On Your Side: Why insurance companies benefit from 'Copay Accumulators' in California
16 states have banned a health insurance practice called 'Copay Accumulators,' but it is legal in California and can cost the chronically ill thousands every year.
The regulation was adopted during the Trump Administration and it made copay accumulators legal unless a state bans the practice. Now, a new bill that was just introduced in Sacramento could do just that.
Alyssa Dykstra was diagnosed with juvenile arthritis as a toddler. The auto immune disorder causes painful, inflamed joints and fatigue and her daily medication costs upwards of $11,000 a month.
"I am very thankful that I do have insurance that makes this more reasonable," said Alyssa Dykstra, chronically ill patient.
She is responsible for closer to $3,000 for a 28-day supply, which is still beyond the price most Americans can afford.
That's why drug companies have assistance programs for the chronically ill.
Alyssa Dykstra said, "because they have contracted rates that they will get money from the insurance policy they say 'don't worry about your share,' we will take what the company is giving us and were going to give you this coupon to subsidize your out of pocket share."
But in California, insurance companies are allowed something called a 'Copay Accumulator.' Critics say it's a way for insurance companies to make even more money off the priciest of prescription drugs.
"The way they did that is they said to the consumer is that you can't use the copay assistance card to meet your annual deductible," Jerry Flanagan, Consumer Watchdog.
The chronically ill typically have high deductible plans-that can be upwards of $10,000. For Alyssa, her deductible is $3,000, money she wouldn't have to shell out each year without a copay accumulator. and due to her illness- money is tight. she's on disability, as many chronically ill are.
"Who's benefitting? Only the insurance companies because if the consumer is paying more and if the drug company is helping out than the insurance company's costs goes down and their profits go up," said Jerry Flanagan, Consumer Watchdog.
"We are trying so hard and there are these systems set up to exploit our illnesses," Alyssa Dykstra.
A Trade Association for Insurers in California, ACLHIC, says the real issue is the sky-high drug prices set by the manufacturers and that the copay coupons only fuel the "out of control" pricing.
They deny any claims of double dipping because they said the price of the coupon goes to the pharmacy, not the insurance company.
