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Lillian Karabaic teaches personal finance to millennials through a podcast and community called Oh My Dollar! — and she needs an expensive drug to treat a chronic condition. That makes her an expert on one of the most complex arrangements in the American health care system: the copay accumulator.
In short, it’s an invention by the insurance industry to make sure only your money counts toward your yearly deductible — not any assistance you might receive from a drug company.
Drug companies offer copay assistance to patients whose plans make them pay a percentage of a medicine’s price so that they charge insurers more. For instance, if a drug’s monthly cost is $10,000, few people with a 20% copay could afford $2,000 a month. But if the drug company helps you with that $2,000 — sometimes they call it a “coupon” — it can charge your insurer $8,000 a month. Copay accumulators say these coupons can’t count toward an insurance plan’s out-of-pocket maximum.
It’s confusing, but Karabaic was well aware of how it works. Still, she recently got socked with an unexpected $3,000 charge — and expects to lose her very organized fight against it.
Finding out whether an insurance plan includes one of these policies can be extremely tough. Researchers from the AIDS Institute looked at hundreds of plans across the country and developed a tip sheet to help guide searches. A dozen states have banned copay accumulators, and more are considering doing so.
For tips on how to avoid overpaying for drugs — when that’s possible — check out the latest edition of our First Aid Kit newsletter.
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