Congress must fix loophole that is costing patients at the pharmacy

More Americans today have health insurance through the Affordable Care Act (ACA) than ever before. Eleven years after its enactment, the ACA has withstood yet another Supreme Court challenge and continues to help individuals and families access health care — despite being under nearly constant attack from conservatives. The complexity of the law has required the Department of Health and Human Services (HHS) to continuously work with Congress and stakeholders to ensure that it is fulfilling its promise to provide affordable care to vulnerable patients.

Despite its overwhelming success, the ACA has a few loopholes that are being exploited and that ultimately hurt patients. Specifically, the ACA allows certain health plans to unfairly control how they manage a patient’s out-of-pocket costs for prescription drugs. As President Biden and HHS work with Congress to strengthen the ACA and close gaps in the law, they should address a loophole in the essential health benefits provision that lets insurance companies increase profits at the expense of patients.

Essential Health Benefits (EHB) are a foundational pillar of the ACA and provide critically important protections for patients. They consist of a set of 10 core healthcare services that ACA health plans must cover, including preventive services, inpatient and outpatient hospital care, contraceptives, and prescription drugs, among others. The EHB provision applies to new plans (those sold on the ACA marketplace after the law was enacted) in the individual and small group markets.

The ACA sets a maximum amount for out-of-pocket costs for patients, and if a patient pays out-of-pocket for their prescription drugs (yes, an essential health benefit), that amount counts towards their out-of-pocket maximum. Once they hit that maximum, their insurance should cover the rest of their out-of-pocket costs for the year.

This is where the loophole happens. Some insurance companies have worked the system so that while EHBs may still be covered, the consumer’s out-of-pocket cost for those services may not count toward their deductible.

In this scenario, a patient with a health plan that covers prescription drugs but does not define prescription drugs as an EHB for cost-sharing purposes may spend money on drugs that doesn’t count toward their out-of-pocket maximum. All year, a patient could pay out-of-pocket for prescriptions but never reach their maximum and see their insurance kick in. This is profitable for a health plan and painfully unaffordable for a patient who is trying to make ends meet.

This isn’t the only ACA loophole hurting patients. Many ACA marketplace health plans are including fine print in their policies that says any copay assistance that a patient receives from a drug company or non-profit also doesn’t count — either toward their annual deductible or out-of-pocket maximum. Combined, the EHB loophole and new “copay accumulator” policies force patients to pay excessive amounts and frankly, flout the original intent of the law — which is to keep prescription drug costs down and protect patients.

HHS Secretary Xavier Becerra has signaled a willingness to work with Congress to find solutions that build on the intent of the ACA, and President Biden called for “lower prescription drug costs” in his joint address to Congress. With these loopholes in the crosshairs, we have an opportunity to build on the remarkable success of the ACA in covering millions more Americans while improving access to affordable prescription drugs. Congress should clarify that any service covered by a health plan is defined as an EHB, so patients’ out-of-pocket payments for Rx drugs are always counted towards their maximum requirement.

Congress should also clarify that the ACA definition of “cost-sharing” applies to any payment made by or on behalf of a patient, to ensure that copay coupons, discounts, and other assistance programs count towards their out-of-pocket limit. In fact, more than ten states have already enacted such protections from so-called “copay accumulator” policies, six of them in 2021 alone.

For Congress, there is a path forward to close loopholes and help patients afford their prescriptions.  For President Biden and HHS, this is a chance to strengthen the ACA in the process.

Sally Greenberg is the Executive Director of the National Consumers League (NCL), a private, nonprofit advocacy organization that aims to promote social and economic justice for consumers and workers in the United States and abroad.