Supporting the Chronically Ill by Capping Copays

Study shows prescription copay caps can be enforced with little effect on premiums.

Capping out-of-pocket prescription costs to protect the chronically ill from discriminatory cost-sharing practices would have little effect on total costs for the average American, according to a new study.

Monthly caps of $100, $150 or $200 would increase premiums by less than 0.5 percent for most insurance plans in the analysis. And the increased premiums would be almost completely offset by savings in copays and other cost-sharing practices.

For instance, a $100 monthly per-prescription cap would increase annual premiums for the average 40-year old American with a silver plan (the most popular category on the marketplace) by $19, but reduce cost-sharing by $18, leaving an increase of just $1 per year.

What a Monthly Rx Cap Means for an Average 40-year-old with a Silver Plan

That dollar would have a significant impact on the lives of thousands of patients who need long-term specialty medications, for which many plans currently charge exorbitant copays. A $100 monthly cap, for example, means $550 in annual savings for blood cancer patients enrolled in silver plans, $234 for cancer patients, $2,160 for HIV patients and $869 for those with rheumatoid arthritis.

How Much the Chronically Ill with Silver Plans Can Save with a $100 Monthly Per-Prescription Cap

Higher premium increases were predicted by a few scenarios in the study — those involving the less popular bronze plans or those that capped total annual prescription costs at $1,250. The authors suggest that these more significant increases could be offset by additional benefit changes, such as increasing doctor visit copays, deductibles or out-of-pocket maximums.

Although the ACA provides flexibility for such benefit changes, insurers today don’t cap out-of-pocket costs for prescriptions because they would then preferentially attract the people most likely to use expensive specialty medications.

If the caps for prescription medications are going to happen, it would have to be done through legislation

Instead, insurers actively discourage sick patients from selecting their plans through high cost-sharing methods for medications used to treat serious and chronic diseases. That way, they can offer lower premiums that make them more competitive. But this practice puts many vulnerable people—the elderly and the chronically ill—at risk of not getting the necessary quality care.

To ensure health care remains affordable for all Americans, not just the healthy, all patients need access to crucial therapies. And for that to be realized, state and federal policymakers need to take action to protect the chronically ill from the unintended consequences of the ACA. “If the caps for prescription medications are going to happen, it would have to be done through legislation,” study author Bruce Pyenson, a principal and consulting actuary at Milliman, said. “Individual insurers are not going to do this on their own.”