Health care prices are on the rise across the board, and some patients have seen their out-of-pocket costs go up by thousands, thanks to a complicated insurance tactic called a copay accumulator. It’s a way for insurance companies to counter high drug prices, but patient advocacy groups are working to ban these tactics. 

And some state and federal legislators agree that copay accumulators should go away.

But understanding why copay accumulators are a target takes some back story. If understanding a deductible is college-level health care-speak, understanding copay accumulators is Ph.D. level. 

“This is an arms race between drug manufacturers and plans, and they keep trying to one up each other in this fight,” said Stacie Dusetzina, a professor at Vanderbilt University School of Medicine. “It’s almost like watching divorced parents fight.” 

The people caught in the middle are patients. Many end up surprised by copays, sometimes owing thousands of dollars. Why? Let’s start with high drug costs.

Take Humira, a common medication for autoimmune disorders like Crohn’s disease. Sticker price: $7,000 per month. But most patients don’t pay that, thanks to help from the drug companies. 

“If you are watching a television commercial for a drug and it says you can get this drug for as low as $10, that’s through a copay assistance program,” Dusetzina said. 

But drugmakers aren’t just trying to be nice — copay assistance is good business for them. “This is a really smart way for a company to get you to use their branded drug instead of a competitor’s drug,” Dusetzina added.

How do they work? Patients get a special debit card to pay their drug copays — but also their deductible.

The idea is that after they hit their deductible with drug company money, their insurance will start picking up the tab. For some drugs, that might be hundreds of thousands of dollars a year. 

And then? “The insurer is ultimately going to foot the difference,” said Leemore Dafny, an economics professor at Harvard Business School and Harvard Kennedy School.

But these assistance programs can have side effects. Dafny researched drug prices and found copay assistance leads to higher prices for multiple sclerosis drugs by about 8 percentage points.

Which is why health insurers started pushing back. Insurers have been asking for legislators to help with lowering drug prices for years. But in the meantime, they came up with a countermove: copay accumulators. That’s when insurance stops counting drug company financial assistance toward a patient’s deductible.

That’s what happened to Gerica Coad in Granite Bay, California. Her 17-year-old daughter, Macy, has been taking Humira since she was 14 months old to treat severe juvenile arthritis. The drug had always cost $5 a month, thanks to copay assistance. 

But in the fall of 2021, that changed. When Coad called in her monthly refill, “they told me that my coinsurance was somewhere around $1,600, which threw me for a big loop,” she said.

It turned out her UnitedHealthcare plan had a new copay accumulator policy.  The insurance drained tens of thousands from the Humira debit card until it was exhausted, and then came back to Coad for her deductible.

She suddenly owed $1,600 instead of the $5 she was used to. Coad said, “It felt like the rug was pulled out from under me.”

Coad ended up scraping together the $1,600 copay so her daughter didn’t miss a dose and set back her recovery. But she’s worried about her budget going forward. “My fear is I won’t be able to afford my daughter’s medication.” 

In years past, copay accumulators were the exception. Now, they’re the norm. By 2020, 83% of people with commercial health insurance had copay accumulators.

And patients like Macy Coad are the rope in a game of tug of war between insurers and the makers of meds.

Gerica Coad said the copay accumulator “felt like it was on the back of patients, on the back of my daughter, who really needs her medication.”