A copay accumulator or accumulator program is a utilization management tool used by insurers and Pharmacy Benefit Managers (PBMs) to stop manufacturer copay coupons from counting towards the deductible and the maximum out-of-pocket spending for a patient.
The Centers for Medicare and Medicaid Services in both 2020 and 2021 issued a final rule in the Notice of Benefit and Payment Parameters that allows health plans to use copay adjustment programs and defers to state law on their regulation.1
As of fall 2021, laws in 12 states (IL, KY, NC, WV, VA, AR, TN, GA, LA, OK, AZ, and CT) and Puerto Rico require any payment or discount made by or on behalf of the patient be applied to a consumer’s annual out-of-pocket cost-sharing requirement.1
Insurance companies see copay accumulator programs as a method to curb prescription spending by encouraging patients to elect cheaper medication; however, patients with rare, complex, or chronic diseases often need high-cost specialty drugs and in some cases, cheaper alternatives are not available.2 Insurers may also use copay accumulator programs as a tool for negotiating lower drug prices with pharmaceutical companies.3
Health insurance helps patients pay for medical expenses i.e. medications. When they fill a prescription, a claim is filed to their insurance company. The insurer or PBM verifies the claim and determines the cost of the prescription. The patient and insurer then share the cost based on a specific payment schedule detailed in a plan’s benefits. Most payment schedules include a deductible and coinsurance or copayment. A deductible is the amount a patient must pay before the insurer will cover services. If they have a plan with coinsurance , once the deductible is met, the coinsurance period starts. In this period, costs between the insurer and patient are split based on a fixed percentage. For example, an 80:20 coinsurance means the patient needs to pay 20 percent of the cost, after the deductible is met, and the insurer covers the remaining 80 percent. Some insurance plans, i.e. HMOs, have a copayment instead. A copay is a fixed amount for a covered health care service, with the insurance company covering the full service after a patient has reached their deductible. For example, there may be a $20 copayment for primary care visit or a $10 copay for prescriptions. The out-of-pocket (OOP) maximum is the total maximum amount a patient will pay during any given plan year. The OOP maximum includes the deductible, and coinsurance or copayments. After reaching the OOP maximum, an insurer pays 100% of the medical costs.3
Copay accumulators change the way an insurance company applies and accounts for payments from a drug manufacturer’s copay card. Consider a patient is enrolled in an insurance plan with an annual $1,700 deductible and has a $750 copay coupon; if no copay adjustment were applied the patient is responsible only for the remaining $950 before reaching the deductible. Whereas, with a copay adjustment the $750 coupon will not count toward the patient’s deductible and the patient still has to pay the full $1,700 before satisfying the annual deductible.
As of March 2021, in 32 states, at least two-thirds of plans include a copay accumulator adjustment policy.2
The 2021 Large Employers’ Health Care Strategy and Plan Design Survey, a survey of 122 large employers that cover more than 9 million people, found that 49% of employers said they either had a copay accumulator program in place in 2020 or would add one in 2021, and another 14% planned one for 2022-2023.4
Copayment Adjustment Programs. Ncsl.org. https://www.ncsl.org/research/health/copayment-adjustment-programs.aspx. Published 2021.
Hengst S. Double-Dipping: Insurance Companies Profit At Patients' Expense. Washington, DC: The AIDS Institute; 2021. https://aidsinstitute.net/documents/2021_TAI_Double-Dipping_Final-031621.pdf.
Copay Accumulator Programs: What They Are And How They Might Impact Your Out-Of-Pocket Costs. Spondylitis Plus. https://spondylitis.org/spondylitis-plus/copay-accumulator-programs-what-they-are-and-how-they-might-impact-your-out-of-pocket-costs/.
Business Group on Health. 2021 Large Employers’ Health Care Strategy and Plan Design Survey. August 2020. Available at: https://www.businessgrouphealth.org/resources/2021-large-employers-health-care-strategy-and-plan-design-survey