Addressing copay accumulators

What is copay assistance?

To help temper high prescription costs, many individuals living with chronic disorders, including primary immunodeficiencies (PI) or inborn errors of immunity (IEI), receive copay assistance. These programs are offered by charities, nonprofits, and manufacturers of specialty medications to offset the out-of-pocket medication costs for qualifying patients. Typically, individuals that qualify for copay assistance are the most financially vulnerable patients. The amount covered by copay assistance is intended to be counted toward an individual’s insurance deductible or out-of-pocket maximum, decreasing the amount of money an individual spends out of pocket before their insurance benefits kick in.

Unfortunately, over the past several years, IDF has seen a rise in the prevalence of insurance copay accumulator programs, which do not allow copay assistance to count toward deductibles or out-of-pocket maximums.

How do copay accumulators affect prescription costs?

Copay accumulator programs eliminate the long-term benefit of copay assistance to patients. They limit copay assistance to staving off the high costs of medications in the short term, but once the limit for the copay assistance program has been reached, individuals then must pay their full deductible or out-of-pocket maximum before their insurance benefits cover medication costs.

The example below demonstrates how copay accumulators shift thousands of dollars onto patients. In the example, the insurance policy includes a $4000 deductible, a $8000 out-of-pocket maximum, and a 50% copay once the deductible has been met. A patient with medication costs of $2000 per month who receives $6000 in copay assistance pays $2000 for their medication over the course of a year. That cost skyrockets to $8000, a 400% increase, if the insurance plan includes a copay accumulator policy.

Insurance providers argue that copay assistance leads patients to choose brand-name drugs over generic equivalents, leading to higher overall prescription costs. However, 99.6% of copay assistance is used for branded drugs without a generic alternative. Punishing patients who rely on drugs without generic alternatives is not fair.

It also is not fair that copay accumulators allow for double dipping, as the insurance deductible or out-of-pocket maximum is essentially paid not once, but twice. This double dipping is the basis of the lawsuit brought by the HIV+Hepatitis Policy Institute, the Diabetes Leadership Council (DLC), and the Diabetes Patient Advocacy Coalition (DPAC). They argue that insurance companies are receiving more payment than they are entitled to under the Affordable Care Act (ACA) cost-sharing caps. 

On September 29, 2023, the U.S. District Court for the District of Columbia ruled in favor of the plaintiffs, essentially reinstating a ban on copay accumulators in both federally and state-regulated insurance plans for medications that do not have generic alternatives. Initially, the Department of Health and Human Services (HHS) filed to appeal the decision, but backlash from patient organizations and Congressional members led HHS to ultimately drop their appeal. 

The D.C. court decision is a game-changer, because it applies to all health plans including marketplace (individual and small group), large group, and employer-sponsored health plans. All health plans for the 2024 plan year are required to count all copay assistance for medications that do not have generic or biosimilar equivalents towards your deductible and annual limits on cost sharing. 

To avoid relying solely on the court decision, IDF, as a steering committee member of the All Copays Count Coalition, still advocates for a legislative solution so that the ban on copay accumulators is written into law.