Thoughts on Co-pay Assistance

[TheMiddleWay]

In a thread on healthcare exchanges rdmc questioned why someone can get Tecfidera for $10 per month. Here’s why I think DMD manufacturers are so happy to offer us co-pay assistance. These figures are a semi-hypothetical example, so obviously not exact. I don’t work for a pharmacy, drug mfg, or ins. company, so this is my best guess of how this works out. If anyone else has insight, it’d be appreciated.

Wanda’s* co-pay for her DMD is 20% capped at $250 per month. She is covered under a $2,500 high deductible plan. This was her first year under an HSA plan, and there wasn’t any warning about the switch, so she didn’t have a chance to save any money. She was trying to decide if she should buy groceries and pay rent, or stay on her DMD because the first month was going to cost $2,750. If Wanda decided to eat and have a roof instead of staying on her DMD the mfg makes $0 per year from her.

If the mfg reaches out and offers co-pay assistance then here’s how that math might work out.

The pharmacy charges $4,500 per month for the DMD. The first month the mfg pays $2,710 in co-pay assistance, the ins. company pays $1,750, and Wanda pays $40. For each of the next 11 months the mfg pays $210, the ins. company pays $4,250, and Wanda pays $40.

The breakdown for the year is mfg pays $5,020, ins. co. pays $48,500, and Wanda pays $480. A lot of that $48,500 is coming back into the mfg’s pockets. In the end, they get a pretty great return on their co-pay assistance investment. It’s entirely possible that the mfgs offer co-pay assistance for reasons other than their warm tender hearts.

Wanda also stays on the DMD for several years because it's working and she’s getting a pretty great deal, too. Instead of paying her $2,500 deductible incrementally over the year, her DMD mfg pays almost all of it for her in the first month, and she only has to pay $480 for the year for almost all her medical care. In the end the insurance company is still getting all of their co-pays.

As to why this doesn’t apply to some government healthcare plans- I can only guess that they opted out of this ridiculous game.

*hypothetical patient with awesome employer

[football-mom]

I think you have it exactly right. It would make no business sense for big pharma to give up payments of $50k per year when they can kick in $4k and still make obscene profits. It's nice to have the help, but they are still making huge bank by helping.

[kingseth2]

let's cut to the chase

100% of Maryland's new health exchange plans do not offer $50 co-pay, but the ridiculous 40% co-insurance for DMDs.

For a moment, forget who is paying the insurance company. Every single MS DMD patient is going to automatically be at the out of pocket max.

I take Gilenya. Novartis will kick in up to $12K for coinsurance assistance. That is cash out of their bank account, going to the insurance company.

Here's the rub - why don't they just pay me $6,350 directly, so that I can in-turn pay my insurance company the out of pocket max? Novartis saves about $6K, and I'm off the hook, with only having to pay my monthly premiums.

Are insurance companies going to accept that arrangement? Of course not. They will be double dipping off:

a) Novartis' $12K +
b) my personal $6,350 after that
or
c) some 3rd party non-for-profit agency, that I MAY get to help, after Novartis' assistance completes*

*Talking w/ Novartis the other day, there is no guarantee that this 3rd party will step in to help, prior to you actually needing the cash. i.e. it cannot be vetted, prior to your open enrollment decision.

I hope I am wrong about this. Am I? If I'm not, where is the NMSS lobbying efforts to address this reality and help?

Please, someone, get me off this soapbox!

[TheMiddleWay]

I obviously can’t speak to your exact circumstance, but in my experience I pay co-insurance to the pharmacy, not the insurer. The co-insurance reduces the amount the insurance company has to pay to the pharmacy- until I reach my max out-of-pocket (MOP). Then the insurer picks up the full tab.

If it were me with no assistance, here’s how it would work out. If the pharmacy bills $4,500 per month then with a 60/40 split, and the insurance company pays the pharmacy $2,700 (60%) and I would pay the pharmacy $1,800 (40%).

I have no idea what the Novartis assistance program makes you pay, but let’s say they require you to pay $100 per month of your co-insurance before they will help.

Now with assistance from Novartis: the pharmacy bills $4,500, the insurance pays $2,700 (60%), I pay $100, and Novartis assistance pays $1,700 (combined 40%). Everyone is paying the pharmacy. As far as the insurance company knows, I paid the full $1,800. After month 3 the pharmacy bill has been $13,500, insurance has paid $8,100, I paid $300, and Novartis assistance paid $5,100. Novartis and I have paid $5,400 total combined, so if my MOP is $6,350 there is only $950 left until the insurance company starts to pay the full bill.

That means on month 4: the pharmacy bills $4,500, I pay $100, Novartis assistance pays $850, and the insurer pays $3,550 ($2,700 + the $850 above MOP). Months 5-12: Pharmacy bills $4,500 and insurance company pays the full $4,500 because the MOP has been reached.

The total for the year works out like this: I pay $400, Novartis assistance pays $5,950, and insurance pays $47,650. Having mfg assistance doesn’t change my MOP. It means that instead of paying the MOP on my own, they help me pay it.

I really hope that is how the Novartis program works, and maybe someone already getting help from them can comment.

[its2much]

Network v Out of Network

Just wondering if insurance companies have a relationship with network pharmacies similar to what they have with network hospitals and doctors. In those cases, they don't pay the full amount billed; they pay a lesser amount to the provider than is billed.

[TheMiddleWay]

Back when I was switching to a high deductible plan, I tried to get an answer from my pharmacy about whether or not the insurance company actually pays the full amount billed, since I would be paying the full amount the first month. As with most medical billing, I got the run around. The most they would say is that the insurance company might get a small discount. Mercifully because of co-pay assistance I never had to find out what the actual billed vs. allowable amount was. We all know that either way it would have been thousands of dollars.

It’s interesting to me that I get EOBs for doctor, hospital, labs, etc. but when it comes to drugs, we don’t get the breakdown showing what was written off by the provider (in this case pharmacy) because the insurer said it was above the allowable (read contracted) amount.

If you are interested in how medical costs and billing work, I strongly suggest checking out the site *** and just in case the link doesn’t go through you can Google- David Belk true cost of healthcare. He has a fantastic analogy of a grocery store where nothing has prices displayed and everyone pays a different amount for the same item.

Sorry this is getting a little off topic, but at least this post doesn’t read like the answer to a horrible word math problem a middle school teacher might assign.

***Link did not work

[its2much]

TheMiddleWay

Do you think people with MS should purchase health insurance with large or small deductibles? I get confused with this...
My children have a different health insurance provider than I do. For the heck of it, I just checked the "retail" price of one of the DMDs.
My insurance plan (which has a 50% copay for meds and NO out-of-pocket max...) says the price of a 30 day supply is $4641.33 with a specialty pharmacy, $5525.39 with a retail pharmacy (not covered under my plan) and
$15, 576.17 for a 90 day supply (which is also not covered under my plan).
I checked pricing with my children's insurance provider and was given the price of $4,170.92 for mail order 30 day and $4,172.17 for a retail pharmacy 30 day supply. I could not get 90 day pricing.

[TheMiddleWay]

If the system is broken- work it

Health insurance is complicated. I can’t really give an opinion of what anyone else should do because everyone’s disease and particular insurance plans are different. I want to emphasize that this is based on my personal experience as a patient and that I don’t work in the medical or insurance industries. You really need to read both potential plans carefully and get help from your plan or employment administrator if you can.

Typically a high deductible healthcare plan (HDHP) will have a higher deductible and lower premium than a traditional plan, but in my opinion for people with MS on DMDs that’s not the most important difference. The most important difference is that in a HDHP the deductible usually applies to all healthcare costs including medications and doctor visits. In traditional plans, the deductible applies only to hospital and lab/MRI charges; medications and doctor visits don’t apply to and aren’t subject to the deductible.

The upside of a traditional plan is that you pay co-pays for doctors and medications right away, without having to pay the deductible first. You only have to worry about the deductible if you are hospitalized or have tests done. The bad news is that there’s not usually a cap on how much you spend on co-pays. It’s possible that some plans have a max out of pocket (MOP) for medications, but the one’s I’ve dealt with don’t.

The downside of the HDHP is that until you reach the deductible, you’re on the hook for 100% of the allowable amount for all healthcare costs. The allowable amount is the amount the insurance company says a provider is allowed to charge for services, so if my neuro bills $400 for an appointment and the insurer says that $200 is the allowable amount, then I’m paying $200. The upside is that once you’ve reached the deductible, the insurance company pays 100% of all healthcare costs for the rest of the year, including medications. And the money you pay for your prescriptions applies to the deductible. In my case I’m not quite done for the year once I’ve paid the deductible because after that, I have to pay co-pays for medications up to the MOP, which is another $1,000.

The HDHP gets great for me when I factor in DMD mfg co-pay assistance. For my first refill of the year, I’m on the hook for 100% of my DMD up to the deductible. Because the drug is so expensive it’s more than my entire deductible, which means I pay the deductible plus the co-pay. This would be a hardship EXCEPT that I’m not the one paying most of it because the drug mfg is paying for it via co-pay assistance. The deductible applies to ALL my healthcare costs, so except for drug co-pays (which the mfg continues to assist with), I’m done paying for healthcare for the entire year, by the end of the first month. And the drug mfg is the one that paid most of it.

This could bite me if I happened to have other major healthcare costs in the first month before I refill my DMD because I would have to pay the deductible, but thankfully I’ve been pretty stable and that hasn’t happened. Either way, I know what my worst case scenario is for the year without having to do a lot of complicated math.
Just to be clear, I’m not some con artist. When my employer first switched to a HDHP there was no warning. Before I found out what co-pay assistance was willing to cover, I was literally trying to make the decision between eating and having a roof, and paying for my DMD.

[kingseth2]

TheMiddleWay,

Thanks for continuing this discussion. Re: your posts on 10-12 @ 12:04...

We're on the same page with this, but I don't see it working out. Bottom line, I believe I'll be at max out of pocket, along with ever single MS patient.

Also, re: your last post on 10/13 @ 9:05... that was a nice summation. Google the following text for another nice summary that about dot com posted.

"How To Save on Health Insurance if You Reach the Out-Of-Pocket Maximum"

[BigA]

If the mfg reaches out and offers co-pay assistance then here’s how that math might work out.

The pharmacy charges $4,500 per month for the DMD. The first month the mfg pays $2,710 in co-pay assistance, the ins. company pays $1,750, and Wanda pays $40. For each of the next 11 months the mfg pays $210, the ins. company pays $4,250, and Wanda pays $40.

The breakdown for the year is mfg pays $5,020, ins. co. pays $48,500, and Wanda pays $480. A lot of that $48,500 is coming back into the mfg’s pockets. In the end, they get a pretty great return on their co-pay assistance investment. It’s entirely possible that the mfgs offer co-pay assistance for reasons other than their warm tender hearts. *hypothetical patient with awesome employer

This is EXACTLY how I do it. My only critique of your comment is that the manufacturer doesn't reach out to people - that's our job to reach out to them. I tried for more than 2 years to set this up. It only started working after a slight change in my health insurance. So anyone should do this.

As for the reasons the company does it? I don't trouble myself much on that question. They're a business. I think they can get some warm and fuzzy feelings (they carried me for free for 2 years), but they are making money. This setup would be illegal if big pharma wasn't a worthy opponent to insurance companies. Body shops are not allowed to pay your auto deductible.

Anyway, everyone should do either the free route or the copay assistance route. And no one should complain about the cost of their meds unless they're paying for it. You don't hear cancer patients talking about how much their chemo costs. Or do they? In any case, very few of us are actually paying $4k per month.

[its2much]

I'm getting the impression

that one's income (believe me I'm far from living even comfortably, I can't make ends meet), is not considered by these programs? Is that somewhat correct?

[BigA]

that one's income (believe me I'm far from living even comfortably, I can't make ends meet), is not considered by these programs? Is that somewhat correct?

They will ask for it, but it's pretty wide open. You can make a decent living and still get assistance, except according to my experience, with Teva (Copaxone) who will refer you to RxAssist who are a charity and are concerned with your income.

[TheMiddleWay]

In my experience Copaxone Co-Pay Solutions (which is what Shared Solutions/Teva calls their co-pay program) didn't ask for any financial information. But every program varies, and your insurance company may be a factor, too. The best way to find out is to ask the marketing team for your particular drug. There is a sticky thread that lists all the numbers for each drug. http://www.msworld.org/forum/showthread.php?t=121313