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Co-pay coupons: Will they or won't they be allowed? Posted: November 24th, 2013

By Maryalene LaPonsie

With many health insurance plans charging higher co-payments for brand name drugs, pharmaceutical companies often provide coupons to help consumers reduce their out-of-pocket costs. However, the ability of some consumers to use them seems to be in jeopardy.

A pair of communications from government agencies appears to provide contradictory guidance on whether the coupons can be combined with health insurance coverage purchased on government-run exchanges. Health and Human Services Secretary Kathleen Sebelius sent a letter indicating the coupons would be accepted while a memorandum from the Center for Consumer Information and Insurance Oversight comments the department has 'significant concerns' with the practice.

Controversy about co-pay coupons

Co-pay coupons may seem like a benign way for pharmaceutical companies to help consumers afford their drugs, but critics contend they are a drain on the health care system while a boon for manufacturers.

A 2011 study prepared for the Pharmaceutical Care Management Association found the use of co-pay coupons could be associated with up to $3 billion in additional costs to employers, governments and consumers each year. Based on trends at the time, co-pay coupons are said to be poised to increase prescription drug costs by $32 billion over a 10 year period.

However, not everyone is convinced co-pay coupons are a bad idea. A survey conducted by Decision Resource Group found 70 percent of managed care organizations support the use of co-pay coupons. In addition, 60 percent said they felt the coupons allow health care providers the opportunity to prescribe superior drugs that might otherwise be out of their patients' reach.

Health insurance exchanges and coupons

Questions regarding the ethics of the coupons have already resulted in a longtime anti-kickback law prohibiting their use in conjunction with federal health insurance plans such as those offered through the Medicaid, Medicare and Tricare programs.

Some had speculated that prohibition would extend to health insurance plans offered on government exchanges as well. However, a letter from Secretary Sebelius to Representative Jim McDermott (D-Wash.) seemed to green light the use of co-pay coupons by saying medical insurance sold on the exchanges was not the same as federal plans.

That wasn't the end of the discussion though with a memorandum from the CCIIO following shortly thereafter. That communication didn't outright contradict the Sebelius letter but did express concern that commercial entities had plans to support cost-sharing obligations which could include promotions such as co-pay coupons. The memo went on to say HHS discouraged the practice and encouraged issuers to reject third party payments.

For now, it seems up in the air whether consumers can use co-pay coupons should they buy their medical insurance on a government exchange. With UnitedHealthcare estimating between 100 to 125 million prescriptions use a co-pay coupon each year, the government's final decision has the potential impact to affect millions of customers nationwide.