Everything You Need to Know About Co-Pay Accumulators

Since last year, CMS has proposed rules that would limit or eliminate the practice of applying the value of discount coupons for brand-name pharmaceuticals to patient’s insurance deductibles. Now CMS appears to moving forward with the controversial policy, which it says is intended to lower the overall cost of medications. Insurance companies support the idea. But many advocacy groups believe that it will present financial obstacles for patients, ultimately compromising quality care.

New 2021 Rules

As CMS reviewed its rules for 2021, it said that insurers on the ACA exchange can decide for themselves whether or not to apply the value of discount pharmaceutical manufacturer coupons to the deductibles of insured members. That includes assistance programs, copay cards, manufacturer coupons, or other copay assistance provided to patients to make brand name pharmaceuticals more affordable. Patients, particularly those with chronic conditions, depend on copay assistance programs. These programs are offered through some drug manufacturers as well as nonprofit charitable organizations.

Debated Pros and Cons

CMS believes that this policy will motivate patients to seek out generic alternatives, which will, in turn, lower the cost of pharmaceuticals. But under the revised guidelines, insurance companies will retain the ability to use co-pay accumulators even if there is no generic version of the drug available. Obviously that can create a greater financial burden for those patients who have trouble affording expensive brand-name drugs that don’t have a generic equivalent. It may also mean that it takes longer for patients to meet their deductibles, increasing the amount they have to pay out of pocket.

Controlling Costs vs. Undermining Care

Insurance premiums and copays remain historically high, even for those Americans who do benefit from subsidies. How to reverse that situation is a complicated problem, and clearly there is strong disagreement between the parties who are involved and affected. CMS reasons that the value of the coupon is not a cost incurred by, or charged to, the insured enrollee and therefore its value should not be required to count towards the out-of-pocket limit. Meanwhile, individual states still have the ability to prohibit the use of accumulator adjustment programs. Several states have already banned the practice, and more may do so in the coming months.

Shifting the Burden to Patients

These states observe that patients are often caught off guard when they are told that the assistance they receive does not count toward meeting their deductible. Patient advocates also say that insurance companies use co-pay accumulator rules to unjustifiably increase their profits. Insurers may get paid by pocketing the assistance payments, and then also get paid when patients have to co-pay because they didn’t yet meet their deductible requirements.

The Bottom Line

While the CMS stance regarding co-pay accumulators is based on lowering costs, that view is challenged by real-world obstacles. Too often, the end result is that patients in need cannot afford to take medicines per their doctor’s instructions, and disengage from recommended treatment plans. That creates a continued burden on the healthcare system, and potentially undermines the savings that the CMS strives to achieve. Time will tell, especially over the next year or two, whether the policy will work or require further revision.


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