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Medically reviewed by, Russell Braun RPH

Health insurance gets more expensive every year. Do you dread the open enrollment period when you find out how much more you will pay for health insurance next year? You are not alone! In addition to normal premium increases, something called copay accumulator programs are being added to many health insurance plans and they can cost you even more money.

1. What is a Copay Accumulator?

Copay accumulator programs is a term that was created by Pharmacy Benefit Managers (PBMs) to describe a way of counting how much assistance patients receive from pharmaceutical manufacturers.

These programs apply only to your medications. Specifically, when you need a medication and the pharmacy tells you how much you owe. This could be in one of the following forms depending on the type of insurance you have.

1. Copay, or portion you are responsible for after the insurance has paid part of the price for the medication. Copays are set by your insurance and usually vary by tier. Typical copay tiers are set up something like this:

• Generics $
• On formulary brand $$
• Non formulary brand $$$

2. Deductible, or portion you must pay out of your pocket before the insurance will begin to pay. High Deductible Health Plans will have higher patient deductibles than traditional Preferred Provider Plans (PPOs) plans.

3. Coinsurance, or portion that you pay while the insurance is also paying a portion. Typically, after you have paid some amount out of pocket the insurance will split the remaining amount with you. Common coinsurance splits are 70-80% insurance, 20-30% patient. For a one hundred dollar medication with 70/30 coinsurance would look like this:

• Insurance pays $70
• Patient pays $30

Drug copay coupon cards

Depending on your insurance, the pharmacy will tell you an amount owed. In the case of branded drugs, many will offer copay coupon cards. These copay assistance programs as they are called, help pay for some or all of the patients copay. Here are a few examples of drug copay coupons for popular drugs:

• Humira
• Trintellix
• Trulance

These programs can end up paying thousands of dollars per year toward expensive brand name drugs.

So what is an accumulator in insurance?

The accumulator part comes in thanks to the PBM who is keeping track of all the claims made for medications. When the pharmacy bills for the medication they are sending a request for payment to the PBM. The PBM then tells the pharmacy how much the patients owes and how much the insurance will pay.

To be able to use these copay programs, pharmacies must run a second request to the PBM in order to get the copay amount lowered so the pharmacy can get paid by the pharmacy manufacturer who sponsors the copay coupon. This allows the PBM to know how much money the patient has actually paid for the medication.

Deductible

As the year goes on and you spend money on healthcare the amount that comes out of your pocket gets added up so that when you reach your deductible amount the insurance will kick in and start to pay. This is where copay accumulators cost patients, big time!

Because the PBM knows how much you actually paid vs. the pharmaceutical manufacturer, they know you didn’t actually pay the full amount of your deductible. They exclude the copay assistance from counting toward the deductible. That is essentially what a copay accumulator program does.

2. How do copay accumulators work?

Example assumptions:

• Patient deductible is $1500 per year.
• Drug X 30 day supply cost is $402.
• Maximum amount paid by drug X coupon is $1200 per year.

3. Copay surprise

People frequently have the copay surprise at the pharmacy counter. Just like displayed in the table above, they have been using a drug for several months. They don’t realize the copay card has a maximum amount it will pay and once it is exhausted……boom. The patient is expecting a ten dollar copay like last time and instead the pharmacist says that will be $381!!!

Ouch!

That drug is really expensive and oh yeah, you have not paid down your deductible at all so far. Which means you have a few thousand dollars more to go before you meet that limit. As you can see this can be quite a stressful copay surprise.

4. Other names for copay accumulator programs

Obviously patients need to watch out for these types of PBM practices. The table below provides some other names that may refer to these type of programs that all work in essentially the same way.

The sad thing is some of these names seem to imply these programs would actually help a patient. Unfortunately, that is not the case.

5. How often does copay assistance count towards deductible?

Nearly 80% of health insurance plans have some form of deductible that patients must meet before insurance will kick in. This is true for both Preferred Provider Organizations (PPOs) and High Deductible Health Plans (HDHPs).

As that trend continues so does the uptick in requiring prescription drugs to be included in the deductible or have a separate deductible itself.

According to a 2019 employer survey by Kaiser Family Foundation, the average deductible was $1,655 for single coverage. Copay assistance has played a large part in helping patents cover that large out of pocket expense.

The bad news….

In 2019 an additional to the 34% of employers already using copay accumulators, another 31% of large employers plan to adopt them. Another 4% say they plan to add them in 2020.

6. Why were copay accumulators created?

Health plans and payers are not just coming up with schemes to rob their members of hard earned cash. They did have a reason for requesting that PBM’s create a way to stop so many patients from using copay coupon cards from Pharma manufacturers. Here is why:

1. Generic alternatives exist, but may have a higher copay than the brand when the patient uses a copay coupon card.

2. Therefore, the more expensive brand medications are used instead of generics.

3. Insurers still have to pay the higher price for the more expensive brand name, than a less costly generic. The copays or deductibles set for the patient don’t impede them from using a higher cost option like the plan intended.

4. This causes prices to rise and premiums need to be raised for the next plan year.

A study done in 2016 found the impact of this to be millions of dollars per year in overspending when generics were available, but brands were used instead.

The flip side of that is when no generics are available. In those cases, copay coupon cards can be vital so that people can afford to take a medication. A study that looked at the top 200 drugs in 2018 found that 51% did not have a generic alternative.

7. The impact of copay accumulators

Weather you see copay accumulators as double dipping by insurers to collect deductibles twice or as a tool to keep costs down, they do impact patients. According to the Kaiser Family Foundation the average premium for family insurance increased 5% in 2019 while workers wages increased 3.4% and inflation jumped 2%. Those numbers have been going in that direction for for several years now. Which is not good for patients.

The largest impact is to those patients who take very high cost specialty medications. These medications can run thousands of dollars per month, making them out of reach for many patients without some type of assistance. Additionally, these medications treat diseases that can make it hard for people to continue working.

A double whammy, get a diagnosis of a disease that is a major life change and then find out the medication to make you better is thousands of dollars per month. A few examples include:

• Cancer
• Rheumatoid arthritis
• HIV
• Multiple sclerosis
• Hemophilia
• Crohns disease
• Ulcerative colitis

Nonadherence

All too often the financial strain leads to patient to stop taking the medication. Many are ashamed and don’t discuss with the doctor. Others don’t want to bring such large financial strain on their family. When they stop taking the medication is can lead to worsening of the disease and can end up in higher medical bills due to hospital admissions or surgeries.

Always talk to your doctor if you don’t think you can afford a medication!

Even if a generic is not available there is almost always some less costly form of therapeutic alternative you can try.

8. Are copay accumulator programs legal?

At this time copay accumulator programs are legal. However, the lines are not so black and white. More of a gray as there is no legal precedent in most areas of the country.

Medicare, Medicaid, Tricare and any other government sponsored health plan prohibits their members from using copay coupons all together. Conversly, some states have laws to prohibit health plans from using copay accumulators in those states. Which means copay coupon cards can be used there. Please remember, federal guidelines supersede states so government insured people can not use copay coupon cards, period.

States that require that copay coupon card dollars be applied to a patients deductible.

• Illinois
• Virginia
• West Virginia

Prohibit copay accumulators use to only when a generic alternative is not available in these states.

• Arizona
• California
• Massachusetts

These state have a bill on copay accumulators that is not signed into law yet.

• Indiana
• Kentucky
• Ohio
• Oklahoma

If you live in one of these states and do not have governement insurance then copay accumulators should not impact you.

Finally, watch out in 2021! There was a rule from the Department of Health and Human Services (HHS) that would allow insurers to use copay accumulators across the board set for 2020. However, there was a lot of negative feedback, so they pulled the rule back. Unfortunately, they noted that this would be clarified in 2021.

9. What you need to do

1. Check your plan documents.

Health insurance plans are supposed to disclose this type of information to their members. That means it may have been described in the fine print of the documents you have received. A good place to start would be the summary of benefits section.

2. Call your insurance company to confirm.

Call the phone number on the back of your prescription drug card issued to you by the insurance company. Ask if a they have a copay accumulator program or if they will for next plan year. Remember, more plans are adding these all the time. Keep in mind that this could change year to year.

3. Consider changing insurance plans.

A copay accumulator could have you on the hook for thousands of dollars if medications are the bulk of what typically helps you meet your deductible. It may be worth the time and effort to change plans to a lower deductible plan. Keep in mind those will come with higher monthly premiums so don’t forget to check the math.

4. Take advantage of several free resources below to help you reduce costs on medications.

These steps show you how to eliminate medications when possible, find low cost options and monitor on an ongoing basis.

• 7 Easy Ways How to Save Money on Drugs
• 15 Important Things to Know About Patient Assistance Programs (PAPs)
• 5 Proven Methods to Get Cheap Rx Drugs With Health Insurance

5. Reach out to your employer and the drug manufacturer.

Both your insurance and drug manufacturers want to see patients take medications they are prescribed. The negative financial and health effects make this a no brainer for all parties. Therefore, explain your situation to them and they could make exceptions for certain situations so you can continue a medication

Click here to get Dr. Jason Reed’s exclusive list of medication questions you MUST ask your doctor, for FREE!

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• 5 Things You Need to Know About Drug Copay Coupon Cards From a Pharmacist
• 5 Proven Methods to Get Cheap Rx Drugs With Health Insurance