A diagnosis of a serious medical condition can be scary. But for many patients the more terrifying question becomes, “How will I afford my treatment?”
Coupons offered by drug manufacturers frequently are the answer for many patients when the out-of-pocket costs are simply too high. However, insurance companies and pharmacy benefit manufacturers (PBMs) have been finding ways to push more costs back on to patients.
Patients scored a significant victory earlier this year, when a provision in the 2020 Notice of Benefit and Payment Parameters, a federal rule released annually by the Center for Consumer Information and Insurance Oversight (CCIIO), required insurance companies to count copay assistance from drug companies towards a patient’s deductible and out-of-pocket limit in most cases. However, CCIIO has since released a FAQ, delaying enforcement of their position citing a conflict with IRS guidance pertaining to health savings accounts. The FAQ states that CCIIO will not enforce this provision for 2020 and will not require state Insurance Commissioners to enforce it, although states can decide to do so on their own. CCIIO said it will revise the policy in the upcoming 2021 Notice of Benefit and Payment Parameters proposed rule, which is now pending review at OMB. So, until further notice, plans are free to continue not counting copay assistance toward patients’ cost-sharing limits.
A financial lifeline for patients
Many patients with chronic conditions rely on high-cost, specialty medications to maintain their health. Research has shown plan benefit design trends have shifted more financial responsibility to patients over the years through rising deductibles, increasing coinsurance, and expanding formulary tiering. Based on data gathered through the Kaiser Family Foundation 2019 Employer Health Benefits Survey, the average deductible has increased by 36 percent since 2014, and 100 percent over the last 10 years. Additionally, the Robert Wood Johnson Foundation reviewed individual market silver plans, reporting the median coinsurance at 40 percent of the list price, which exposes patients to significant out-of-pocket costs for high-cost, specialty drugs. In response, patients have utilized manufacturer assistance as a lifeline to afford their prescription medications and cover their increasing out-of-pocket costs. These financial burdens can wreak havoc on one’s health. Another Kaiser Family Foundation report showed that 23% of those with a chronic condition have foregone filling a prescription or skipped doses because of cost.
Over the last few years more insurers have adopted the harmful practice of “copay accumulators” which prevent the amount covered by manufacturer assistance from counting towards the patient’s deductible and out-of-pocket maximum – compounding the patient’s financial hardship in affording their healthcare and medicines while allowing the insurance company to “double-dip,” collecting copays from both the manufacturer and patient.
Policy flip flop leaves patients in a lurch
Patient advocates had been encouraged by the stance taken in the 2020 NBPP; federal policy makers were making good on their promise to protect patients from rising healthcare costs. The announcement by CCIIO to delay enforcement of their decision is disappointing and will provide no relief for patients, which is the opposite of the Administration’s expressed desire to lower drug prices and reduce out-of-pocket costs. Additionally, this back and forth on policy will undoubtedly confuse patients as they weigh their health insurance coverage options during the 2020 open enrollment period.
While CCIIO has gone back on their policy position for the time being, issuers are not obligated to impose a copay accumulator within their plans. Additionally, some states have taken action to protect their residents from this harmful practice, recognizing the importance of patient copay assistance. Arizona, Illinois, Virginia and West Virginia enacted state laws in 2019 requiring insurers to accept third-party payments, including drug manufacturer assistance, made on behalf of an insured person to count towards their deductible and out-of-pocket costs. Similar legislation is pending in several other states. We urge issuers to count copay assistance towards a beneficiary’s deductible and out-of-pocket maximum, and more states to pass laws that protect patients from these harmful practices.
In the next couple of weeks, we expect the federal government to release its revised policy recommendation relative to copay accumulators. At that time, it will be necessary for patient groups to weigh in to ensure that copay assistance counts so they can access their medications. In the meantime, as beneficiaries begin to select their health plans for next year, it will be important for them to read the fine print or ask their insurer if copay assistance counts. What is the value of a life extending or life-saving medication if the patient cannot afford it?
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