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.   

Profiting From Misery Because They Can

By: Marcus J. Hopkins, Founder & Executive Director, Appalachian Learning Initiative

Since the passage of the Affordable Care Act (ACA) in 2010, millions of Americans have gained access to health insurance and other forms of healthcare coverage which they were previously unable to afford. According to the U.S. Department of Health and Human Services (HHS), a record 31 million Americans have access to healthcare coverage through the ACA’s Marketplace or Medicaid Expansion coverage (HHS, 2021). And yet, for a significant percentage of Americans, healthcare has not become, despite the name of the law, “affordable.”

When we talk about “affordability,” we often speak in terms of average numbers—the average costs of services and prescriptions; the average costs of insurance premiums and deductibles. By those measures, the ACA has failed:

• The cost of services has increased at an average annual rate of 3.5% per year over the past 20 years (Peter G. Peterson Foundation, 2022). Several factors contribute to this increase in costs, including the introduction of new and innovative technologies leading to more expensive procedures and products, the complexity of the U.S.’s overly complex multi-payor healthcare system that naturally leads to administrative waste, and the decrease of competition as hospital systems consolidate and take over smaller hospitals.
• The cost of prescription drugs has increased on an annual average of around 5% (Keown, 2022). Two HIV drugs, Biktarvy and Descovy (Gilead Sciences), saw price increases of 5.6% in 2021 which, according to a Gilead spokesperson, are offset by rebates and other discount programs (Keown).
• The cost of premiums has increased on an annual average of 11.6% (Antos & Capretta, 2020). Deductibles have risen dramatically, as well, increasing from an average of $2,425 in 2014 to $4,500 in 2020 for Silver Plans offered on Healthcare.gov (Antos & Capretta).

While these costs have increased at a consistent rate, the Real Median Personal Income in the U.S. has largely stagnated since the late-1990s, hovering between $30,000 and $37,000 (U.S. Census Bureau, 2022). This translates to the reality that, while the costs associated with healthcare services and treatments have increased, median incomes have not increased in conjunction to support those increased expenditures.

According to a recent report released by Peterson Center on Healthcare and the Kaiser Family Foundation, although 90% of Americans now have access to some form of health insurance coverage (private, employer-sponsored, or public), medical debt remains a persistent problem for 23 million people—nearly 1 in 10. This is especially true for Americans with lower incomes, Black Americans, and patients with significant medical needs. In terms of age, patients aged 35-64 were more likely than any other demographic to have significant medical debt. In terms of geographic location, people living in the South or in states that have not expanded Medicaid were more likely to have significant medical debt (Rae, et al, 2022). 

Other aspects of the ACA—such as the 80/20 rule, requiring insurers to spend at least 80% of the premiums they collected on medical claims—were designed to limit the profits made by insurance companies. If insurers fail to meet that percentage, they are required to rebate the difference to policyholders. In the early years of the ACA, this resulted in billions in rebates to consumers. However, insurers have successfully devised numerous schemes to ensure that consumers pay more, and insurance provider profit margins stay high.

One such mechanism involves a practice referred to as “Co-Pay Accumulator Programs.”

What Are Co-Pay Accumulators and How Do They Work?

Co-Pay Accumulator Programs are stipulations included in many private and employer-sponsored health insurance plans, often hidden in the “fine print.” Under these programs, money paid to pharmacies and healthcare providers via coupons, assistance cards, discounts, product vouchers, and other third-party sources does not count towards patients’ deductibles or out-of-pocket maximums (OPMs). Since reaching a deductible or OPM makes the insurance company responsible for any further cost of treatment and services covered under a plan, delaying these benchmarks makes patients liable for more costs, increasing the amount they end up paying for prescriptions and other services.

Co-Pay Accumulator Programs save money for insurers by passing along higher costs to patients. For instance, a patient with hepatitis C might be prescribed a direct-acting antiviral (DAA) costing $28,000 per month. Even if an industry co-pay assistance program (CAP) only covers up to 25% of the drug’s cost, meaning $7,000, then just by paying for the first $3,500 dose, the CAP will already meet the patient’s $3,000 deductible. The patient only pays a token amount out of pocket, perhaps $5, while the CAP pays the other $3,495, and all future doses are billed to the insurer.

However, if the plan includes a co-pay accumulator program, that CAP payment will not count towards meeting the patient’s deductible. Instead, the patient uses the CAP for the second dose as well, hitting the CAP maximum of $7,000 yet even then still not meeting their plan’s deductible. With no more help from the CAP, the patient then has to spend $3,000 out of pocket for the next dose before finally hitting their deductible. This saves the insurance company $10,000 by costing the patient $3,000 and the CAP $7,000 before the insurance company even begins helping to pay for the drug. (Hopkins, 2021)

It is our belief that regardless of the source of payment—be it manufacturer coupon, AIDS Drug Assistance Program, or other patient assistance organization, such as the Patient Access Network (PAN) Foundation—all payments should count toward both deductibles and OPMs.

How Many Patients Are Impacted?

According to a 2018 analysis by Zitter Health Insights, 12% of patients with commercial plans were subject to Co-Pay Accumulator Programs in 2018, with 44% of commercial plans including Co-Pay Accumulator Programs. They predicted that 40% of patients would be impacted in 2019 with that number expected to grow annually (Schweitz, 2019). Many patients who are impacted, however, are unaware that their plans contain Co-Pay Accumulators Programs in no small part due to companies using seemingly innocuous language such as “Out-of-Pocket Protection Program” (Express Scripts), “True Accumulation” (Caremark), or “Coupon Adjustment: Benefit Plan Protection Program” (UnitedHealthcare) (Hopkins, 2021).

Photo Source: The Matrix Consulting, LLC

How Can We Address Co-Pay Accumulators?

At the end of 2021, only state-level action had been successfully undertaken to prohibit the inclusion of Co-Pay Accumulator Programs, with twelve states and Puerto Rico having passed such legislation:

• Arizona (HB 166)
• Arkansas (HB 569)
• Connecticut (SB 003)
• Georgia (HB 946)
• Illinois (HB 0465)
• Kentucky (SB 45)
• Louisiana (SB 94)
• North Carolina (SB 257)
• Oklahoma (HB 2678)
• Tennessee (HB 0619)
• Virginia (HB 2515)
• West Virginia (HB 2770)

In 2022, eleven states have introduced legislation to address Co-Pay Accumulators (that the author was able to find):

• District of Columbia (B24-0557)
• Florida (SB 1480) – FAILED; (HB 1063) – FAILED
• Iowa (H 2384)
• Maine (SP 621)
• Minnesota (SF 2136)
• Mississippi (HB 880) – FAILED; (SB 2470) – FAILED
• Missouri (SB 1031)
• New York (A1741); (SB 5299) – FAILED
• South Carolina (H 4987)
• Utah (SB 139) – FAILED
• Washington state (HB 1713) – FAILED; (SB 5610) – PASSED

In addition to state-level actions, Congress recently introduced the Help Ensure Lower Patient (HELP) Copays Act (H.R 5801). The HELP Copays Act, sponsored by Rep. A. Donald McEachin (D-VA-04), would ban co-pay accumulator programs by:

• Updating the Affordable Care Act’s (ACA) definition of cost-sharing to require that all out-of-pocket payments made by or on behalf of a patient count toward the patient’s deductible and out-of-pocket limit. This would end co-pay accumulator programs in marketplace exchange insurance plans. 
• Stipulating that any item or service covered by an employer health plan is part of the essential health benefits (EHB) package and therefore the plan must count any cost sharing toward patients’ annual limits. This would end the ACA’s EHB loophole that allows plans to deem certain categories of drugs as non-essential.

This addition to the ACA would require insurers to count co-pay assistance paid by any third party on behalf of the patient toward their insurance deductible or out-of-pocket maximum (Immune Deficiency Foundation, 2021). The bill has bipartisan support with 20 co-sponsors and 116 state and national organizations sent a sign-on letter via the All Copays Count Coalition to Secretary of Health and Human Services, Xavier Becerra, in support of the HELP Copays Act.

Whom Should We Contact?

While federal legislators continue to work on the HELP Copays Act, people can (and should) reach out to their state legislators to pass legislation at the state level to prohibit insurers from implementing Co-Pay Accumulators by any name. They may find their state legislators online.

At the federal level, the HELP Copays Act continues to sit in the House Committee on Energy and Commerce. People should reach out to their Congressional Representatives, which they may find here.

In addition to contacting members of the House, we urge patients to contact their Senators to ask for a companion bill to be introduced in the Senate. They may find their contact information here.

The ADAP Advocacy Association, Patient Access Network Foundation, and The Matrix Consulting, LLC, invite you to direct your elected representatives to the PAN Foundation’s excellent campaign:

End harmful co-pay accumulator programs online at https://www.panfoundation.org/end-copay-accumulators/.

References:

• Anton, J. R. & Capretta, J. C. (2020, April 10). The ACA: Trillions? Yes. A Revolution? No. Washington, DC: Health Affairs Blog: Health Affairs Forefront. https://www.healthaffairs.org/do/10.1377/forefront.20200406.93812/full/
• Keown, A. (2022, January 04). Drug Price Increases for 460 Drugs in 2022. Urbandale, IA: BioSpace. https://www.biospace.com/article/a-new-year-means-price-increases-for-many-prescription-drugs/
• Peter G. Peterson Foundation. (2022, February 16). WHY ARE AMERICANS PAYING MORE FOR HEALTHCARE? New York, NY: Peter G. Peterson Foundation: Blog. https://www.pgpf.org/blog/2022/02/why-are-americans-paying-more-for-healthcare
• Hopkins, M. J. (2021, April 07). How “Co-Pay Accumulators” Stifle Healthcare Access and Empty Patients’ Wallets. Lost River, WV: Community Education Group: Rural Health Service Providers Network: Publications. https://secureservercdn.net/198.12.144.78/m60.322.myftpupload.com/wp-content/uploads/CoPay_Accumulators-FINAL.pdf
• Immune Deficiency Foundation. (2021, December 02). Support the HELP Copays Act and fight unfair copay accumulators. Towson, MD: Immune Deficiency Foundation: News. https://primaryimmune.org/news/support-help-copays-act-and-fight-unfair-copay-accumulators
• Rae, M., Claxton, G., Amin, K., Wager, E., Ortaliza, J., & Cox, C. (2022, March 10). The burden of medical debt in the United States. Peterson-KFF Health System Tracker. https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/?_hsmi=206419781&_hsenc=p2ANqtz--ts2CCK83uE9bi6lOcPJxnqqO0KQG5tOHocn9uAhHCAiYGFqKj4-5sQwvC4s15sMUuMqmLSQsg_QORW4rajQjwpITJZg&utm_campaign=KFF-2022-Health-Costs&utm_medium=email&utm_content=206419781&utm_source=hs_email
• Schweitz, M. C. (2019, January 22). The Cost-Shift Conundrum of Copay Accumulator Programs. Thorofare, NJ: Healio: News: Rheumatology: Practice Management. https://www.healio.com/news/rheumatology/20190114/the-costshift-conundrum-of-copay-accumulator-programs
• United States Census Bureau. (2022, March 11). Real Median Personal Income in the United States [MEPAINUSA672N]. Retrieved from FRED, Federal Reserve Bank of St. Louis. https://fred.stlouisfed.org/series/MEPAINUSA672N
• United States Department of Health and Human Services. (2021, June 05). New HHS Data Show More Americans than Ever Have Health Coverage through the Affordable Care Act. Washington, DC: U.S. Department of Health and Human Services: About HHS: News. https://www.hhs.gov/about/news/2021/06/05/new-hhs-data-show-more-americans-than-ever-have-health-coverage-through-affordable-care-act.html

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.

Co-Pay Accumulators are an Extremely Dangerous, Anti-Patient Policy

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

Today's lexicon outside healthcare policy discussions probably doesn't include the words, co-pay accumulators. But that is slowly changing as more and more people encounter what is widely recognized as an extremely anti-patient health insurance policy. Co-pay accumulators amount to nothing more than the greedy health insurance industry (and other payers) making prescription drug coverage less affordable for patients, especially for those living with chronic health conditions such as HIV/AIDS.

The Hepatitis B Foundation defines a copay accumulator (or accumulator adjustment program) as "a strategy used by insurance companies and Pharmacy Benefits Managers (PBMs) that stop manufacturer copay assistance coupons from counting towards two things: 1) the deductible and 2) the maximum out-of-pocket spending."[1]

Last year in the ADAP Blog, guest contributor Marcus J. Hopkins provided an excellent description on these potentially harmful policies: "Essentially, what a co-pay accumulator attempts to do is increase the amount of money consumers pay in order to decrease the amount of money insurers have to pay, once their annual deductible and/or Out-of-Pocket Maximum (OPM) is met. When consumers are allowed to count co-pay assistance cards against their deductible/OPM, they reach those limits sooner, meaning that insurers are then on the hook for every pharmaceutical fill after that date."[2]

Photo Source: Bankrate

Co-pay accumulators are particularly problematic for the HIV community because they rely on specialty drugs, such as anti-retroviral medications. In 2018, Dr. Adam J. Fein with the Drug Channels Institute warned, "Patients today are being asked to pay a significant share of prescription costs for more-expensive specialty drugs, because of high coinsurance amounts."[3]

Unfortunately, increasingly health insurance companies and PBMs have elected to institute co-pay accumulators. Make no mistake about it, but these co-pay accumulators will lead to patients being unable to afford their medication...and that will lead to less medication adherence...and that will lead to higher costs for the entire healthcare system. Our response is simple: It is time to advocate for the patient!

The AIDS Institute recently published an in-depth report, "Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators." According to the report's findings, in 45 states and the District of Columbia, there is at least one plan with a copay accumulator adjustment policy.[4]

For people living with chronic health conditions, such as HIV or viral hepatitis, co-pay accumulators generally pose significant problems for patients. As the report highlights: "With the many crises plaguing our health care system today, this very confusing issue can easily be dismissed. However, for the patients it affects, it simply cannot be ignored. And for those who haven’t experienced a copay accumulator yet, it may only be a matter of time."[5]

The problem for patients is much broader, though. According to the Patient Access Network Foundation (PAN), more than 10 percent of seniors shared that they took on credit card debt to afford prescriptions, while nearly 20 percent of seniors said they reduced spending on everyday purchases, including groceries and transportation.[6]

Photo Source: PAN Foundation

The Biden-Harris Administration recently had the opportunity to pump the brakes on co-pay accumulators, similar to the way they stopped the harmful demonstration project designed to weaken the six protected drug classes under Medicare's Part D. They failed to so, and the patient advocacy community was quick to express its concern.

“We are deeply disappointed that CMS passed on addressing the issue of copay assistance for prescription drugs and requiring insurers and pharmacy benefit managers to count assistance towards patient out-of-pocket cost-sharing and deductibles,” commented Carl Schmid, executive director of the HIV+Hepatitis Policy Institute. “Even before COVID-19, patients were struggling to afford their medications and relied on copay assistance from drug manufacturers. Now, the need is even greater. We know that the Biden-Harris administration wants to improve patient affordability of healthcare, particularly for vulnerable communities; however, they missed a perfect opportunity to demonstrate this commitment.”[7]

In a recent letter, U.S. Representatives A. Donald McEachin (VA-04) and Rodney Davis (IL-13) asked President Biden to halt the Trump Administration's copay accumulator policy ― which was included in the 2021 Notice of Benefit and Payment Parameters (NBPP).[8] It is now left in the hands of the Congress to reverse course on the extremely dangerous, anti-patient policy known as co-pay accumulators. Patient health depends on it!

[1] Hepatitis B Foundation (2020, March 4). Copay Accumulators – What They Are and What They Mean For Your Prescriptions. Retrieved online at https://www.hepb.org/blog/copay-accumulators-mean-prescriptions/#:~:text=A%20copay%20accumulator%20–%20or%20accumulator%20adjustment%20program,the%20deductible%20and%202%29%20the%20maximum%20out-of-pocket%20spending.

[2] Marcus J. Hopkins (2020, July 16). CMS Co-Pay Accumulator Rule Aims to Increase Consumer Costs. The ADAP Blog. ADAP Advocacy Association. Retrieved online at https://adapadvocacyassociation.blogspot.com/2020/07/cms-co-pay-accumulator-rule-aims-to.html.

[3] Adam J. Fein, Ph.D. (2018, January 3). Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit. Drug Channels. Retrieved online at https://www.drugchannels.net/2018/01/copay-accumulators-costly-consequences.html.

[4] The AIDS Institute (March 2021). Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators. Retrieved online at https://aidsinstitute.net/documents/2021_TAI_Double-Dipping_Final-031621.pdf.

[5] The AIDS Institute (March 2021). Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators. Retrieved online at https://aidsinstitute.net/documents/2021_TAI_Double-Dipping_Final-031621.pdf.

[6] Amy Niles (2021, April 19). Morning Consult survey: high out-of-pocket costs causing concern for seniors. PAN Foundation. Retrieved online at https://www.panfoundation.org/high-out-of-pocket-costs-causing-concern-for-seniors/. 

[7] Carl Schmid (2021, April 30). Biden Administration Passes on Protecting Patient Affordability of Medications. HIV+Hepatitis Policy Institute. Retrieved online at https://hivhep.org/press-releases/biden-administration-passes-on-protecting-patient-affordability-of-medications/.  

[8] The Honorable A. Donald McEachin (2021, March 22). McEachin Leads Bipartisan Letter Asking President Biden to Reverse Previous Administration’s Copay Accumulator Policy. The Office of U.S. Representative A. Donald McEachin (VA-04). Retrieved online at https://mceachin.house.gov/media/press-releases/mceachin-leads-bipartisan-letter-asking-president-biden-reverse-previous.

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.

It Is Time to Advocate for the Patient

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

       Jeffrey R. Lewis, President & CEO, Legacy Health Endowment 

       (The views expressed are his own)

Republicans and Democrats used to boast about protecting people from having to use hospital emergency rooms unnecessarily.  Both parties rallied around the flagpole, trying to demonstrate who cared more. In the end, empty promises.

Before leaving office, the Trump administration decided to throw a large bone to the health insurance industry and their partners in this caper, pharmacy benefit managers (PBMs). The solid gold bone allows health insurers and PBMs to exclude medications that a patient receives through pharmaceutical manufacturer patient assistance programs (PAPs) from counting against their deductible and maximum out-of-pocket amount, otherwise known as copay accumulator programs.

Photo Source: Daily Caring

Many pharmaceutical companies offer PAPs and Copay cards, covering all or part of medication expenses to enable patients to be able to afford medications. These programs are used by millions of Americans who suffer from one or more chronic disease conditions. Cancer patients, for example, need PAPs because the cost of their overall care is so expensive, and the medications they take often do not have a generic equivalent. 

Historically, the value of a PAP or copay card was counted toward an individual's health insurance policy deductible. Most people are familiar with paying a deductible as part of their medical and prescription drug coverage. Once the deductible is met, a larger portion of their medical expenses is paid for by the insurer. With the advent and expansion of high deductible health plans (HDHPs), individuals may face deductibles of at least $1400/year and up to $6900/year for total annual out-of-pocket expenses.

Guy Anthony of Brooklyn, N.Y., lives with HIV and bipolar disorder and relies heavily on the manufacturer's copay assistance program to afford his Genvoya® medication to treat his HIV. He describes his situation in simple terms: "I'm not rich, and most people living with co-morbidities aren't either. My grandmother takes close to 10 different medications, and this new policy is making it hard for her to live."

Why? Because as insurance companies and PBMs expand the use of copay accumulators and watch their profits and stock price increase, Guy's assistance is reduced and he and patients like him end up increasing their out-of-pocket expenses to meet their deductibles. And his grandmother's health is threatened by the Trump Rule. 

The pharmaceutical company programs were created to help people like Guy and his grandmother.  Restrictions like the Trump Rule result in reduced medication adherence, poorer health outcomes, and ultimately, higher healthcare costs. When cost-containment such as Copay Accumulator Programs negatively impact prescription compliance, it is the patient who suffers.

A recent West Health-Gallup survey underscored the importance of what happens under the Trump Rule: In the last year, tens of millions of Americans said they were forced to cut back on necessities like food (12%) and utilities (9%) to pay for basic healthcare. Nearly 30% found paying for general healthcare a significant financial burden, behind housing (51%), taxes (48%), and food (41%). Costs for prescription drugs are a substantial financial burden for more than one in five adults (22%). More than half (52%) of all Americans also said they are either "worried" or "very worried" that a health event will wipe out their savings.

The Biden Administration can be an advocate for the patient. All it takes is an Executive Order issued by President Biden to eliminate the Trump Rule. And every day that Congress and the Biden Administration delay, they become Trump High Healthcare Cost co-conspirators.

This opinion piece was also published in the April 12th edition of the Cision PR Newswire.

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 Co-Pay Accumulator Rule Aims to Increase Consumer Costs

By: Marcus J. Hopkins, Policy Consultant & Guest Contributor

Co-Pay Accumulators are management tools used by health insurance companies, Pharmacy Benefit Managers (PBMs) and other health plans that excludes co-pay assistance coupon and program payments from counting toward patients’ deductibles (Schweitz, 2019). The Centers for Medicare & Medicaid Services (“CMS”) recently promulgated new rules potentially excluding drug manufacturer co-pay assistance programs towards patient out-of-pocket cost sharing and deductibles.

I wrote about this issue, last September, for the ADAP Advocacy Association (read blog, here), and have been asked to take another look at this issue after CMS decided, after some deep soulless searching and poor timing, to put this program fully into place in the middle of a pandemic outbreak.

Here is the rule in question:

1. See, Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2020, Final Rule, 84 Fed. Reg. 17454 (April 25, 2019) (the “Final Rule”).2. 45 C.F.R. § 156.130(h) reads in its entirety as follows:“(h) Use of drug manufacturer coupons. For plan years beginning on or after January 1, 2020:(1) Notwithstanding any other provision of this section, and to the extent consistent with state law, amounts paid toward cost sharing using any form of direct support offered by drug manufacturers to enrollees to reduce or eliminate immediate out-of-pocket costs for specific prescription brand drugs that have an available and medically appropriate generic equivalent are not required to be counted toward the annual limitation on cost sharing (as defined in paragraph (a) of this section).”3. In general, “accumulator programs” are a relatively recent component of pharmacy benefit designs offered by many health insurers and PBMs for commercially insured enrollees. Accumulator programs track utilization of drug manufacturer-sponsored copay or other assistance to ensure that the drug manufacturer contribution no longer counts toward an enrollee deductible. Accumulator programs tend to reduce the health insurers’ or plan sponsors’ overall contribution to the total spend on high-cost branded prescription medications as opposed to shifting more cost toward them when accumulator programs are not in effect. There are many variations of these programs depending on plan design and other factors.4. See, Final Rule at 17544 - 17545.5. See, The Center for Consumer Information & Insurance Oversight, Affordable Care Act Implementation FAQs - Set 12, Q1 and Q2 (February 2, 2013), and Affordable Care Act Implementation FAQs - Set 18.

Looking for a bit more insight, I turned to JD Supra, a great source of press releases and legal analysis for those looking at government rules and regulations. Here was their finding in May 2020:

The Final Rule states that consistent with specific state law, coupons, and copay cards offered directly by drug manufacturers may be, but are not required to be, counted towards a patient’s annual cost-sharing limit under the plan. This is a notable change from CMS’ prior proposal that would prohibit copay accumulator programs for branded drugs without therapeutic alternatives. (Fox, Atkins, & Trunk, 2020)

Essentially, what a co-pay accumulator attempts to do is increase the amount of money consumers pay in order to decrease the amount of money insurers have to pay, once their annual deductible and/or Out-of-Pocket Maximum (OPM) is met. When consumers are allowed to count co-pay assistance cards against their deductible/OPM, they reach those limits sooner, meaning that insurers are then on the hook for every pharmaceutical fill after that date.

But the rule change at CMS is trickier than that, according to another JD Supra author:

"In conclusion, the Final Rule prohibits individual market, small group, large group and self-insured group health plans from using accumulator adjustment programs only when there is no generic for a branded pharmaceutical.  However, under federal law, all such health plans may continue pharmacy benefit designs which do not count manufacturer coupons toward an enrollee’s maximum out-of-pocket cost sharing (a) when there exists a generic equivalent for a branded drug, and (b) under any circumstances, for more expensive biologics. 

Still, as a final cautionary note, please keep in mind that the Final Rule, by its own terms, does not pre-empt state laws. Some states are considering or have passed legislation that may prohibit the use of accumulator programs regardless of the availability of generic substitutes. However, such state laws, if passed, may be limited to health insurers and may not be able to reach self-funded group health plans which are governed by ERISA. Thus, those subject to the Final Rule must remain cognizant of similar laws in the states in which they offer health benefit plans. (Hanna, 2019)."

The problem with this issue is that the CMS rule is aimed directly at insurers providing plans for the Medicare program. For those unfamiliar with that whole mess, Medicare insurance programs are offered to eligible beneficiaries not by state, but by zip code, meaning that there are well over 1,000 plans and options being offered across America. As a result of this, trends in the general health insurance market tend to follow the standards set by Medicare insurers, because they essentially glut the market (and, frankly, it’s just easier).

And this is the crux of this piece: can State Insurance Commissioners (and thus, state laws) use their influence and sway to essentially force insurance companies to count co-pay assistance cards toward deductibles/OPMs? The answer is a big, “…maybe?”

In most cases, federal law supersedes state law. In this case, that law is the Affordable Care Act (ACA, aka Obamacare). In order for states to engage in the health insurance marketplace (where consumers can buy individual plans), they have to live under ACA rules. As part of that, this new CMS rule would apply to the ACA, as well. That, however, is also unclear.

However, some states, such as Arizona, Illinois, Virginia, and West Virginia, have passed laws that prohibit insurers from using Co-Pay Accumulators in part, or in total. While Arizona and Virginia’s laws have a bit of wiggle room in their language, allowing for insurers to argue that they can use them in certain instances, both Illinois and West Virginia bar their utilization, outright, by not distinguishing between prescription drugs that do or do not have generic equivalents (Aimed Alliance, n.d.).

So, there’s not a lot of real light, here, to guide our way.

Advocates could attempt to get states to push through laws banning the practice (which, I think they should do, regardless of any advocacy), but let’s be honest – most state legislatures are out of session, for the remainder of 2020, and they’re almost all in the middle of an election year. There’s not going to be much movement on this issue until after November 4th.

The real question is whether or not federal rules supersede State Insurance Commission rules. If so, who the hell knows what’s going to happen, next?

References:

• Aimed Alliance. (n.d.) COPAY ACCUMULATORS – ENACTED LAWS. Washington, DC: Aimed Alliance. Retrieved from: https://aimedalliance.org/copay-accumulators-enacted-laws/
• Fox, A., Atkins, E., Trunk, S. (2020, May 29). HHS Clarifies Position on Copay Accumulators? Or Does It?. Sausalito, CA: JD Supra, LLC: Legal News. Retrieved from: https://www.jdsupra.com/legalnews/hhs-clarifies-position-on-copay-19750/
• Hanna, D. (2019, June 18). HHS Issues Final Regulation Of Drug Co-Pay Accumulator Programs:. Sausalito, CA: JD Supra, LLC: Legal News. Retrieved from: https://www.jdsupra.com/legalnews/hhs-issues-final-regulation-of-drug-co-93372/
• 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.

This New Insurance Loophole Could Affect People on HIV Meds, including PrEP

Guest Blog By: John Peller, President & CEO, AIDS Foundation of Chicago

Reprinted with Permission from AIDS Foundation of Chicago

Do you use a copay card to help pay for name-brand HIV drugs for treatment or PrEP? If you do, watch out: your insurance company might have a new policy that doesn’t let your copay card (a.k.a. your copay assistance card) help you afford your medications.

We’re talking about “copay accumulators” — policies some insurance companies are using that could make your health care more expensive, perhaps unaffordable. Read on for an overview of the problem and some steps you can take to make your medications affordable.

We are very concerned about the impact that these new insurance company policies will have on people’s health. We’ll do everything we can to fight them – but need your help. Are you having trouble getting medications because of insurance company policies? Tell us what’s going on by contacting www.speakup.hiv. We also recognized that insurance companies have put these policies in place because brand-name drugs are just too expensive. We’re committed to fighting for more affordable prices for life-saving medications.

What are copay accumulator programs?

Copay accumulators are relatively new policies that some insurance companies are using to stop counting drug company copay cards toward a person’s deductible or out-of-pocket maximum.  Note: These policies apply to drug manufacturer co-pay cards only, and not charitable assistance programs like the Patient Advocate Foundation, AIDS Drug Assistance Programs, or state-run programs that help pay for PrEP.

Which insurers are using copay accumulators?

Cigna, United Healthcare and pharmacy benefit managers CVS Caremark and Express Scripts have implemented these policies nationally for some plans. Warning: this list could grow.

Which medications are affected?

This new policy can apply to any brand-name drug with a copay program for any health condition, not just HIV for treatment or PrEP.

What does this mean for people in this situation?

Here’s where it gets complicated: Before copay accumulators policies were in place, the value of your copay card could be counted toward your deductible and out-of-pocket maximums. These cards could potentially save you a lot of money and make access to the health care you need easier and less stressful.

But if your insurance company has a copay accumulator policy and you are using a copay card to help pay for your medicine, when you reach your limit on the copay card, the total value on the card will not count toward your deductible or annual out-of-pocket maximum. If this policy is in place with your insurance company, you will need to pay your full deductible out of your own pocket before your insurance actually kicks in. This could mean that you’d be responsible for thousands of dollars to cover the cost of your health care and prescriptions.

Let’s walk through an example.

You start your new health plan year in January and you take a name-brand (non-generic) medication that costs $1,500 a month. Your plan has a $6,000 deductible (the amount you pay before the insurance plan starts paying for some care), and the deal is, you pay the full cost of all care (including drugs) before you meet your deductible. After you meet your deductible, your insurance company kicks in and starts paying for stuff.

The name-brand medication you take has a copay card, and that card is worth $6,000 per year. You use that copay card in January, February, March and April at the pharmacy to pay for your drug. By the time May arrives, your copay card has run out ($1,500 X 4 months=$6,000).

• The old way (no accumulator): Previously, the insurance company would have counted what the copay card paid towards your deductible. In this scenario, your deductible would be fully met by using the card. So, depending on the details of your insurance, you might not have to pay anything after meeting your deductible, or you might have to come up with a small fee for your medication, or a small fee for other things like office visits.

• The new way (with an accumulator): With a copay accumulator policy in place, the insurance company doesn’t count the amount of the copay card towards your deductible. When you go to fill your prescription in May, you will owe the full $1,500 cost of the drug, because your $6,000 deductible has not been paid down. You’ll need to keep paying the full cost of those  drugs yourself, out of your pocket, until you pay a total of $6,000 (four more months of drugs) and meet your plan’s deductible.

Will you be ready for an unexpected out-of-pocket cost?

We are very concerned that people may not know their insurance companies have changed their policy and may not be prepared to pay the full cost of their deductibles. While you might have received a letter from your insurer talking about copay accumulators, it may not have been completely clear what this new policy would mean for you.

So what can you do?

• Consult your health plan materials or call your insurer to ask questions. If you have been affected by this type of policy and have had to switch to another drug or have been unable to fill your prescription, tell your insurer. Ask your insurer to waive the policy (it never hurts to ask).

• Apply for help. The Patient Advocate Foundation (www.copays.org), Patient Access Network Foundation (www.panfoundation.org) or similar organizations can help you get your HIV medications for treatment or prevention. If you’re taking PrEP, you can also get help from PrEP4Illinois (www.prep4illinois.com), a state program that provides free PrEP medications.

• Tell us! We want to know about your experience so we can be better informed when we are advocating for you. Contact us at cgoode@aidschicago.org.

• Tell your employer, too. If you are employed and receive health insurance through your job, tell your employer. They may have adopted this program thinking of it as a cost-savings strategy without truly understanding the negative impact it could have on their employees.

Some helpful definitions:

The term accumulator refers to the running total of a person’s costs that apply toward their deductible and out-of-pocket maximum.

A deductible is the amount a person pays for health care services before insurance kicks in. For example, an individual with a $2,000 deductible would pay for their first $2,000 of care (including things like medications, office visits, lab tests) before health insurance begins to cover costs.

A copayment is a fixed amount a patient pays for a covered health service after they’ve paid their deductible. For example, you might pay a $20 copayment when you pick up medications at the pharmacy. Some insurance plans have copayments; some do not.

An out-of-pocket maximum is the most amount of money a person has to pay for covered services in a plan year. After this amount is spent on out-of-pocket costs (deductibles, copayments and coinsurance), a health plans pays 100% of the cost of covered benefits.

A high-deductible health plan is a plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but people pay more health care costs out of their own pocket before the insurance company starts to pay.

A pharmacy benefit manager is a third-party administrator of prescription drug programs contracted by health plans, employers and government entities to manage prescription drug programs.

A copay card can be provided by a pharmaceutical company (a.k.a. a manufacturer like Gilead) or a charity. These cards help patients afford the cost of their prescriptions. The amount of the patient’s copayment may be reduced or covered completely if they use a copay card.

Thanks to Cancer Support Community and The Arthritis Foundation for providing a version of this information. https://www.cancersupportcommunity.org/blog/2018/04/copay-accumulator-programs-whats-stake-patients



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.