The HELP Copays Act will increase healthcare costs, premiums and deductibles

Representatives Earl L. “Buddy” Carter (R-GA), Mariannette Miller-Meeks (R-IA), Nanette Barragán (D-CA) and Diana DeGette (D-CO) have reintroduced the Help Ensure Lower Patient (HELP) Copays Act that will require insurance companies to apply copay cards that a patient may use to pay for their medicines towards their deductible. While the intention of this legislation is to remove financial barriers that could be keeping people from picking up their prescriptions, the reality could be higher premiums and deductibles as a result of higher healthcare costs.

Insurance companies use copays to incentivize the use of “preferred” therapies on their formularies. If a medicine is preferred, then it generally has a lower copay than medicines that are not preferred. However, problems arise at the pharmacy counter because patients don’t typically check their insurance company formularies on their ride between the doctor’s office and the pharmacy.

In an attempt to address the sticker shock that patients face at the pharmacy counter when their prescribed medicine isn’t a “preferred” therapy and has a high copay, manufacturers have started providing copay cards to cover the copay associated with specific medicines. When someone presents a copay card, the manufacturer pays the copay.

Insurance companies have started pushing back on this practice and are adding policies that do not allow copay cards to count towards an individual’s deductible. Once a patient has exhausted the financial assistance with the copay cards, they are again faced with high copays.

Representative Barragán believes the bill will improve access to medicines. “Patients shouldn’t face complicated financial barriers to access lifesaving prescription drugs….so many families depend on copay assistance programs to offset soaring drug prices….We must do what we can to lower their out-of-pocket costs” said Representative Barragán.

Representative Miller-Meeks believes the bill will lower drug prices. “Lowering drug costs has remained one of my top priorities throughout my time in Congress….Our bill will protect patients and ensure their copays are going toward the cost of their medications” said Representative Miller-Meeks.

However, what Representatives Carter, Miller-Meeks, Barragán and DeGette should realize is that if insurance companies are required to apply copay cards to deductibles, healthcare costs, premiums and deductibles will increase because copay cards increase utilization of non-preferred medicines and remove the incentive to negotiate drug prices to be a “preferred” medicine.

Of the copay cards available, 88% are for medicines that have a generic equivalent, a generic close therapeutic substitute or a branded closed therapeutic substitute. Only 12% of coupons are for medicines with no substitute or alternative therapy available.

When there are similar medicines available, insurance companies use price to create tiered formularies. For example, If two medicines are available to treat the same condition but one medicine has a $5 copay and the other has a $50 copay, it’s usually because of a difference in price. So when a patient decides to purchase the medicine with a $50 copay instead of a $5 copay, the insurance company also receives a higher bill and it creates a snowball effect that increases total healthcare costs.

Additionally, The National Bureau of Economic Research has estimated that copay cards could raise negotiated prices by 8% and increase total healthcare spending by $1 billion annually because it removes the incentive for manufacturers to negotiate lower prices to be considered a “preferred” therapy.

Instead of focusing on how copay cards can be used to alleviate financial barriers, the focus should be on eliminating financial barriers. Financial barriers would be a thing of the past if there were no copays for generics, “preferred” therapies, or for medicines that have no substitute or alternative therapy available. This approach would discourage the use of non-preferred medicines, lower healthcare costs and eradicate the heartache associated with the pharmacy counter.