Virginia has become the first state to ensure that patients will be the ones to see benefit from prescription drug coupons — not their insurance companies.
Last month, Virginia Governor Ralph Northam signed two bills that will require health insurers to count drug and medicine coupons toward a patient’s deductible.
This bill, which will take effect July 1, was introduced to help protect patients from the rising costs of prescriptions. It was introduced to prevent insurance companies from profiting from drug coupons and copay assistance, while the patients using the coupons get nothing.
The legislation was carried by Republicans Sen. Siobhan Dunnavant of Henrico, and Del. Timothy Hugo of Fairfax.
“I introduced SB 1596 [HB 2515] because I had so many patients that came to me and complained,” stated Dunnavant. “When they went to to the pharmacy to fill a prescription, they either had to pay a really high copayment that applied to their deductible or, if they used a coupon and got it for a less expensive price, they could not apply that [coupon] to their deductible. That just didn’t seem fair to me.”
This frustrating situation was coming to pass because of choices employers and health insurers had made in order to maximize their profits, and pass rising drug costs on to patients, rather than bearing it themselves.
“[Patients] were paying the cost of their prescription,” stated Dunnavant. “They had the opportunity to get a lower-cost alternative, and they were disincentivized by their insurance plan to go with the lower-cost alternative.”
Drug manufacturers often provide copay assistance — coupons or discounts — directly to patients who’ve been prescribed the drug, in order to help save patients money. In this way, manufacturers help cover the patient’s out-of-pocket costs for a specialty or brand-name medicine and, by doing so, continue to get the patient’s business. Patients often use copay assistance to help cover the cost of drugs for a variety of illnesses and conditions. This includes conditions that are incurable, or take years to treat.
Typically, insurance companies will apply the manufacturer’s coupon towards the patient’s annual deductible. While this action does not reduce the patient’s cost for that prescription, it does allow patients to reach their deductible faster and at a cheaper cost than if they paid directly out-of-pocket. Once their deductible or yearly maximum is reached, the patient’s insurance then pays for the additional prescriptions.
However, 2018 saw the introduction of a new program, first introduced by UnitedHealthcare. In this new program, employers, plan sponsors, or patients can purchase an insurance policy that utilizes what are called “copay accumulators.” These programs prevent coupons or copay assistance from counting towards a patient’s deductible or out-of-pocket maximum, allowing insurance companies to avoid the full cost of the drug, passing as much of it as possible along to the patient.
Critics argue that this new program may cost patients thousands of dollars a year. However, insurers claim that the new program is necessary to keeping drug manufacturers from jacking up their prices.
The problem is that, since drug manufacturers are raising the prices on specialty drugs, patients are increasingly relying on coupons and copay assistance to afford their medication. Regardless of the intention, the reality is that copay accumulators are reducing the affordability of essential medicines. While out-of-pocket costs are rising for patients, both manufacturers and insurers are profiting.
Not only can higher prescription costs can be financially damaging, some medications do not have a generic equivalent. Therefore, thanks to the increasing costs of medicines coupled with the decreased affordability that comes with copay accumulators, patients who require specialty drugs may be forced to stop filling their prescriptions.
Virginia legislators have now taken steps to protect patients from copay accumulators. Governor Northam signing this bill into law makes Virginia the first state to do so, although West Virginia passed a similar bill around the same time, and eight other states are reportedly considering similar legislation.
“Healthcare costs are already exorbitant for almost every Virginian,” stated Del. Hugo in a press release. “This is a meaningful step to lower out-of-pocket costs for hardworking Virginians.”
Additional reporting by Marilyn Drew Necci. Photo by Joshua Coleman on Unsplash
