Biden’s Inaction Leaves Copay Assistance in Limbo
Inflated prescription drug costs in the United States continue to place a significant burden on people living with chronic conditions. Copay assistance programs, designed to help people afford their medications, have become essential. Yet recent policy decisions and industry practices have put these programs at risk, potentially jeopardizing access to necessary treatments.
The Biden Administration's recently proposed 2026 Notice of Benefit and Payment Parameters (NBPP) rule omits crucial regulations that patient advocates have long been demanding. This inaction allows insurers and pharmacy benefit managers (PBMs) to continue profiting from billions of dollars of drug manufacturer copay assistance intended for patients.
The State of Copay Assistance
Copay assistance programs, primarily offered by pharmaceutical manufacturers, provide financial support to help cover out-of-pocket costs for prescription medications. As health insurance plans increasingly shift costs to patients through higher deductibles and copayments, these programs have become crucial.
According to the latest data from The IQVIA Institute, manufacturer copay assistance offset patient costs by $23 billion in 2023, a $5 billion increase from the previous year. This figure represents 25% of what retail prescription costs would have been without such assistance. Over the past five years, copay assistance has totaled $84 billion, highlighting its importance in maintaining access to medications.
Despite the significance of copay assistance, copay accumulator and maximizer programs accounted for $4.8 billion of copay assistance in 2023—more than double the amount in 2019. Implemented primarily by pharmacy benefit managers (PBMs) and insurers, these programs prevent assistance from counting towards patients' deductibles and out-of-pocket maximums. This practice effectively nullifies the intended benefit of copay assistance, leaving people to face unexpected and often unaffordable costs later in the year.
Recent scrutiny of PBMs has brought attention to these practices. As discussed in our recent article on PBMs, the Federal Trade Commission (FTC) has filed a lawsuit against the largest PBMs for alleged anticompetitive practices that inflate drug costs and limit access to medications. These developments underscore concerns about how PBM practices, including the implementation of copay accumulator programs, impact medication affordability and access.
The impact on access is serious. IQVIA reports that in 2023, patients abandoned 98 million new therapy prescriptions at pharmacies, with abandonment rates rising as out-of-pocket costs increase. This trend highlights the critical role copay assistance plays in helping people not only initiate but also maintain their prescribed treatments.
Public opinion strongly supports action on this issue. A Kaiser Family Foundation survey found that 80% of adults believe prescription drug costs are unreasonable, with broad support for various policy proposals to lower drug costs. This sentiment reflects the public's recognition of the financial challenges faced in accessing necessary medications.
The Legal and Regulatory Landscape
The regulatory environment surrounding copay assistance programs has been in flux, with significant developments in recent years. On September 29, 2023, a federal court struck down a rule that allowed insurers to decide whether copay assistance would count towards patients' out-of-pocket maximums. This ruling reinstated the 2020 NBPP rule, which required insurers to count copay assistance towards patient cost-sharing, except for brand-name drugs with available generic equivalents.
Despite this, the federal government declared that it would not enforce the court's decision or the 2020 NBPP rule until new regulations are issued. This inaction has left patients facing continued uncertainty about the status of their copay assistance.
On January 16, 2024, the Biden Administration dropped its appeal of the court decision. While this action confirms that the 2020 NBPP rule will generally apply until new rules are issued, the lack of enforcement leaves plans and insurers in a gray area regarding their copay accumulator programs.
At the state level, there has been a growing movement to address copay accumulator programs. As of 2024, 21 states, the District of Columbia, and Puerto Rico have enacted laws addressing the use of these programs by insurers or PBMs. These laws generally require any payments made by or on behalf of the patient to be applied to their annual out-of-pocket cost-sharing requirement. While these state actions provide important protections, they do not cover all insurance plans, particularly those regulated at the federal level.
The 2026 Notice of Benefit and Payment Parameters Proposal
The proposed 2026 NBPP rule, released by the Centers for Medicare & Medicaid Services (CMS), has drawn criticism from patient advocacy groups for significant omissions related to copay assistance and essential health benefits (EHB).
Notably absent from the proposed rule are regulations clarifying whether copay assistance will count toward patient cost-sharing. This omission perpetuates uncertainty created by previous conflicting rules and court decisions, allowing insurers and PBMs to continue implementing copay accumulator programs that can leave people with unexpected and unaffordable out-of-pocket costs.
The proposal also fails to include a provision to ensure that all drugs covered by large group and self-funded plans are considered essential health benefits, despite previous indications that such a provision would be forthcoming. This failure to close the EHB loophole allows employers, in collaboration with PBMs and third-party vendors, to designate certain covered drugs as "non-essential," circumventing Affordable Care Act (ACA) cost-sharing limits designed to protect people from excessive expenses.
By exploiting this loophole, plan sponsors can collect copay assistance provided by manufacturers without applying it to beneficiaries' cost-sharing requirements. This practice effectively doubles the financial burden on patients: first, by accepting the copay assistance, and second, by requiring them to pay their full out-of-pocket costs as if no assistance had been provided.
Recent research by the HIV+Hepatitis Policy Institute has revealed that over 150 employers and insurers are taking advantage of the EHB loophole. This list includes:
Major companies such as Chevron, Citibank, Home Depot, Target, and United Airlines
Universities including Harvard, Yale, and New York University
Unions like the New York Teamsters and the Screen Actors Guild
States such as Connecticut and Delaware
Insurers, including several Blue Cross/Blue Shield plans
Patient advocacy groups have reacted strongly to these omissions. Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, stated, "Every day these rules are delayed is another day that insurers and PBMs are pocketing billions of dollars meant for patients who are struggling to afford their drugs." This sentiment reflects the frustration of many who have long advocated for stronger protections.
The widespread exploitation of the EHB loophole underscores the urgent need for federal action to protect patients from these practices. The failure to address these critical issues in the 2026 NBPP proposed rule highlights a significant setback in efforts to improve medication affordability and access for people living with chronic conditions.
The Impact on Patients: Data and Experiences
The real-world impact of copay accumulator programs and the EHB loophole is reflected in both data and personal experiences. IQVIA reports that patient out-of-pocket costs reached $91 billion in 2023, an increase of $5 billion from the previous year. This rise in costs comes despite the $23 billion in copay assistance provided by manufacturers, highlighting the growing financial burden on patients.
Prescription abandonment is particularly concerning. Patients abandoned 98 million new therapy prescriptions at pharmacies in 2023, with abandonment rates increasing as out-of-pocket costs rise. More than half of new prescriptions for novel medicines go unfilled, and only 31% of patients remained on therapy for a year. These statistics highlight the direct link between cost and medication adherence.
People across the country are facing these challenges. For example, a mother whose daughter lives with cystic fibrosis shared her experience with a copay accumulator program. In early 2019, her family's out-of-pocket cost for her daughter's medication suddenly jumped from $30 to $3,500 per month when their insurance plan stopped applying copay assistance to their deductible. This unexpected change forced the family to put the cost on credit cards, creating significant financial strain and unnecessary medical debt.
Similarly, a person living with psoriasis faced steep increases in medication costs when their insurance company stopped counting copay assistance towards their deductible. The copay rose from $35 to $1,250 monthly, leaving them with only $26 from their disability payment after covering the copay.
These stories are not isolated incidents. People living with conditions such as HIV, hepatitis, multiple sclerosis, and hemophilia are facing similar challenges. The impact extends beyond financial stress, affecting medication adherence and, ultimately, health outcomes. For many, the choice becomes one between essential medications and other basic needs such as food and shelter—a decision no one should have to make.
Policy Recommendations and Advocacy Efforts
Patient advocacy groups are intensifying efforts for policy changes at both the federal and state levels. The All Copays Count Coalition, comprising over 80 organizations representing people living with serious and chronic illnesses, has been at the forefront of these efforts. In a letter to federal officials, the coalition urged for a revision of the cost-sharing rule to include clear protections ensuring that copayments made by or on behalf of a patient are counted towards their annual cost-sharing contributions. Specific recommendations include:
Maintaining the protections included in the 2020 Notice of Benefit and Payment Parameters.
Ensuring that copay assistance counts for medically appropriate medications, even when generic alternatives are available.
Limiting Health Savings Account-High Deductible Health Plan (HSA-HDHP) carve-outs to situations where using copay assistance would result in HSA ineligibility.
At the state level, advocacy efforts have led to the passage of laws restricting copay accumulator programs in 20 states, the District of Columbia, and Puerto Rico as of summer 2023. However, these state-level protections do not cover all insurance plans, particularly those regulated at the federal level, highlighting the need for comprehensive federal action.
Advocates are calling for:
Immediate enforcement of the 2020 NBPP rule, requiring insurers to count copay assistance towards patient cost-sharing in most cases.
Swift action to close the essential health benefits loophole for all plans, including large group and self-funded plans.
Increased oversight and regulation of PBM practices, particularly regarding copay accumulator and maximizer programs.
Passage of comprehensive federal legislation to protect those relying on copay assistance.
As Carl Schmid emphasized, "While they have gone on record that they will issue these rules, the clock is ticking and there isn't much time left." This reflects the growing frustration among patient advocates with the administration's delays in addressing these issues.
Policymakers must act swiftly to close the essential health benefits loophole and ensure that all copay assistance counts towards patients' out-of-pocket costs. Stakeholders across the healthcare ecosystem—from insurers and PBMs to pharmaceutical companies and patient advocacy groups—must collaborate to develop solutions that prioritize access and affordability. The health and well-being of millions depend on these critical policy changes.
The Great Disenrollment: Examining Medicaid's Post-Pandemic Shift
The Medicaid unwinding process that began in April 2023 has significantly impacted healthcare access and coverage retention across the United States. The unwinding, triggered by the end of pandemic-era continuous enrollment provisions, led to substantial shifts in Medicaid enrollment and revealed both strengths and weaknesses in our healthcare system. The process disproportionately affected communities of color and highlighted the need for targeted policy interventions to maintain healthcare access for vulnerable groups, including people living with HIV (PLWH).
The Scope of Medicaid Unwinding
During the COVID-19 pandemic, the Families First Coronavirus Response Act implemented the continuous enrollment provision in March 2020. This policy prohibited states from disenrolling Medicaid beneficiaries in exchange for enhanced federal funding, ensuring that people maintained health coverage during a time of unprecedented health and economic uncertainty. As a result, Medicaid enrollment surged from 71 million people in February 2020 to 94 million by April 2023, according to a Kaiser Family Foundation (KFF) analysis.
The end of the continuous enrollment provision on March 31, 2023, initiated a complex process of eligibility redeterminations for all Medicaid enrollees—a task of immense scale and complexity. By the end of the unwinding period, over 25 million people had been disenrolled from Medicaid, while over 56 million had their coverage renewed, as reported by KFF. The overall disenrollment rate stood at 31%, with significant variation across states. For instance, Montana reported a 57% disenrollment rate, while North Carolina's rate remained below 20%.
Systemic Challenges in the Unwinding Process
One of the most concerning aspects of the unwinding process was the high rate of procedural disenrollments. Of those who lost coverage, 69% were disenrolled for procedural reasons, such as not returning renewal paperwork, rather than being determined ineligible. This suggested that many people who lost coverage may have still been eligible for Medicaid but faced significant challenges navigating the renewal process successfully.
The Government Accountability Office (GAO) highlighted that administrative barriers contributed significantly to these procedural disenrollments. These barriers included:
Outdated Technology Systems: At least 11 states reported that their systems were old or difficult to use, making it challenging to produce real-time analytics essential for processing renewals effectively. This technological lag complicated efforts to implement necessary changes swiftly and efficiently.
Staffing Shortages: High turnover rates among eligibility workers led to vacancy rates reaching up to 20% in some states. Reports of low morale and burnout further affected the workforce's ability to handle the increased workload during the unwinding process.
Communication Barriers: States struggled to effectively engage people in the renewal process, particularly those facing language barriers. Non-English speakers often encountered longer wait times and struggled to reach assistance through call centers. These issues were compounded by a lack of robust state communication and engagement strategies.
Complex Paperwork: The renewal process often involved complicated forms and documentation requirements, which proved challenging for many enrollees to navigate, especially those with limited literacy or language skills.
Dr. Benjamin Sommers, a health policy expert at Harvard T.H. Chan School of Public Health, noted during the process, "The high rate of procedural disenrollments is particularly troubling. It indicates that we're not just seeing people leave Medicaid because they no longer qualify, but because they're struggling with the administrative hurdles of the renewal process."
These challenges led to frustration among enrollees and advocacy groups, highlighting the need for more streamlined and accessible renewal processes. The experience underscored the importance of investing in modernized eligibility systems, adequate staffing, and comprehensive communication strategies to ensure that eligible patients can maintain their coverage during future eligibility redeterminations.
National Enrollment Trends and State-Level Variations
Despite significant disenrollments during the unwinding process, Medicaid enrollment remained higher than pre-pandemic levels. As of May 2024, 81 million people were enrolled in Medicaid, an increase of about 10 million compared to pre-pandemic enrollment. However, this growth was not uniform across all populations. While adult enrollment remained over 20% above February 2020 levels, child enrollment was only about 5% higher.
Several factors influenced these disparities:
The pandemic's economic impact led to more adults becoming eligible for Medicaid due to job losses and income reductions.
States that expanded Medicaid under the Affordable Care Act saw more substantial increases in adult enrollment.
Children's enrollment remained relatively stable due to higher pre-pandemic enrollment rates and broader eligibility criteria through programs like the Children's Health Insurance Program (CHIP).
The impact of the unwinding process varied significantly across states, reflecting differences in policies, system capacities, and approaches. States that expanded Medicaid under the Affordable Care Act generally showed higher retention rates. Additionally, states that adopted strategies to streamline the renewal process, such as increasing ex parte (automated) renewals, saw better outcomes.
For example, Arizona, North Carolina, and Rhode Island achieved ex parte renewal rates exceeding 90%, while states like Pennsylvania and Texas had rates of 11% or less. These differences underscored the importance of state-level policies and systems in determining unwinding outcomes.
The Centers for Medicare & Medicaid Services (CMS) reported that states with higher ex parte renewal rates tended to have modernized eligibility systems that could effectively leverage data from other programs to confirm eligibility. This reduced the administrative burden on patients and helped maintain continuous coverage.
These variations highlighted the critical role of state-level decision-making and infrastructure in shaping Medicaid enrollment outcomes during and after the unwinding process. They also pointed to potential best practices for maintaining coverage and streamlining enrollment processes in the future.
Racial and Ethnic Disparities in Medicaid Disenrollment
A particularly concerning aspect of the unwinding process is its disproportionate impact on communities of color. According to the Southern Poverty Law Center (SPLC), more than half of the people who lost coverage were people of color. This disparity is exacerbated by existing barriers to healthcare access. The SPLC notes that communities of color face more barriers to healthcare access, such as limited internet, transportation, and inflexible job schedules.
The impact is particularly severe in states that have not expanded Medicaid. The SPLC report highlights that "residents from Alabama, Florida, Georgia, and Mississippi make up over 40% of the adults in the coverage gap nationwide. People of color make up about 60% of the coverage gap nationwide."
The Human Impact of Coverage Loss
The impact of coverage loss extends beyond statistics. Personal stories highlight the real-world consequences of the unwinding process. Justin Gibbs, a 53-year-old from Ohio, had to go without blood pressure medication for a week after losing his Medicaid coverage in December, according to CNN. Such disruptions in care can have serious health implications, particularly for people managing chronic conditions.
A KFF survey reveals the broader health impacts of coverage loss. Among those who became uninsured after losing Medicaid:
75% reported worrying about their physical health
60% worried about their mental health
56% said they skipped or delayed getting needed health care services or prescription medications
Impact on HIV Care and Policy Implications
The Medicaid unwinding process also highlighted significant challenges in maintaining healthcare access for people living with HIV (PLWH). While specific data on Medicaid disenrollment among PLWH during the unwinding were limited, general trends among vulnerable populations indicated potential risks. A KFF report found that many of those who lost Medicaid coverage experienced increased out-of-pocket costs, interruptions in medication adherence, and deteriorating health outcomes. These challenges were particularly critical for PLWH, for whom continuous access to antiretroviral therapy (ART) is essential.
Key considerations for PLWH during the unwinding process included:
Continuity of ART: Ensuring uninterrupted access to antiretroviral medications is mandatory for maintaining viral suppression and overall health.
Role of Ryan White HIV/AIDS Program: This program played a critical role in filling coverage gaps, but it's not a substitute for comprehensive health insurance.
Targeted Outreach: Community-based organizations and AIDS Service Organizations (ASOs) were essential in providing specialized support and enrollment assistance to PLWH.
Data Collection: Improving data collection on Medicaid disenrollment rates among PLWH can inform targeted interventions and policy adjustments.
The unwinding process underscored the need for policies that safeguard continuous healthcare access for PLWH. Implementing strategies that address these specific needs can help prevent coverage disruptions and improve overall health outcomes for people living with HIV.
Economic Implications of the Unwinding Process
The Medicaid unwinding process had significant economic implications for patients, healthcare providers, and states. For people who lost Medicaid coverage, the consequences often included financial instability and increased medical debt. A study by the Urban Institute found that adults who experienced a gap in Medicaid coverage were more likely to report problems paying medical bills and to have medical debt.
Healthcare providers, particularly safety-net hospitals and community health centers, faced increased rates of uncompensated care as a result of the unwinding process. This strained their financial resources and potentially affected their ability to provide care to their communities. The Commonwealth Fund noted that increased uninsured rates could lead to higher healthcare costs in the long term due to delayed care and increased emergency room visits.
For states, the unwinding process presented complex economic challenges. As the enhanced federal matching rate provided during the pandemic phased out, many states grappled with increased administrative costs associated with the unwinding process. A report from the Brookings Institution highlighted that states faced a complex set of trade-offs as they navigated the unwinding process, balancing the need to control Medicaid spending with the imperative to maintain access to care for vulnerable populations.
The full economic impact of the unwinding process continues to unfold, with ongoing implications for state budgets, healthcare provider finances, and patient economic well-being. These insights will be important in shaping future Medicaid policies and developing strategies to mitigate economic challenges associated with coverage transitions.
Policy Recommendations and Best Practices
To address these challenges, several key strategies have been identified:
Streamlining Renewal Processes: Increasing ex parte (automated) renewal rates can reduce the burden on people and minimize procedural disenrollments. For instance, Louisiana achieved a 49% ex parte renewal rate by leveraging data from other public benefit programs and improving data matching processes.
Targeted Outreach: Conducting outreach to vulnerable populations, including communities of color and people with chronic conditions, can help reduce disenrollments. The Ohio Department of Medicaid partnered with community-based organizations for door-to-door outreach in areas with high procedural disenrollments.
Implementing Continuous Eligibility: Policies that provide 12-month continuous eligibility can stabilize coverage and reduce churn. Oregon implemented a two-year continuous eligibility policy for children under six.
Enhanced Federal Oversight: Strengthening monitoring and enforcement of federal requirements ensures state compliance. CMS should leverage new authorities to require corrective action plans from states with high procedural disenrollments.
Improving Data Collection: Robust data collection and timely reporting enable quick identification of problems. States should report disaggregated data on disenrollments by race, ethnicity, and other demographics to address disparities.
Leveraging Technology: Modernizing eligibility systems improves accuracy and efficiency. Implementing text messaging, email communication, and mobile-friendly online portals helps people update information and complete renewals more easily.
Expanding Presumptive Eligibility: Allowing qualified entities to make preliminary eligibility determinations provides temporary coverage while full applications are processed, ensuring continuous access to care.
Addressing Systemic Inequities and Long-Term Solutions
The unwinding process exposed systemic inequities within the healthcare system, particularly affecting communities of color and rural areas. Long-term solutions include:
Investing in Underserved Communities: Enhancing access to healthcare services in marginalized areas.
Improving Health Literacy: Providing education to help people understand their health coverage options and navigate the system.
Strengthening Social Safety Nets: Expanding programs that address social determinants of health, such as housing, nutrition, and transportation.
Without significant policy interventions, coverage losses could lead to worse health outcomes and increased disparities, as emphasized by the Urban Institute.
Conclusion
The Medicaid unwinding process revealed both challenges and opportunities in our healthcare system. It highlighted the need for more efficient, equitable, and resilient approaches to health coverage. Key lessons include the importance of streamlined processes, targeted outreach, and robust oversight.
Moving forward, policymakers, healthcare providers, and advocates must work together to implement solutions that ensure continuous, accessible care for all, especially vulnerable populations. This effort is not just about health policy—it's a matter of equity and human rights.
As we continue to navigate the evolving healthcare landscape, our goal should be to build a system that provides stable, continuous coverage and leaves no one behind. This commitment is essential for improving health outcomes, reducing disparities, and strengthening our nation's overall health infrastructure.
How the IRA's Price Controls Could Backfire on Patients
For millions of Americans, health insurance offers a false promise. Despite paying premiums, deductibles, and copays, many still find themselves struggling to afford essential healthcare. In fact, a recent survey found that a staggering 43% of adults with employer-sponsored insurance—often considered the gold standard of coverage—find healthcare difficult to afford. This affordability crisis is poised to worsen, as the latest National Health Expenditure projections from the Centers for Medicare & Medicaid Services (CMS) reveal a troubling trend: while government spending on prescription drugs is projected to decrease, patient out-of-pocket costs are expected to rise. The projections forecast an 8.9% increase in hospital expenditures, coupled with a 1.4% decrease in retail prescription drug spending. This shift, driven in part by the Inflation Reduction Act's (IRA) price control provisions, threatens to undermine the law's intended goal of affordable healthcare and exacerbate existing health inequities. While the IRA aims to lower drug costs, its focus on price controls, rather than comprehensive patient protection mechanisms, is creating misaligned incentives that could backfire on the very people it aims to help.
The IRA's Price Controls: A Double-Edged Sword
The IRA's approach to lowering drug costs centers on empowering the government to directly negotiate prices with pharmaceutical companies. This change tackles a provision in the Medicare Part D program known as the "non-interference" clause, which previously prevented the government from directly negotiating drug prices. As a Kaiser Family Foundation (KFF) issue brief explains, "The Part D non-interference clause has been a longstanding target for some policymakers because it has limited the ability of the federal government to leverage lower prices, particularly for high-priced drugs without competitors." While this "non-interference" clause has long been a target for reform, the IRA's implementation creates a ripple effect that extends beyond simply lowering the sticker price of medications. The Congressional Budget Office (CBO) estimates that these drug pricing provisions will reduce the federal deficit by $237 billion over 10 years, suggesting a significant shift in spending away from the government. However, this shift comes at a cost. The IRA's emphasis on price controls, rather than comprehensive patient protection mechanisms, disrupts existing rebate structures that have been crucial in expanding access to medications, particularly for low-income patients and those with chronic conditions.
Programs like 340B and Medicaid rely on a system of manufacturer rebates to make medications more affordable. In essence, drug companies provide rebates to these programs in exchange for having their drugs included on formularies and made available to a large pool of patients. These rebates help offset the cost of medications, allowing safety-net providers to stretch their limited resources and serve more patients. However, the IRA's price controls could disrupt this delicate balance. By directly negotiating lower prices with manufacturers, the government might inadvertently reduce the incentive for companies to offer substantial rebates to programs like 340B and Medicaid. This could lead to higher costs for these programs and ultimately limit access to medications for vulnerable populations.
This means that programs like 340B and Medicaid, which rely on manufacturer rebates to offset costs and provide affordable medications to vulnerable populations, could be significantly undermined by the IRA's price control measures.
Further complicating the issue is the potential for pharmaceutical companies to adapt to the IRA's price controls by strategically setting higher launch prices for new drugs. This tactic allows them to recoup potential losses from negotiated prices in the future, effectively shifting the cost burden onto other payers, including patients. The CBO projects that this trend of higher launch prices would disproportionately impact Medicaid spending, placing a greater strain on a program already facing significant enrollment fluctuations and budgetary pressures. The KFF brief warns that, "Drug manufacturers may respond to the inflation rebates by increasing launch prices for drugs that come to market in the future." This means that while the IRA might appear to lower drug costs in the short term, it could inadvertently fuel a long-term trend of rising prices for new medications, ultimately impacting patient affordability and access to innovative therapies.
Hospitals: Benefiting from the System While Patients Pay the Price
The CMS projections forecast an alarming 8.9% increase in hospital expenditures, raising questions about the drivers of this unsustainable growth. A closer look reveals a troubling connection between this trend and the 340B Drug Pricing Program, a federal initiative designed to help safety-net hospitals provide affordable medications to low-income patients. The CBO's analysis of 340B spending reveals an explosive 19% average annual growth from 2010 to 2021, significantly outpacing overall healthcare spending growth. This dramatic increase is largely attributed to hospitals, particularly those specializing in oncology, which are increasingly purchasing high-priced specialty drugs through the program. As the CBO presentation states, "340B facilities benefit from the program because the difference between the acquisition cost and the amount they are paid (often called the 'spread') is larger for drugs acquired through the 340B program." This suggests that hospitals are capitalizing on the 340B program's discounts to acquire expensive medications, potentially driving up their overall spending. But are these savings being passed on to patients? Evidence suggests otherwise.
This suspicion of hospitals leveraging the 340B program for profit is further reinforced by a UC Berkeley School of Public Health study which found that hospitals are charging insurers exorbitant markups for infused specialty drugs, many of which are likely acquired through 340B. The study reveals that hospitals eligible for 340B discounts charge insurers a staggering 300% more for these drugs than their acquisition costs, effectively pocketing a substantial profit margin. This practice raises serious concerns about whether the 340B program, designed to help vulnerable patients access affordable medications, is instead being exploited by hospitals to boost their bottom line. As Christopher Whaley, a co-author of the UC Berkeley study, aptly points out, "It is ironic that some hospitals earn more from administering drugs than do drug firms for developing and manufacturing those drugs. At least drug firms invest part of their revenues in innovation; hospitals invest nothing." This highlights a perverse incentive structure where hospitals benefit financially from a program intended to help patients, while those same patients are often left facing inflated prices for essential medications and crippling medical debt.
The Affordability Crisis: A Broken Promise for Patients
This concerning trend of rising healthcare costs and shifting burdens is not limited to those reliant on safety-net programs. The Commonwealth Fund's 2023 Health Care Affordability Survey paints a bleak picture of the widespread affordability crisis facing Americans across all insurance types. The survey found that 43% of adults with employer coverage find healthcare difficult to afford, shattering the illusion that employer-sponsored insurance guarantees financial protection. These findings challenge the fundamental assumption that health insurance in the United States equates to affordable access to care. As the survey report states, "While having health insurance is always better than not having it, the survey findings challenge the implicit assumption that health insurance in the United States buys affordable access to care." This sentiment is echoed by millions of Americans who, despite having insurance, are forced to make difficult choices between their health and their financial well-being.
Even the IRA's lauded out-of-pocket (OOP) cap on Part D drug costs, while offering some relief, fails to address the root causes of this affordability crisis. An analysis by Avalere reveals that even with the cap in place, a significant number of Medicare beneficiaries will continue to face high healthcare costs, particularly those with lower incomes or specific health conditions. The analysis projects that 182,000 beneficiaries will spend over 10% of their income on Part D drug costs in 2025, despite the OOP cap. This sobering statistic underscores the limitations of focusing solely on OOP costs without addressing the underlying drivers of high drug prices and healthcare spending. As the Avalere analysis cautions, "High OOP costs are expected to result in many enrollees still facing affordability challenges in 2025." The findings from both the Avalere analysis and the Commonwealth Fund survey highlight a critical gap in the IRA's approach: it fails to adequately protect the most vulnerable patients from the financial burden of healthcare.
A Call for Patient-Centered Solutions
The CMS projections, alongside independent analyses of the pharmaceutical market and patient affordability, paint a clear picture: the current trajectory of US healthcare spending is unsustainable and inequitable. The IRA's price control provisions, while well-intentioned, risk exacerbating the affordability crisis by disrupting existing rebate structures, incentivizing higher launch prices for new drugs, and shifting costs onto patients. This shift is further compounded by unchecked hospital spending, particularly on high-priced specialty medications acquired through the 340B program. The result is a system where hospitals and pharmaceutical companies benefit, while patients—especially those with lower incomes or chronic conditions—are left struggling to afford essential care.
To be sure, the IRA includes provisions aimed at directly helping patients, such as the out-of-pocket cap on Part D drug costs and the expansion of subsidies for marketplace plans. These are positive steps towards easing the financial burden of healthcare for many Americans. However, the law's broader focus on price controls, without sufficient attention to patient protection mechanisms and the potential for unintended consequences, threatens to undermine these gains and create new challenges for those who rely on safety-net programs like 340B and Medicaid.
It's time for a fundamental shift in our approach to healthcare reform. Policymakers must move beyond a narrow focus on price controls and embrace a patient-centered approach that prioritizes affordability, access, and equity. This requires a multi-pronged strategy that includes:
Reassessing the IRA's reliance on price controls: Instead of simply dictating prices, policymakers should explore alternative approaches that strengthen patient protections, preserve rebate structures that support broader access, and address the potential for cost-shifting onto patients.
Tackling hospital pricing practices: Increased transparency and accountability in hospital pricing, particularly for inpatient medications, is necessary to ensure that safety-net programs like 340B are truly benefiting patients and not being exploited for profit.
Investing in alternative care models: Promoting value-based care and investing in primary and preventive care can reduce reliance on expensive hospital stays, improve health outcomes, and make healthcare more affordable for everyone.
The promise of affordable, accessible healthcare for all Americans remains unfulfilled. We must demand a healthcare system that puts patients first, not profits. Only then can we ensure that everyone has the opportunity to live a healthy and fulfilling life, regardless of their income or health status.
Beyond Medicine: Medicaid's Role in Bridging Healthcare and Housing
The evolving landscape of healthcare now acknowledges housing as a crucial element of well-being, marking a significant shift in public health recognizing certain goals advocates have trumpeted for decades - housing can be healthcare. Highlighted by a California Healthline article, this shift challenges old paradigms by recognizing stable, affordable housing as essential for optimal health outcomes. With states like California, Oregon, and New York at the forefront and thanks to a slew of waiver opportunitjes offered from the Biden Administration, some Medicaid programs are increasingly integrating housing services, reflecting a broader understanding that health is inextricably linked to our living conditions.
The Case for Housing as Healthcare: A Closer Look at the Evidence
The role of housing as a fundamental component of healthcare is being increasingly recognized among policymakers and supported by a growing body of evidence that underscores the critical impact of stable living conditions on health outcomes. The American Medical Association (AMA) has highlighted the essential nature of stable housing, pointing out that its absence significantly elevates the risk of various health issues, including severe infections that may necessitate amputation, and an increased likelihood of experiencing violent trauma.
Research featured in Health Affairs strengthens this viewpoint by establishing a clear link between housing stability and better health outcomes, emphasizing housing's non-negotiable position within a comprehensive healthcare framework. The benefits of stable housing can extend beyond physical health, with some studies showing significant mental health improvements through housing stability interventions, such as rental and foreclosure assistance.
The AMA further notes that people with access to stable housing are less prone to the stressors that lead to physical and mental health issues. Such environments reduce the risk of infectious diseases by providing a clean and secure living space conducive to health, facilitating easier access to medical care. Moreover, stable housing is linked to better chronic condition management, as it encourages an environment in which people can adhere to treatment plans and maintain regular contact with healthcare providers and is often accompanied with other medication necessities, such as food security and potable water.
Cost Savings and Healthcare Efficiency Through Housing
Integrating housing services into healthcare significantly enhances health outcomes and generates notable cost savings. By transitioning towards stable housing, reliance on high-cost healthcare services, such as emergency visits and hospital admissions, markedly decreases. A compelling study in Oregon demonstrated that providing affordable housing to nearly 10,000 individuals with unstable living situations resulted in a 12% reduction in Medicaid expenditures. Furthermore, this initiative increased outpatient primary care utilization by 20% and reduced emergency department visits by 18%, highlighting a shift towards preventive care.
This approach not only improves the health of Medicaid beneficiaries but also leads to more judicious healthcare spending. Allocating resources to housing services supports preventive care and vital services, amplifying the impact of stable housing on individual health and the overall healthcare system. Medicaid's strategic involvement in providing housing may prove a crucial tool for achieving better health outcomes and optimizing healthcare expenditure.
Medicaid Waivers and Housing Initiatives: Navigating New Pathways
The integration of housing services within Medicaid, facilitated by Section 1115 waivers and the innovative In Lieu of Services (ILOS) guidelines, represents a transformative approach to healthcare. These policy mechanisms are enabling states to address housing as a fundamental social determinant of health, acknowledging its critical impact on health outcomes.
Section 1115 Waivers: Expanding Medicaid's Reach
Section 1115 waivers grant states the flexibility to use Medicaid funds in novel ways that can include addressing housing instability, a key factor affecting health. The Kaiser Family Foundation reports on various state initiatives that leverage these waivers to directly tackle the housing needs of Medicaid enrollees. For example, some states have received approval to use Medicaid dollars for supportive housing services, such as helping people find and maintain stable housing. The programs with the best outcomes not o ly provide a method of entry but also work to ensure continuing housing stability. These waivers are instrumental in demonstrating how targeted housing support can lead to better health outcomes and reduced healthcare costs by minimizing the need for emergency care and hospital readmissions.
ILOS: Streamlining Support for Housing Needs
The Centers for Medicare & Medicaid’s (CMS) recent guidance on ILOS marks a significant policy shift, allowing Medicaid programs to offer housing-related services as enhancements to traditional medical interventions. This guidance enables states to provide a range of housing supports, including housing navigation assistance and one-time financial aid for security deposits or first month's rent. Importantly, while ILOS does not cover ongoing housing costs, it addresses critical barriers to stable housing for Medicaid enrollees, emphasizing the role of housing stability in achieving health equity.
State-Led Innovations in Housing and Health
States are at the forefront of integrating housing solutions within Medicaid, driven by the opportunities presented by Section 1115 waivers and ILOS guidelines. Shelterforce highlights innovative state programs that are setting precedents for how Medicaid can be utilized to support housing needs. For instance, initiatives that fund temporary housing for individuals transitioning out of hospital care not only provide immediate shelter but also contribute to better health outcomes and lower the likelihood of readmission. These programs exemplify the potential of Medicaid to address the holistic needs of its enrollees, underscoring the necessity of stable housing for overall health and well-being.
Through the strategic use of Section 1115 waivers and ILOS, Medicaid is evolving to meet the complex health and social needs of its enrollees. By recognizing housing as a critical component of healthcare, these policy innovations are paving the way for more integrated and effective approaches to improving health outcomes and advancing health equity. The success of state-led initiatives in leveraging these tools to address housing instability highlights the significant role of Medicaid in not only providing medical care but also in addressing the broader determinants of health.
Applying a Harm Reduction Perspective to Housing
Harm reduction in housing services adopts a compassionate approach, recognizing the varied challenges and needs of those facing housing instability. It emphasizes meeting people "where they are," providing flexible support without coercion, and respecting each person's autonomy and circumstances. This strategy is crucial for addressing the spectrum of housing stability, which ranges from homelessness to permanent, secure living situations. Each stage has unique health implications, with instability often worsening health conditions and hindering access to consistent healthcare.
Harm reduction aims to alleviate these health impacts by offering immediate, sometimes temporary, support to navigate towards more stable housing. This approach is vital for those with chronic health issues, mental health concerns, or substance use disorders, where a stable home can significantly influence health outcomes and quality of life. By tailoring services to meet personal needs—including healthcare access, mental health support, and substance use treatment—harm reduction in housing can effectively reduce the harms of instability and facilitate a path to stable living conditions.
Navigating Oversight in Medicaid's Housing Initiatives
The expansion of Medicaid to include housing services, aimed at addressing social determinants of health, introduces significant management and oversight challenges. A key concern is the potential for program exploitation, where resources meant for the most vulnerable are diverted or misused. The AIDS Healthcare Foundation (AHF) case, reported by the Los Angeles Times, exemplifies such risks, highlighting the need for stringent oversight to prevent organizations from prioritizing performance over patient care, qualityof life, and more permanent outcomes for program participants.
Ensuring Transparency and Accountability:
To counteract exploitation risks and guarantee the effective delivery of housing services, a strong emphasis on transparency, accountability, and comprehensive oversight is essential. The Center on Budget and Policy Priorities (CBPP) provides strategies for overseeing housing initiatives, stressing the importance of clear objectives, performance metrics, and consistent audits. These measures are vital for tracking service implementation, assessing health outcome impacts, and promoting ethical, efficient fund use.
Developing Robust Oversight Frameworks:
Implementing effective oversight requires layered scrutiny, including internal audits, external reviews, regular site audits, and autonomous, third-party feedback mechanisms for beneficiaries. Building partnerships across Medicaid programs, housing providers, healthcare entities, and community organizations can enrich oversight through varied insights and expertise. Such collaborative oversight efforts are pivotal in identifying and disseminating best practices, learning from experiences, and crafting innovative solutions to the intricate challenges of merging housing with healthcare services.
As Medicaid ventures into housing services, its success in enhancing health outcomes for vulnerable groups hinges on overcoming oversight hurdles. Committing to transparency, accountability, and strong oversight will protect against misuse, optimize resource allocation, and ensure housing's role as an integral part of comprehensive healthcare.
The Path Forward: Enhancing Medicaid's Role in Housing and Health Integration
As Medicaid evolves to more fully recognize housing as a crucial component of healthcare, a strategic and multifaceted approach is essential to ensure the effective integration of housing services. This approach should leverage the insights from recent policy developments and successful state initiatives, focusing on policy adjustments, increased funding, cross-sector collaboration, and robust oversight mechanisms.
Policy Adjustments and Increased Funding: A Foundation for Success
Policy Adjustments: Recent guidance on In Lieu of Services (ILOS) and the innovative use of Section 1115 waivers illustrate the potential for Medicaid to directly address housing instability. States should be encouraged to explore these and other policy tools to expand Medicaid's capacity to fund housing-related services, thereby acknowledging the profound impact of stable housing on health outcomes. Legislative and regulatory frameworks must evolve to support these changes, ensuring Medicaid can effectively contribute to housing stability for its enrollees.
Increased Funding: The expansion of housing initiatives within Medicaid necessitates substantial investment. This includes not only funding for direct housing assistance but also for the development of infrastructure that facilitates the delivery and coordination of services. Advocacy efforts are crucial to secure increased federal and state funding, aiming to bolster Medicaid's ability to meet the housing and health needs of its beneficiaries comprehensively.
Cross-Sector Collaboration: Building Bridges for Better Health
The success of housing initiatives within Medicaid is significantly enhanced by cross-sector collaboration. Partnerships among Medicaid agencies, housing authorities, healthcare providers, and community organizations are vital. These collaborations can draw on the strengths and resources of each sector to address the multifaceted challenges at the nexus of health and housing, creating integrated solutions that improve outcomes for individuals and communities alike.
Implementing Comprehensive Oversight and Adaptive Management
Comprehensive Oversight: To safeguard the integrity of housing initiatives and ensure resources are used effectively, a framework for comprehensive oversight is imperative. This framework should include clear implementation guidelines, success metrics, and regular evaluations to monitor impact and guide continuous improvement.
Adaptive Management: Effective management strategies are critical to navigate the complexities of integrating housing services within Medicaid. This includes ongoing training for program administrators and service providers, as well as the development of care models that seamlessly coordinate healthcare and housing services, ensuring that Medicaid enrollees receive the support they need to achieve and maintain stable housing.
The path forward for Medicaid's integration of housing services presents a unique opportunity to significantly improve health outcomes and advance health equity. By adopting a strategic approach that includes policy innovation, increased funding, cross-sector collaboration, and rigorous oversight, Medicaid can play a pivotal role in addressing the housing needs of its enrollees. This comprehensive strategy not only meets immediate housing challenges but also lays the groundwork for a healthier, more equitable future.
A Call to Action for Housing as Healthcare
The journey towards integrating housing into healthcare through Medicaid is not just a policy shift; it's a moral imperative. As we've seen, stable housing is not merely a foundation for individual well-being; it's a cornerstone of public health. The evidence is clear: when people have access to safe, stable housing, their health improves, healthcare costs go down, and communities thrive.
Emergency Alert: Substance Use Safety Net in Trouble
In April, the Biden Administration released a Statement of Drug Policy Priorities, outlining areas of improvement and policy priorities necessary to address the nation’s opioid epidemic. The statement was followed up in May by the Substance Abuse and Mental Health Services Administration (SAMHSA) announcing $3 billion in block grants to be distributed to states as emergency funding related to the American Rescue Plan Act, passed in March. The press release from SAMHSA highlighted preliminary data from the Centers of Disease Control and prevention (CDC) showing an estimated 90,000 overdose deaths in 2020, a 20,000 overdose death increase from 2019. Belying the nature of “emergency”, the SAMHSA announcement came 2 months after President Biden signed the American Rescue Plan Act, the release did not include a timeline for these block grants to be received by states or any indication from SAMHSA that guidance attached to use of these funds would be forth coming. That’s a problem for substance use treatment service providers who have been struggling to keep their doors open and services flowing throughout the COVID-19 public health emergency.
According to Michael Pickering, executive director for Regional Addiction Prevention, Inc. (a residential treatment program in Washington, D.C.), residential programs had to cut the available number of patients who could be housed at any given time, in order to help slow the spread of COVID-19 and reduce risks of clients and staff contracting the virus while restrictions were in place. That meant revenue necessary to operate shrunk dramatically. However, in order to maintain a minimum number of services, not many staff were reduced. Ultimately, these combined factors underscored a long-term issue as the agency faces potential closure: private and public payer rates for are so low that even the slightest emergency could be catastrophic for many substance use service providers.
Indeed, the Centers for Medicare and Medicaid Services (CMS) last adjusted addiction treatment services reimbursement rates for inflation in 2016 – meaning the “basement” for reimbursement hasn’t increased in 6 years while the rest of costs associated with providing care have grown. According to one entity, CODAC Behavioral Healthcare, reported reimbursement losses of nearly 40% from Medicaid on a 45-minute treatment session. The same report cited the American Society of Addiction Medicine (ASAM) as stating Medicaid as the largest payer of medication assisted treatment (MAT) for opioid use disorder, accounting for anywhere between 35 and 50% of services provided in the hardest hit states.
Tucked among Biden administration priorities in drug policy is a familiar statement regarding racial equity in health care. At the intersection of disparities in access to care and lack of health equity along racial lines is Medicaid’s low reimbursement rate. A study, included in the Statement, specifically highlighted how few private providers accept Medicaid for substance use treatment, opting instead for “cash-pay only” policies, resulting in a concentration of services provided to white people and leaving an unmet need among people of color, who have also been disproportionately impacted by the COVID-19 pandemic.
While the Biden administration also cited a need to recruit and retain medical providers and staffing talent to stigma, low reimbursement rates also translate to low compensation relative to other areas of health care and substance use services require more time to functionally provide for the needs of a client than other areas of health care. This leaves clinics and providers serving the public with an exceedingly high turn-over rate; CODAC cited a near 50% turnover rate for 2019. Just as with federally qualified health centers, compensation rates tied to clinic revenue (reimbursement rates) and grant awards that aren’t meaningfully increased, can’t compete in terms of compensation – the private sector, focused on profit margins and serving well-to-do clients, can readily recruit skilled talent from public service entities with more attractive compensation packages.
The administration’s priorities in drug policy are lofty and admirable, with a comprehensive map on moving forward. However, getting these resources – especially emergency funding - to entities providing critically necessary services seems to be a major barrier the administration doesn’t seem to have a good plan to deal with. Just as with the emergency rental assistance monies allocated under the American Rescue Plan, emergency monies are slow to reach substance use service providers in dire need, risking destabilizing an already weak safety net. Regional Addiction Prevention, Inc. provides just one example of an entire industry at risk, where funds are bottlenecked at the local agency distribution level. Earlier this month, advocacy organizations from around the country and service providers in D.C. wrote to the Mayor and City Council urging an expedited process to ensure emergency funds for these services were distributed in a more timely fashion.
The Biden administration can set all the goals in the world and even secure funds from Congress, but these goals won’t be met on a one-time funding or periodic “emergency” funding basis. The administration needs to provide funding distribution guidance commiserate with the urgency of keeping public addiction service providers afloat, ensure the country’s annual budget reflects these priorities, and increase Medicaid reimbursement rates to reflect these policy priorities.
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.