Over the past four years, copay accumulator programs have become a significant problem for rheumatology patients. Last year, a D.C. Circuit Court’s decision struck down a 2020 rule that had allowed copay accumulators to proliferate throughout insurance policies. In the wake of that ruling, there has been much uncertainty about the future of copay accumulator policies. The federal government has given no signal that it is prepared to enforce the ruling. Meanwhile, states have continued to step up with legislation aimed at addressing the challenges posed by these programs.
Understanding Copay Accumulators
Copay accumulator programs, also known as accumulator adjustment programs, are used by health insurance companies to accept manufacturer copay assistance funds without applying them to a patient’s annual cost-sharing requirements. Traditionally, copay assistance from pharmaceutical companies is used to help patients cover their out-of-pocket costs, including deductibles and copayments. Under normal circumstances, these assistance payments count toward a patient’s annual out-of-pocket maximums.
However, with copay accumulator programs, the assistance provided by drug manufacturers does not count toward the patient’s deductible or out-of-pocket maximums. This means that once the manufacturer’s assistance is exhausted, patients are still responsible for their full deductible amount, leading to potentially significant and unexpected out-of-pocket expenses. This practice has raised concerns about its impact on patients, particularly those with chronic or severe conditions requiring expensive medications.
State Action Following D.C. Ruling
In the wake of the D.C. Circuit Court ruling, there have been many questions about if and how the ruling will be enforced. The Biden administration and Department of Health & Human Services Secretary Xavier Becerra have thus far not signaled that they will enforce the copay accumulator ruling.
Interestingly, states have been stepping up to the plate to fill this enforcement gap, enacting legislation to regulate or prohibit copay accumulator programs. The primary aim of these laws is to ensure that copay assistance provided by pharmaceutical manufacturers benefits patients directly by counting toward their deductibles and out-of-pocket maximums.
Vermont and Oregon are the most recent states to disallow these policies. As of June, 21 states have implemented copay accumulator bans with varying scopes and provisions.
In a bolder move, Nevada announced at the end of May that it will enforce the Circuit Court’s ruling in health plans in the state. Nevada’s Division of Insurance 2025 Health Benefit Plan Filing Guidance will mandate that plans not include accumulator policies beginning in 2025. It is an encouraging step. Until the federal government decides to enforce the D.C. ruling, we will continue to encourage other states to follow Nevada’s lead.
Key Features of State Copay Accumulator Laws
- Prohibition of copay accumulator programs. Twenty-one states have outright banned the use of copay accumulator programs. These laws mandate that any third-party payments, including manufacturer assistance, must be applied to a patient’s deductible and out-of-pocket maximums.
- Transparency and notification requirements. Other states focus on transparency, requiring insurers to clearly inform patients about the existence and impact of copay accumulator programs. These laws may not prohibit the programs but ensure patients are fully aware of how their copay assistance will be applied.
- Scope of legislation. Legislation in different states varies in scope, affecting different plans. Some laws apply to all health plans within the state; others may apply only to plans sold through the state’s health insurance marketplace or may exempt specific insurance, such as Medicaid or state employee health insurance. Some legislation applies only to assistance from charitable organizations and not that from manufacturers.
Conclusion
State copay accumulator legislation represents a critical step in safeguarding patient access to necessary medications and ensuring that financial assistance reaches those who need it most. Although challenges remain, the continuing evolution of these laws reflects a commitment to patient-centered healthcare and equitable access to treatments. As more states consider and implement this legislation, the collective impact on public health could be substantial, paving the way for a more supportive and transparent healthcare system.
