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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.

This example demonstrates calendar year costs for an insurance plan with a $4000 deductible and $8000 out-of-pocket maximum but no copay accumulator policy. The example medication costs are $2000/month and the copay is 50% after the deductible is met.
This example demonstrates calendar year costs for an insurance plan with a $4000 deductible and $8000 out-of-pocket maximum but no copay accumulator policy. The example medication costs are $2000/month and the copay is 50% after the deductible is met.
This example demonstrates calendar year costs for an insurance plan with a $4000 deductible and $8000 out-of-pocket maximum with a copay accumulator policy. The example medication costs are $2000/month and the copay is 50% after the deductible is met.
This example demonstrates calendar year costs for an insurance plan with a $4000 deductible and $8000 out-of-pocket maximum with a copay accumulator policy. The example medication costs are $2000/month and the copay is 50% after the deductible is met.

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.

What can you do?

Protect your legal rights

If your 2024 health plan still includes a copay accumulator, use the template included in this guide from the All Copays Count Coalition to let the plan administrators know that they are not in compliance with current regulations. If plan administrators refuse to count your copay assistance toward your deductible and/or out-of-pocket maximum, file a complaint with your state's  insurance commissioner or attorney general.

Download guide to protecting your rights

 

Help IDF pass legislation

IDF is closely monitoring legislation addressing copay accumulator programs at the federal and state levels. Nineteen states, plus the District of Columbia and Puerto Rico, have banned copay accumulators.

Nineteen states and Puerto Rico have banned copay accumulators.
States and territories that have banned copay accumulators in health insurance plans.

On Nov. 1, 2021, a bipartisan group of Representatives introduced H.R. 5801, the Help Ensure Lower Patient (HELP) Copays Act, to ban copay accumulators at the federal level. The same legislation was reintroduced as H.R.830 in the U.S. House of Representatives on Feb. 6, 2023. 

Here’s how you can get the HELP Copays Act passed:

  • Raise awareness on social media using the #AllCopaysCount hashtag.
  • You can also sign up for IDF's Action Alerts to be notified when we need you to contact state or federal legislators in support of legislation banning copay accumulators.