By Emma Ryan and Emily Fitts
Our deep dive into coupon policies that may affect how much you pay for prescriptions – updated for 2020
Discount coupons, also called copay cards, help many people with diabetes afford their medication. At the pharmacy, these coupons can reduce out-of-pocket costs – sometimes by hundreds of dollars. However, certain employers, insurers, and pharmacy benefit managers (the “middlemen” between drug manufacturers and insurance companies) have rules to try to discourage the use of discount coupons. Many health plans do not count these coupons toward deductibles and out-of-pocket maximums – a practice called “accumulator adjustment” that increases the amount of money people pay for their medications.
Definition of copay under Obamacare. A copay is a set dollar amount (determined by your insurance plan) that you may be required to pay in order to receive a specific medical service, such as office visit when you’re feeling sick or a prescription drug. A copayment or copay is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. It may be defined in an insurance policy and paid by an insured person each time a medical service is accessed. The price will be higher if you have a deductible, are in the Medicare coverage gap, are using non-formulary drugs, or you're paying a percentage instead of a flat copay. Sometimes, the pharmacy can see the specifics of why your insurance determined the cost to be what it is, but for the most detailed information, have the pharmacy keep the.
Typically, these coupons decrease the out-of-pocket cost of the medication while counting the original, higher price toward an individual’s deductible (the yearly amount you pay before insurance kicks in). People have traditionally been able to reach their deductible or out-of-pocket maximum while using money contributed via these coupons. This is why accumulator adjustment policies are extremely damaging for people who rely on discount coupons for medications with no generic equivalent.
In January 2020, the Department of Health and Human Services (HHS) announced a proposed rule that would allow insurers to use these copay accumulator adjustment programs. Starting in 2021, this proposed rule would make it more difficult for people to meet their deductible and thus increase how much they pay yearly for their medications. diaTribe advocated, along with many other organizations, against this proposed rule.
Here’s how accumulator adjustment works:
Say your pharmacy deductible is $500, which is typical here in California for a Bronze insurance plan.
The cost of the medication is $100, but a copay card brings down the amount you pay to $5, with the remainder paid by the drug’s manufacturer. Under the traditional policy, the full cost of the drug – $100 – would be counted toward your deductible, even though you’ve only paid $5 of your own money.
The situation is much worse under accumulator adjustment. Since you’ve only paid $5 out-of-pocket, only $5 is counted toward your $500 deductible. With the addition of these policies, many people who use discount cards – particularly those with high deductibles – will end up paying more for their supplies. For background on why these policies are being implemented, read more below.
What can you do about this?
1. Be informed.
People who have benefited from these coupons in the past may not even be aware of the change, so the first step is to find out if this policy change applies to you. To avoid any surprises when meeting your deductible, check your plan’s most recent benefits documents. Though some plans transparently list new accumulator programs in a user-friendly “Summary of Benefits” document, others do not. And, each health insurance plan refers to copay accumulator adjustment in different ways. Below are what some large health groups call the policy:
BlueCross BlueShield of Texas calls it “Coupons for Individual Plan Members Only”
CVS Caremark calls it “True Accumulation”
Express Scripts calls it “Out of Pocket Protection”
United Healthcare calls this “Coupon Adjustment: Benefit Plan Protection”
Be aware that your health plan may change policies in 2021 if the proposed rule from HHS passes without revision.
Find up-to-date benefits documents on your health plan’s website and searching for keywords like “coupon,” “copay card,” 'discount,' 'assistance,' “accumulation,” and “accumulator.”
You can also call your health insurer directly. Here is a sample script:
“I’ve heard that there are programs that do not allow for my prescription copay card to be applied to my deductible as it was in the past. This program is called copay accumulator adjustment. Are you adopting these programs, or do you have future plans to adopt this program?”
2. Investigate if switching health plans can help save you money.
A lower deductible plan, though it may have higher premiums (cost of plan), could reduce costs in the long run. See our guide to maintaining coverage while changing plans here. If this is not an option, here are some additional resources on access and affordability:
Ten tips for saving money on diabetes care
Patient assistance programs for insulins and other diabetes medications
Paying for insulin if you can’t afford it
3. Get involved with patient advocacy groups and state legislation.
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There are many patient advocacy groups that are pushing back on these policy changes. diaTribe is working alongside organizations such as Alliance for Patient Access, Aimed Alliance, Diabetes Patient Advocacy Coalition, and many others. If you believe that these policies are harmful to your health, Alliance for Patient Access offers resources for taking action on impending state legislation in Indiana, Kentucky, Massachusetts, Ohio, and Oklahoma. Through advocacy work over the past two years, four states – Arizona, Illinois, Virginia, and West Virginia – have passed laws that limit health plans’ use of copay accumulator programs.
As always, we hope that patients and healthcare providers will work together to find a treatment plan that balances safety and affordability.
Why do these policies exist?
While discount coupons help individuals afford medication, they can drive up costs for everyone in the long term if they cause people to switch from less expensive generics or biosimilars (the term used to mean “generic” when specifically talking about insulin) to more expensive brand name medications. Typically, insurers encourage people to use low-cost medications by offering lower copays for generic and biosimilar equivalents. Insurers have an incentive to do this because it means they pay less for these drugs, too. When coupons allow people to afford more expensive medications, however, the insurer pays more to the manufacturer. This can ultimately translate to higher premiums for everyone on the health plan. Medicare prohibits copay coupons for this reason, and California prohibits copay coupons for medications that have a lower-cost generic equivalent for all California residents.
Beyond encouraging the use of more expensive medications, many argue that copay cards allow manufacturers to raise the prices of these medications. When coupons make drugs affordable to consumers, manufacturers are given room to raise prices without impacting demand. Ultimately, insurers pay the difference. A 2016 study found that among 23 brand name medications for which there was a generic equivalent available, coupons increased overall spending by an average of between $6 million to $24 million per year.
In diabetes, however, there are fewer brand name medications with lower-cost generics available. In fact, a recent study found that 50% of drugs with copay cards available had no generic equivalent or close substitute. Copay accumulator adjustment programs impact all drugs, even the ones without a less expensive substitute.
This article is part of a series on access that was made possible by support from Lilly Diabetes. The diaTribe Foundation retains strict editorial independence for all content.
A new type of policy has been introduced that has the potential to put cancer patients at serious financial risk. You may not have heard of copay accumulators or accumulator adjustment programs before, so this blog will provide an overview of these policies to help prepare you in case you might be at risk of facing this barrier to affordable cancer care.
First Things First…
Before we talk about this new type of policy, it might be helpful to define some terms.
The term accumulator refers to the running total of a patient’s costs that apply towards their deductible and out-of-pocket maximum
A deductible is the amount a patient pays for health care services before insurance kicks in. For example, a patient with a $2,000 deductible would pay for their first $2,000 of care before health insurance begins to cover costs.
A copayment is a fixed amount a patient pays for a covered health services after they’ve paid their deductible. For example, you might pay a $20 copayment when you visit your doctor.
An out-of-pocket maximum is the most amount of money a patient has to pay for covered services in a plan year. After this amount is spent on 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 patients pay more health care costs out of their own pocket before the insurance company starts to pay.
A pharmacy benefit manager (PBM) is a third-party administrator of prescription drug programs contracted by health plans, employers, unions, and government entities to manage prescription drug programs.
A copayment card can be provided by a pharmaceutical company (aka a manufacturer) 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 copayment card.
What are co-pay accumulators or accumulator adjustment programs?
Co-pay accumulators or accumulator adjustment programs are relatively new policies that some pharmacy benefit managers and insurers are using to prohibit manufacturer copayment cards or other forms of manufacturer assistance from being used to pay down a patient’s deductible or out-of-pocket maximum.
What does this mean for patients?
It means that when your copayment card limit has been reached, the value on the card will not have counted toward your deductible or annual out-of-pocket maximum. Instead, you will need to pay your full deductible before cost-sharing protections kick in. In other words, when a patient uses a copayment card, the amount of money that the card is “worth” does not count towards the patient’s deductible or out-of-pocket maximum. Therefore, the patient is responsible for significantly more money to cover the cost of their health care and prescriptions.
Let’s walk through an example…
It’s the start of a new health plan year in January and you are on a medication with a price of $3,000 a month. You use your manufacturer copay card at the pharmacy and make a regular copayment at the counter. For example, that copayment might cost you $20 each month instead of $3,000 each month. By the time March arrives, you’ve reached the limit on your copay assistance. As a result, when you go to refill your prescription in April, you will owe the full $3,000 cost of the drug, because the deductible has not yet been paid down.
Will you be ready for an unexpected out of pocket cost?
We are concerned that patients may not know they are enrolled in these programs and may not be prepared to pay the full cost of their deductible right away. While you might have received a disclosure from your insurer, it may not have been completely clear what the practical implications of this new policy would mean.
Who is enrolled in these programs?
People most likely to be enrolled in these programs are those in employer-sponsored plans and those in high-deductible health plans (HDHPs) in particular. HDHPs are becoming increasingly common as plans employers and insurers use to help incentivize appropriate health care utilization and to lower costs.
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If you have been affected, or think you might be in one of these programs and want to be prepared, 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.
- 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.
- Tell us! We want to know about your experience so we can be better informed when we are advocating for you. Contact us at action@cancersupportcommunity.org.
Rx Copay Meaning Abbreviation
This blog was written in collaboration with The Arthritis Foundation.