Closing the EHB Loophole: Louisiana Leads, But National Action is Needed

"Jason," a Utah AIDS Foundation client, confronted a brutal truth in the wake of his HIV diagnosis: a healthcare system more interested in profits than patients. Faced with a staggering $3,200 co-pay for his HIV medication—well beyond his financial reach—Jason's plight was exacerbated by his insurance company's implementation of a co-pay accumulator policy. This policy effectively nullified the assistance he once relied on, leaving him stranded without his medication for months. "I felt scared and discouraged when I was told I have a $3,200 co-pay to pick up my HIV meds. I don’t even make that much money each month," Jason shared, his voice a stark indictment of a system failing its most vulnerable. His story, spotlighted by The Utah All Copays Count Coalition, underscores a pervasive issue: patients across the nation are cornered into impossible choices between health and financial ruin, casualties of an insurance industry's practices that blatantly prioritize margins over meaningful care.

Understanding the Problem

Jason's heartbreaking story sheds light on interconnected issues fueling the healthcare affordability crisis: co-pay accumulators and the Essential Health Benefits (EHB) loophole. These tactics have a devastating effect on patient well-being, so let's break them down:

Co-pay Accumulators: A Profit-Driven Scheme at the Expense of Patients

These programs allow insurers to take the value of manufacturer-provided coupons or patient assistance and apply it towards an annual deductible, but not towards a patient's out-of-pocket maximum. This means even with generous assistance, patients can face thousands of dollars in additional costs, forcing them to ration medication or abandon treatment altogether. The numbers reveal the widespread impact:

• The AIDS Institute reports that co-pay accumulator adjustment programs (CAAPs) are present in a shocking 66% of individual Affordable Care Act (ACA) marketplace plans nationwide, with some states showing 75-100% of available plans utilizing these tactics.

Co-pay Maximizers: A Further Threat to Affordability

Insurers are increasingly employing an even more severe tactic known as 'co-pay maximizers'. These programs set a patient's co-pay to the full amount of available assistance, even if it's intended to cover an entire year's medication cost. Unlike accumulators, which prevent assistance from counting towards the out-of-pocket maximum, maximizers essentially 'use up' all available assistance in a single payment. This leaves patients facing the full, often unaffordable, cost of medication for the rest of the year. The combined use of maximizers and accumulators is becoming increasingly common, leaving patients with limited options and magnifying the financial burden of life-saving treatments. A staggering 72% of commercially insured beneficiaries in the United States were enrolled in plans with co-pay maximizers as of 2023, according to a Drug Channels analysis.

This highlights the alarming prevalence of these practices and the immense pressure they place on patients struggling to manage chronic conditions.

The Essential Health Benefits (EHB) Loophole: Insurers Exploit Gaps in Coverage

Under the ACA, states have flexibility in selecting the 'essential' healthcare services that insurers must cover. Some insurers manipulate this system by classifying necessary medications (especially for chronic conditions) as 'non-essential'. This lets them continue using co-pay accumulators and maximizers on these medications, further undermining patient affordability.

• Centers for Medicate & Medicaid Services’ (CMS) data reveals that in many states, critical treatments for chronic disease management are not guaranteed coverage under 'essential' benefits. This means patients could be subject to accumulators and maximizers indefinitely, locked in a cycle of escalating costs even when reaching their out-of-pocket maximums.

The takeaway is clear: these practices prioritize the shareholder profits of insurance companies over the health and well-being of patients, especially those battling chronic and complex conditions.

Federal Action – Progress and Pitfalls

The CMS Notice of Benefit and Payment Parameters for 2025 signals a notable yet incomplete step towards remedying the healthcare affordability crisis. It attempts to close the Essential Health Benefits loophole starting in 2027 by mandating routine, non-pediatric dental coverage as an essential benefit. While seemingly tangential, this amendment serves as a precursor to addressing broader coverage issues, demonstrating the potential to mitigate part of the financial burdens that patients like Jason face. However, it underscores a significant gap in the rule's scope—its silence on co-pay accumulators and maximizers.

Limitations of the CMS Rule Change

The rule change’s failure to directly address co-pay accumulators and maximizers leaves a significant gap in patient protection. These payor-driven barriers systematically undermine patient affordability and access, especially for those managing chronic conditions. The absence of direct action against these schemes allows insurers to deploy cost-containment strategies that, while ostensibly designed to control expenditures, place the financial burden squarely on patients.

This oversight perpetuates financial hardship and deepens healthcare disparities. Accumulator and maximizer practices disproportionately affect marginalized populations, highlighting the limitations of regulatory changes that fail to comprehensively address the complex dynamics of healthcare affordability and access.

Without targeted measures to dismantle these financial mechanisms, efforts to expand coverage and close loopholes may achieve only superficial improvements. A significant portion of the population, particularly those managing chronic diseases, will continue to face insurmountable financial barriers to accessing essential treatments. This situation underscores the need for a more holistic approach to healthcare reform—one that confronts the financial mechanisms impairing patient care and seeks to eliminate systemic practices that prioritize profit over patient well-being.

Court Challenges: A Victory Shadowed by Continued Uncertainty

The battle against co-pay accumulators achieved a notable legal milestone when a federal court ruled these practices violated the Affordable Care Act's mandates. Despite this victory, the landscape remains fraught with ambiguity, largely due to the federal government's tepid response. The government’s retraction of its appeal in 2022, while upholding the court's decision, did not establish a nationwide prohibition on co-pay accumulators, leaving insurers in a legal gray area.

The HIV+Hepatitis Policy Institute has spotlighted the risk posed by the federal government's refusal to enforce the court's ruling against co-pay accumulators, shifting focus instead to addressing insurers' classification of certain drugs as “non-essential health benefits.” While the final 2025 Notice of Benefits and Payment Parameters rule curbs the classification of covered drugs beyond state benchmarks as non-essential, the government's inaction on co-pay accumulators marks a troubling disconnect between legal victories and their practical implementation.

This gap between legal wins and real-world application emphasizes the need for interventions at the state level. Louisiana's SB 210 emerges as a key measure, proposing tangible solutions to bridge the gap left by federal inaction and protect patients from the financial burdens imposed by insurers' exploitative tactics.

State Solutions: Louisiana as a Model

Louisiana's Legislative Response with SB 210

In an assertive move to safeguard healthcare affordability and accessibility, Senator Bob Owen's SB 210 targets the mechanisms of co-pay accumulators and the Essential Health Benefits (EHB) loophole. The legislation mandates comprehensive coverage under EHBs and holistic accumulator protections, ensuring all cost-sharing payments contribute towards the ACA's out-of-pocket maximums.

This legislative approach not only challenges the status quo but also highlights Louisiana's proactive stance in addressing healthcare disparities. By mandating that insurers recognize all federally designated EHB services and medications as essential, SB 210 directly confronts insurers' manipulative practices, ensuring patients receive the comprehensive coverage promised under the ACA.

Addressing the ‘Endless Deductible’

In a letter to the Louisiana State Senate Insurance Committee, CANN President and CEO Jen Laws warns that without robust protections like SB 210, insurers can impose what patients call "the endless deductible." This term illustrates the loophole that allows insurers to employ exploitative accounting practices, negating the ACA's intent to cap patient spending on healthcare. SB 210's provisions aim to close this loophole, ensuring patients are not burdened with exorbitant costs for essential treatments, thus preserving the ACA's core promise of affordable care.

In his letter, Laws reveals that Louisiana's health plan benchmarks do not guarantee coverage for essential cancer treatments such as radiation or chemotherapy, underlining the significance of SB 210. By ensuring that expenditures for such critical treatments are counted towards patients' out-of-pocket maximums, the bill offers a lifeline to those facing the daunting financial implications of treating life-threatening conditions. This measure is pivotal in bridging the gap left by the current healthcare system's shortcomings, providing patients with much-needed financial relief and access to life-saving treatments.

A Blueprint for National Reform

Louisiana's initiative serves as a compelling model for tackling the challenges posed by ambiguous EHB classifications, federal inaction, and exploitative co-pay practices. SB 210's success could inspire a wave of legislative efforts across the United States, advocating for a healthcare system that prioritizes patient well-being over payor profits. This approach highlights the potential for state-level innovations to influence national healthcare policy, paving the way for reforms that ensure healthcare accessibility and affordability for all, especially those living with chronic and life-threatening conditions.

Call to Action

The legislative changes proposed in Louisiana represent a critical juncture in the fight for healthcare affordability and access. To realize the full potential of these reforms, a concerted effort is needed from key stakeholders across the healthcare ecosystem:

For U.S. Policymakers:

Legislators at both state and federal levels must embrace proactive strategies to close the EHB loophole and regulate co-pay accumulator and maximizer use. Crafting and enacting policies that guarantee comprehensive coverage of essential health benefits and ensure all forms of patient assistance contribute towards out-of-pocket maximums are essential steps toward protecting patients from undue financial strain. Supporting state-level initiatives like Louisiana's SB 210 can serve as a foundation for broader national reforms, underscoring the importance of legislative action in safeguarding patient interests.

Healthcare Providers:

Medical professionals and healthcare institutions play a crucial role in advocating for their patients' rights and navigating the evolving insurance landscape. By staying informed about the implications of insurance policies on treatment access and affordability, healthcare providers can better support their patients in accessing the care they need. Engaging in policy discussions and supporting legislative efforts to address the EHB loophole and co-pay accumulator issue are necessary contributions to the broader push for healthcare reform.

Community Advocates and Patients:

The voices of patient advocacy groups and people affected by the healthcare system's complexities are instrumental in driving change. By raising awareness about the challenges posed by the EHB loophole and co-pay accumulators, mobilizing communities to demand reform, and sharing personal stories, advocates can influence policy decisions and encourage insurers to prioritize patient needs. Engaging in public discussions and advocating for policies that protect patients from harmful insurance practices are critical steps in building a more equitable healthcare system.

Actionable Next Steps:

• Reach out to state and federal representatives to express support for policies that ensure comprehensive coverage of essential health benefits and address the challenges posed by co-pay accumulators.

• Educate oneself and others about the impact of the EHB loophole and co-pay accumulators on healthcare affordability and access, leveraging resources and information provided by reputable patient advocacy organizations.

By uniting in the pursuit of meaningful healthcare reform, stakeholders across the spectrum can contribute to a future where healthcare accessibility and affordability are realities for all, especially for those facing chronic and life-threatening conditions. The journey toward closing the EHB loophole and eliminating unfair insurance practices demands collective action and unwavering commitment to patient well-being. Let's join forces to advocate for a healthcare system that truly serves the needs of its patients, ensuring equitable access to essential treatments and protections against financial hardship.

CMS Sides with the Devil: Insurers’ Co-Pay Accumulators Remain…for Now

The Affordable Care Act (ACA) was revolutionary in how prescriptive statutory language was in ensuring health insurers (payers) covered costs associated with pre-existing conditions, if they accepted even a penny of federal funding. The trade off was a simple theory: “cover more people and their entire health and we’ll make sure you’re still profitable”. There were hundreds of pages of caveats, definitions, incentives for public programs, pharmaceutical research, and regulatory authority passed to state and federal agencies. Everyone got a piece of the pie to the end benefit of Americans for whom health care had been out of reach for the majority of their lives. We would be healthier together by simply providing people the care we need and reducing overall costs. However, as these things go, payers are creative and pay their lawyers handsomely to find ways around that basic agreement. As payers fight to “contain costs”, co-pay accumulator programs are one of the most disingenuous methods to limit consumer access to quality care and pad payers profit margins.

From issues of discriminatory plan design, or making consumers pay the highest cost-sharing for medications which are only used to treat certain conditions like HIV, to limiting provider networks in such a way that a patient requiring a surgery or emergency care results in surprise bills to toxic practices known as “utilization management” (including, but not limited to, abusive prior authorizations and step therapy, also known as “fail first”), payers have paid their lawyers quite well to find loopholes or design new problems in order to maintain their profits. The ACA’s medical loss ratio (MLR) rule, also known as 80-20/85-15 rule (in general requiring 80% or 85% of a plans premiums to actually be used on costs of care or pay back to balance to consumers) has resulted in a startling 2 billion dollars to be paid back to consumers in 2019 alone. But the rule doesn’t necessarily count other income payers can produce by way of cost-sharing or deductible payments, co-pays (a fixed price typically paid after deductibles are met for care and medications), and – now, more commonly – “co-insurance” (a percentage price typically paid after deductibles are met for care and medications) as part of that rule. The result is consumers and those who would like to see us get the quality, individualized care we need are being put on the hook for payers’ greed.

Patient advocacy often has interesting bedfellows. And at the intersection of our care interests and that of industry, pharmaceutical manufacturers have found what can arguably described as a somewhat socialist model by way of patient assistance programs, often enacted as co-pay card or discount programs aimed at directly benefiting patients by taking care of the patients’ share of a medication’s cost. These programs are quite frequently limited by income or if a person is insured. The idea being to make sure the most costly medications make their way into the hands of the people who need them most and can least afford them. In this, our interests as patients absolutely converge with that of manufacturers. We want quality therapies made available to us. However, when a medication “goes generic”, often these programs are no longer available as a less costly, generic medication is preferred by the payer unless a patient fails that particular medication (see: step therapy, “fail-first”). The problem is generic medications are not held to extraordinarily strict requirements for Food and Drug Administration (FDA) approval that brand name medications are held to. Indeed, earlier this year, Vice offered a fantastic explanation of the problem with preferencing generic medications by payers (both public and private) is harmful to patients and why our generics “approval” process is a threat to the health and safety of patients. It’s no wonder, with the lax oversight of generic medications and the offer of payment assistance from manufacturers that patients would want access brand name and newer medications on the market.

One of the most amazing benefits of patient assistance programs is, in theory, because they’re meant to cover the patient’s cost-sharing obligations, these out-of-pocket (OOP) costs should apply to the patient’s deductible and OOP maximums and reduce the cost burden to patients for future care throughout the plan year. Right?

Wrong.

Payers have near uniformly adopted a practice known as “accumulator adjustment programs”, or co-pay accumulators, in which a payer basically says to a patient and a manufacturer “all for me, none for thee”, taking the entirety of the benefit offered by a patient assistance program and not crediting the patient with those funds received against the patient’s deductible, co-pay or co-insurance, or out-of-pocket maximums. To boot, manufacturers have zero control over this practice and often don’t know when it’s happening until a patient complains about the experience. Payers justify this move as “cost-containment” and disincentivizing patients from seeking more costly medications – which translates to newer, more effective, safer medications (go back to the problem with generic approvals above).

So far, the Centers for Medicare and Medicaid Services (CMS), the primary authority in which payment rules are issued from the federal government to payers, have generally made extraordinary effort to ensure protect the interests of patients and those who align with our interest. In the instance of CMS’s newest rebate rule, CMS chose to side with payers for some inexplicable reason. The rule states pharmaceutical manufacturers, not payers, would have to count these direct-to-consumer assistance programs among “best price” calculations, which govern Medicaid rebate price setting or what the government pays for a medication, if a patient didn’t receive 100% of the benefit of the assistance program. Previous rules on what to consider in calculating “best price” were generally limited to prices negotiated within industry movers inside the supply chain, not that of end users. The theory goes like this: “if ultimately this assistance program is paying an insurer’s bottom line and not helping patients, then it should be considered a price you (manufacturers’) negotiated. You were planning for that in setting your prices anyways, right?” Pop quiz answer: wonky negotiations with payers is not what manufacturers were planning on in designing income limited, only-accessible-by-consumers-asking for-it assistance programs. The solution CMS offered was for manufacturers to ensure patients received the intended benefit by requiring patients to pay for a medication up front and then ask for reimbursement – a process that only makes medication access and affordability infinitely more complicated and burdensome for patients.

In the end, CMS decided that in response to an excessively abusive payer practice that disadvantages patients, the answer was to create further barriers to accessing care for patients rather than to reduce them.

Let’s make this real and “back of the envelope” this practice in terms of realized patient experiences:

Monthly Income: $2,583 (based on average US income in 2019 provided by the Census Bureau)
Monthly premium: $304 (lowest cost local silver deductible is $3,400, OOP maximum is $8550, co-insurance is 20-40%)

Absent a public payer intervention, co-pay accumulators might allow a patient assistance program to cover the estimated $600 per month co-insurance would demand for a certain medication, however, I’m not likely to meet my deductible or maximum OOP for the year at all. With local rent costing about $1000 per month, a car payment and car insurance in order to work (there’s no meaningful public transit in the vast majority of the country), food costs, utilities, etc. Even with federal subsidies provided via the health care market place, every month, I’m in the negative. Which means I can’t afford to see my doctor or get my quarterly labs, which means I can’t get my medication in the first place.

However, without the application of a co-pay accumulator, accessing just 3 month’s worth of a patient assistance program would meet my deductible and maximum OOP costs for the year. I don’t have to worry about at least $200 per month in medical costs. And one less financial strain is off my shoulders.

For the vast majority of us, our medications are not a luxury item. They’re not something we can afford to pay for up front and mail-in a rebate request and wait months for. In doing so, CMS not only suggests an increase to the paperwork burden on patients and manufacturers alike, CMS also seeks to increase barriers to accessing life saving medications to begin with.

All to the benefit (read: profit) of payers. So it’s no wonder the trade organizations, Pharmaceutical Research & Manufacturers of America (PhRMA) chose to initiate a lawsuit to halt the implementation of CMS’s backwards and punitive rule.

While patient advocates may spar readily about the role of industry among advocates, we should also recognize actions that align with our own interests on their face. Yes, PhRMA may be leading up this suit - and CMS should listen to the needs of patients, reverse course, and voluntarily pull this rule.

What a Narrowly Divided Senate Means for Health Policy

On January 5th, Reverend Raphael Warnock and Jon Ossoff defeated Senators Kelly Loeffler and David Perdue in the Georgia Senate run-off elections, respectively. Democrats narrowly winning both Georgia Senate seats also means Democrats have narrowly won the Senate, dividing seats 50-50 between members who caucus with Democrats and Republicans with Vice President-elect Harris empowered to cast any tie-breaking votes and handing the incoming Biden administration a unified government.

While those with lofty ambitions on policy and legislative issues are cheering, there’s good reason to consider the need for moderating what can be expected from the 117th Congress: Democrats aren’t always on agreement on major issues like direct payment amounts as part of COVID relief or Medicare For All. The Biden administration will likely need to rely heavily on the regulatory powers allowed to federal agencies – which makes the prospective appointment of Xavier Becerra to lead Health and Human Services make more sense than it perhaps did on the surface. After all, who appoints an attorney to lead a health care agency?

The Trump administration made dramatic regulatory moves with regard to health care, targeting non-discrimination rules in health care, the Affordable Care Act including attempting to get the legislation declared unconstitutional by the Supreme Court, drug pricing, and championed legislative changes eliminating individual mandate penalty. While a judge has already temporarily blocked Trumps’ effort to tie drug prices to that of other nations’ prices and the Supreme Court has given the green light to recently-revived Food and Drug Administration rules on abortion pill access, these issues are regulatory in nature. The Biden administration could simply choose not to defend these moves in court change these regulations. While state push back is likely, a lack of Congressional challenge against these moves may help smooth the way for institutional changes.

It’s largely expected that among Biden’s first moves regarding health care will include expanding COVID relief measures and vaccine distribution plans, rescind the Mexico City policy (also known as the “Global Gag Rule”), “expand[ing] access to high-quality health care for Lesbian, Gay, Biden, Transgender, and Queer+ individuals” (or moving quickly to rescind the “Provider Conscience” rule), and reversing the 23% rate cut to 340B entities. With the help of a unified House and Senate, among Biden’s first accomplishments may be a legislative “fix” to the Affordable Care Act challenge awaiting ruling from the Supreme Court. Other campaign promises from Biden include seeking legislation to end HIV criminalization and increasing research into harm reduction models, expanding syringe services programs, and substance treatment funding – an issue Biden has evolved on and largely due to bearing witness and supporting his son through.

Other moves to watch for:

Strengthening the Affordable Care Act:
                - A regulatory move recalculating and increasing subsidies for Marketplace plans
                - Restoring Marketplace Navigator funding
                - Returning the open enrollment period to 90 days
                - Rescinding a proposed rule on 1332 waivers allowing states to opt-out of the Marketplace
                - Changes to regulations regarding short-term policies and association health plans (including reduced allowable coverage periods and requiring coverage of pre-existing conditions, including pregnancies, HIV, HCV, and transgender identity among others)
                - Reduce documentation burden for subsidies and Special Enrollment Periods
                - Expand the definition of qualifying life events and rules regarding special enrollment periods
                - Enforce mental health and substance abuse coverage parity
Strengthening Medicaid:
                - Rescind, reject, and stop defending 1115 waivers seeking work requirements
                - Encourage 1115 waivers to include the impacts of increasing coverage
                - Revise increased eligibility verification for Medicaid
                - Encourage policies regarding presumptive eligibility outside of hospitalization and emergency situations
                - Review and revise reimbursement schedules for Rural Hospitals
LGBTQ Health Equity:
                - Issue guidance and seek funding to address mental health services and support staff in schools
                - Reinstitute and/or strengthen Obama era guidance regarding transgender students and Title IX protections
                - Revise and strengthen Affordable Care Act, Section 1557 non-discrimination rules protecting women, Lesbian, Gay, Bisexual, Transgender, and Queer people, and people living with pre-existing conditions like HIV or HCV (in which the Trump administration would allow payers and providers to refuse care
                - Rescind the Trump era ban on transgender people serving in the military
                - Reverse or rescind Trump era “religious conscience” applying to civil rights laws – use regulatory power to include Lesbian, Gay, Bisexual, Transgender, and Queer people in civil rights protections in health, housing, and labor
                - Expanding data collection policies to include sexual and gender identities

While some may view the heads of regulation making agencies as “unelected officials”, in many ways, who we elect to be the executive is very much choosing who leads the agencies that impact our lives on a daily basis. There is much work to do for the Biden administration on the regulatory front and unified, carefully crafted legislation speaking to these issues may well help cement these changes beyond political party ping pong.