"Reverse Copay" Arrangements Gain Ground Among Rx Payers

Ken Rankin
Published Online: Friday, October 1, 2004

The steadily rising cost of prescription drug benefits is prompting a growing number of employers to shift to "reverse copay" arrangements. This switch could leave millions of Americans paying a bigger share of their Rx charge out of their pockets.

Unlike traditional prescription insurance plans, which require the patient to pay a relatively small copayment, reverse copay arrangements work just the opposite way. After the employer picks up the cost of the copay, the patient is responsible for the remainder of the prescription charge.

One recent survey found that 6% of the employers polled had already shifted to reverse copay arrangements. Researchers at Hewitt Associates report that another 35% are now considering this approach.

Advocates of this strategy contend that reverse copay arrangements do not merely shift the employer's cost to the employee, but also they help to hold down overall drug spending by making patients more likely to seek out lower-priced generic alternatives.

Some drug chains welcome the shift, reasoning that profit margins tend to be higher on generics than on branded prescription drugs.

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