Health insurers find new way to drain the bank accounts of Americans with chronic conditions

Low-income patients are hit the hardest.

Finkelstein is a self-employed Philadelphia-based videographer who has also worked as a reporter for Bloomberg News and other outlets.

Twenty years ago, Bob Finkelstein was having some double-vision, and his doctor recommended a CAT scan. In a short time, Bob was diagnosed with multiple sclerosis. 

He was quickly put on a medication that required injections every other day. His doctor eventually switched him to Copaxone, a drug requiring fewer weekly injections that he has been taking for the last 15 years. 

Luckily, even though he was not employed at the time, Finkelstein, had six months of health insurance left on a COBRA policy from a previous employer. And because of a bill Congress passed shortly before his diagnosis, insurers could not refuse to sell him a policy because of a “pre-existing condition” as his symptoms had begun while he still had coverage. 

It was common at the time, however, for insurance policies to have lifetime maximum caps, meaning insurers would not pay for treatments or medications for his MS beyond that dollar limit. But Finkelstein had figured out that he could switch to another health plan and his lifetime cap would be reset. Under the new plan, though, as the price of Copaxone increased, so did his copays.

“When I first started it, the list price was $600 a month,” he said. “It’s now $8,000 a month.”

The price hikes were so frequent over the years that Teva, the maker of the drug, was the target of a Congressional investigation in 2020.

Fortunately, for Finkelstein and millions of other Americans with expensive-to-treat chronic conditions, the Affordable Care Act of 2010 abolished the lifetime caps and established annual out-of-pocket limits, though the maximum limit increases every year. (For 2023, it’s $9,100 for an individual and $18,200 for a family.)

“This was the first time annual out-of-pocket expenditures had been capped,” Finkelstein said. “It guaranteed the limit would be set at a certain amount each year.”

But now, many insurers are implementing changes in their prescription drug payment policies that are putting patients with chronic conditions on the hook for thousands more out-of-pocket expenses every month.

A few years ago, drug manufacturers began subsidizing the costs of expensive drugs until patients hit their out-of-pocket cap, lowering their copays. This is usually done via a manufacturer's coupon patients can present at their pharmacy. Insurance companies initially counted these coupons toward a patient’s out-of-pocket expenditures. 

But now, many insurers are instituting what are known as copay accumulators.

Copay accumulators work like this: If your out-of-pocket maximum is $5,000 and you receive a manufacturer copayment coupon for $1,000, the $1,000 will not count toward your out-of-pocket maximum. Essentially, the insurance company is double-dipping; they do not have to pay for the portion saved by the coupon, but they still collect the extra $1,000 from your out-of-pocket maximum. 

In Finkelstein's case, his monthly premium with Independence Blue Cross is $775, and his out-of-pocket maximum is the highest allowed by law, $9,100 per year, a limit he previously reached in August. But now that some of the subsidies he had been getting–which had counted against his out-of-pocket requirement–are no longer available, he is still spending his own money for his medication. As of now, the list price of Copaxone is $7,500 per month. Having maxed out the manufacturer coupon for the year, Finkelstein pays a $1,000 monthly copay. With Blue Cross’ impending implementation of a copay accumulator program, he will pay an additional $5,000 per year for his medication. 

“The added $5,000 a year is definitely factoring into my thoughts about what medication I should take,” he said. “I would prefer to continue taking Copaxone because I've been on it mostly successfully for 15-plus years, and the side effect profile is pretty minimal.” It’s a conundrum facing many who could be forced to search for less expensive but potentially less appropriate drugs.

Legislative Fixes

Monica Bryant, the co-founder and CEO of Triage Cancer, an organization that provides cancer patients with free legal and practical advice and a member of the Lower Out-of-Pockets NOW Coalition, says those impacted the most are low-income patients who are in high-deductible plans. 

“When you look at who's able to access the copay assistance from the manufacturers, most have low incomes,” Bryant said. “So it's really important for us to have a conversation around who this is actually impacting. And it’s people who are already in a very challenging situation.”

Triage Cancer has developed a chart explaining copay accumulator laws by state. Right now, 16 states have laws that address copay accumulators, and the differing rules can cause confusion for patients. 

Finkelstein lives in Philadelphia, and Pennsylvania does not have a law concerning copay accumulators, but that could change. 

Pennsylvania state Sen. Maria Collett, a Montgomery County Democrat, is the co-sponsor of a bill that would require insurance companies to count any payment made by a patient or on behalf of a patient when deductibles and out-of-pocket expenses are calculated. 

“So, for example, when an insurer or a pharmacy benefit manager sees that payment card, sometimes if you're prescribed something that's maybe not on your formulary, your doctor can give you a prescription card that says you'll pay no more than $25 out of pocket for this,” Collett said. “And those discounts need to be paid on behalf of the enrollee.”

As a lawyer and later as a nurse, Collet had her own experiences dealing with insurance companies. She said in addition to providing direct bedside patient care, “later in my career I worked for an insurance company, helping to teach nurses how to administer Medicaid programs across the country. So I've had the opportunity to see both sides of it and really to see what happens when we have people who are able to get the care and treatment and specifically the medications they need, versus people who aren't – simply because of costs.” 

And Collet’s family has counted on a pharmaceutical company’s program of helping with drug costs, saving them thousands of dollars a year. 

“My husband was diagnosed with chronic myelocytic leukemia in 2014,” Collett said. “He takes chemotherapeutic agents every day and will for the rest of his life. And that comes at a cost of about $13,000 a month.”

Collett said the legislation she is co-sponsoring has bipartisan support in the Pennsylvania Senate, and she expects it to pass.

At the federal level, the HELP Copays Act, a bill that would prohibit the use of copay accumulators nationally, was introduced this year and also has broad bipartisan support. “Only health plans and PBMs (pharmacy benefit managers) could take a program designed to reduce patients' out-of-pocket prescription drug costs and turn it into a money-making machine,” said Rep. Buddy Carter (R-Georgia), the lead sponsor, of the bill which currently has 75 cosponsors.

For people like Bob Finkelstein, those bills can’t be enacted soon enough. 

“I think you’re a failure as a CEO if you’re trying to boost your company’s profits by double-charging chronically and terminally ill people,” Finkelstein said. “They’re trying to boost their profits on the backs of people who really deserve a break.”