New CMS Rule Spells Doom for America’s Minorities

New CMS Rule Spells Doom for America’s Minorities

June 5, 2020

The COVID-19 pandemic is shining a light on longstanding disparities that minority Americans face on a daily basis — greater incidence of chronic disease, poorer health outcomes, and higher unemployment rates.[1]

Unfortunately, as these Americans desperately worry about the state of their health and personal finances, the Centers for Medicare and Medicaid Services (CMS) just issued a rule that would harm both.

The CMS rule would allow insurance companies to exclude the value of coupons when calculating a patient’s out-of-pocket spending.[2] If insurers take advantage of this ruling, those already hit hard by COVID-19 — whether from loss of employment or the virus itself — will struggle to afford their critical medicines.

Minority American are suffering disproportionately from COVID-19. Nationwide, black Americans account for a significantly greater portion of reported cases and fatalities.[3] And in more than half of states, Hispanic individuals represent a higher infection rate than their share of the total population.[4]

In certain pockets across the country the discrepancies are particularly staggering. For instance, in Washington, D.C., black residents account for 75 percent of all deaths. In Mississippi, Louisiana, Alabama, and Georgia, they account for over half.[5] Meanwhile, in New York City and California, Hispanic Americans constitute roughly a third of all lives lost.[6][7]

In part, this disparity can be attributed to the prevalence of chronic disease. Minorities suffer from chronic illness — which increases the risk of mortality from COVID-19 — at a much higher rate than white Americans. [8] On average, 47 percent of black men suffer from heart disease compared to 37 percent of white men.[9] Meanwhile, Hispanic Americans are 10 percent more likely to develop type 2 diabetes than are white adults.[10]

These Americans depend affordable medications to manage their conditions. To increase the accessibility of these medications, drug manufacturers typically offer copay assistance coupons. These coupons function much like the ones used by consumers at grocery stores.

As it stands, patients can use manufacturer coupons to reduce their out-of-pocket pharmacy costs. Right now, most insurers count those coupons when calculating how much a patient must spend before hitting her deductible.

Say a patient needs a heart disease prescription refilled for $150. The drug’s manufacturer may offer $140 in coupons. The patient would only pay $10 at the pharmacy counter, but the whole $150 would count towards her deductible.

Unfortunately, the new CMS rule would upend this structure. It would allow insurers to ignore drug manufacturer coupons from the equation when calculating patients’ out-of-pocket spending.[11] This would increase how much money a patient must spend before full coverage kicks in.

This will especially hurt lower-income and minority Americans. When patients can’t afford their pharmacy bills, many stop taking the medicines they need. Such non-adherence already accounts for 10 percent of hospitalizations and 125,000 deaths annually.[12]

Lack of access to affordable medication, greater rates of chronic disease, and a deadly pandemic have created a perfect storm that will devastate minority communities. The new CMS rule takes us in the wrong direction.