If You Use a Copay Card, Watch Out for Copay Accumulators

Patient Assistance Programs are structured to support patients who cannot afford expensive brand-name prescription medications. Using a copay card or coupon, patients can offset some of what they have to pay out-of-pocket at the pharmacy. However, commercial health insurance plans and their pharmacy benefit managers have introduced copay accumulator programs that counter the assistance programs.

A Few Definitions

First, lets review some health insurance terms:

Co-insurance: A percentage of cost that a patient needs to pay for a covered service. This is above and beyond the deductible. E.g. Insurance covers 80%, patient covers 20% – the 20% is the co-insurance.

Copay: A flat fee that commercial  health plans require a patient to pay to receive a health service

Deductible: The amount that the patient has to pay for covered healthcare services before the insurance plan starts paying.

Copay accumulator: A insurance tool that prevents copay card/coupon payments from contributing to the patient’s deductible or out-of-pocket costs. While the card contributes to the cost of the prescription, it does not reduce the patient’s share in drug costs.

Copay maximizer: A copay accumulator where the maximum value of the copay card/coupon is applied throughout the benefit year. 

Utilization Management: When an entity responsible for paying most of the cost of the care, determines when, where, or if a treatment can occur. 

How copay accumulators Impact Patients

The copay accumulator or maximizer program—a utilization management tool— contradicts the whole premise of copay coupons/cards. They do this by eliminating the intended savings for patients who cannot afford expensive prescription medications. The insurer or pharmacy benefit manager accepts the copay card or coupon as payment, but do not apply it to a patient’s out-of-pocket limit. 

Insurers argue that when patients are fully responsible for their deductible they will be more frugal, (e.g. choosing generics). However, a majority of drugs for chronic and rare conditions do not have a cheaper generic alternative. Therefore, when faced with this reality, vulnerable patient populations may forego treatment consequent to their out-of-pocket burden.

Consider the following findings: 

• In 2020, those enrolled in large employer plans paid on average 26% in co-insurance (26% for a $10,000 is $2,600)
• In 2020, the average deductible amount was $1,644

Lack of sufficient copay assistance can lead to non-adherence to treatment and worsen a person’s health.  

Policy Efforts from Providers and States

In a policy brief released last year, the American Society of Clinical Oncology (ASCO) expressed concern with how the copay accumulator programs affect patients and the clinical staff who care for them. Physicians and other clinical staff often end up spending significant time identifying financial resources so their patients can continue treatment. They also have to explain to patients why their deductible is not reduced by the copay cards/coupons.

ASCO vehemently opposes this utilization management tactic by health plans and has urged CMS to ban its use. They have appealed to private plans and PBMs to maintain transparency around these programs so patients are not left in the dark. 

Several states have introduced legislation to stop health plans from implementing the accumulator programs. The latest count includes 14 states and Puerto Rico. Federally, CMS rule allows health plans to use copay adjustments, regulation is deferred to the state policy.

Related Reading:

Copay Accumulators: How Insurers Get Paid Twice

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