles.

Photo Source: CMS

So, essentially, the health insurance companies win.  Again.  And again.  And again.

ADAP funds may be used to pay for clients’ co-pays, premiums, or both, depending upon the state, and for those clients who live in states where ADAP only pays for premiums, they may rely upon co-pay coupons to afford their medication co-pays.

To put this in personal terms, my Biktarvy (Gilead) co-pay is $250/month. Because I live in WV, the state covers that co-pay amount. However, if I lived in another state where that wasn’t the case, I could potentially use Gilead’s Advancing Access® Medication Co-Pay Card, which pays $3,600 annually toward co-pay costs. That amount would pay for 14 months of my $250 co-pay, essentially delivering a medication for free for an entire year…unless the PBM that services the insurance plan’s prescription program uses a Co-Pay Accumulator Program, so that none of those medication co-pays count toward my deductible.

For anyone who thinks that this move by the Centers for Medicare and Medicaid Services (CMS) is an accident, don’t kid yourself: this isn’t a glitch; it’s a feature. This administration’s CMS has consistently moved in ways that raise prices and complicate healthcare access for patients, from authorizing (likely unconstitutional) work requirements for Medicaid programs in Arizona, Arkansas, Indiana, Kentucky, Michigan, New Hampshire, Ohio, Utah, and Wisconsin, to changing the way the Modified Adjusted Gross Income (MAGI) – the measurement used to calculate eligibility for assistance programs – is calculated. CMS Administrator, Seema Verma, has consistently ranked high on the Cruella de Vil Scale of Human Empathy, frequently siding against the interests of patients in her administration of federal healthcare programs.

Caught in the middle of this battle between private insurance profits and purported (but undelivered and undeliverable) savings for federal programs is the patient, who has seen their access to medications consistently slip further and further out of grasp. It is time, once again, for Americans to decide which is more important: the value of money or the value of human life. Sadly, I’m not at all confident that we will make the right decision.

References:

• Schweitz, M.C. (2019, January). The Cost-Shift Conundrum of Copay Accumulator Programs. Thorofare, NJ: SLACK Incorporated: Healio: Healio Rheumatology: Practice Management. Retrieved from: https://www.healio.com/rheumatology/practice-management/news/print/healio-rheumatology/%7B04769e45-fca4-4ce6-90be-8f441d6afc7d%7D/the-cost-shift-conundrum-of-copay-accumulator-programs

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.