How a quiet co-pay rule change could mean massive drug cost increases

The COVID-19 pandemic has hit those with chronic diseases especially hard. According to its most recent weekly summary, the Centers for Disease Control and Prevention estimates that 91% of patients hospitalized with the disease have at least one underlying medical condition.

Patients with chronic diseases face an additional burden due to a Department of Health and Human Services (HHS) rule that took effect last week curtailing co-pay assistance—financial aid in the form of co-pay coupon cards from drug manufacturers that millions of Americans rely on to help pay for their prescription medications.

HHS recently finalized its annual regulation called the Notice of Benefit and Payment Parameters for 2021 (NBPP 2021), which expressly allows health insurers to adopt “co-pay accumulator adjustment programs” (CAAP). These programs can prohibit co-pay assistance from counting toward patients’ deductibles and maximum out-of-pocket limits. For many patients, this policy means that once their co-pay assistance runs out, they are back in the position of not being able to afford their medication.

Patients’ pain is health insurers’ gain: CAAPs essentially allow insurers to double the amount of money they receive in deductibles, earning these funds first through drugmaker co-pay assistance, and then from the patient directly.

Health insurers argue that co-pay accumulator adjustment programs incentivize patients to shift to less expensive generic alternatives. Yet this perspective overlooks how around 87% of medications for which co-pay assistance is available have no generic substitute. When co-pay assistance runs out and no generic substitute is available, many patients subject to co-pay accumulator adjustment programs simply stop taking their needed medications.

According to one study of patients with cancer, nearly half of patients abandon their prescriptions when out-of-pocket costs reach $2,000. Nonadherence to prescription drugs accounts for 10% of hospitalizations and 125,000 deaths each year. CAAPs threaten to worsen health outcomes for millions of patients in the middle of a pandemic.

Consider the story of Kristen Catton, a part-time nurse case manager from Columbus. Catton has multiple sclerosis, which she’s long managed with medications—paid for by co-pay assistance—that allow her to function in her daily life. In May 2018, she discovered that her insurer adopted a CAAP that required her to pay $3,600 per month for her prescription drugs until she met her $8,800 deductible. As a result, she’s had to consider rationing her medication.

Adding to the confusion, CAAPs are often advertised under misleading names, such as “Coupon Adjustment: Benefit Plan Protection Program,” “Out of Pocket Protection Program,” and “Specialty Co-pay Card Program.” Many patients don’t know about the change in their benefits until they get a massive charge at the prescription counter when their co-pay assistance runs out.

The NBPP 2021 co-pay accumulator provision is not only the wrong move during a pandemic, but it also may result in health plans violating the Patient Protection and Affordable Care Act (ACA). The ACA established maximum out-of-pocket limits on plan enrollees’ cost sharing responsibilities. The ACA defines cost sharing to include “any expenditure required by or on behalf of” a patient. Co-pay assistance is provided on behalf of a patient, and therefore, should be counted toward the limit. With CAAPs, health plans collect both the co-pay assistance and the full amount of out-of-pocket costs from patients. In doing so, they may exceed the ACA’s maximum out-of-pocket limit, thereby violating the law.

Patients with chronic diseases already have more than enough to worry about managing their conditions and avoiding exposure to COVID-19. CAAPs add insult to their injury. To protect the most vulnerable during this pandemic and encourage compliance with the ACA, HHS must reverse its regulation, and instead, limit these financially devastating accumulator adjustment programs.

Terry Wilcox is cofounder and executive director of Patients Rising. 

Stacey Worthy is counsel to Aimed Alliance and a partner at DCBA Law & Policy.