Copay: A fixed cost that patients pay toward medications and health care. Insurers cover the difference between that payment and the total cost.
Copay Accumulator: Copay accumulator adjustment programs are insurance policies that refuse to count the value of copay assistance, such as manufacturer coupons, toward a patient’s deductible.
Coinsurance: A percentage of the total cost patients must pay toward medications and health care, often ranging between 30 and 50 percent of the total treatment cost. High coinsurance payments are likely to catch patients offguard at the pharmacy counter.
Pharmacy Benefit Manager: Third party companies that manage prescription drug programs for insurance companies, large employers, Medicare Part D drug plans, and other payers. PBMs work with drug manufacturers and pharmacies to negotiate discounts and rebates on medicine and develop formularies that determine what medicines are covered by certain insurances.
Specialty medicine: Innovative medications that treat complex and/or chronic medical conditions. As insurers increasingly shift cost burdens onto patients with these conditions, the out-of-pocket costs for specialty medicines can become prohibitive.
Specialty tiers: Insurance companies have traditionally organized their formularies – the lists of the drugs that they cover – into three tiers, with copays/out-of-pocket costs corresponding with each tier. Now, however, insurers are increasing the out-of-pocket costs by utilizing specialty tiers – higher formulary levels which require coinsurance rather than a fixed, manageable copay. The out-of-pocket costs for specialty tier drugs can be hundreds or even thousands of dollars for even a 30-day supply.
Adverse tiering: The practice in which health insurers move all available medications (even generics) prescribed for certain conditions to the highest specialty tier, resulting in higher out-of-pocket costs associated with access. This process pushes treatment out of financial reach for entire patient populations – especially if they are diagnosed in the middle of their health plan’s year when they have no other options but to remain on their current plan.
There are indications that adverse tiering is intended to drive patients with chronic disease onto other health plans – a motive which not only discriminates against entire patient populations, but also makes treatment very difficult, especially if patients require treatment in the middle of a health plan year.