New Law Mandates Out-of-Pocket Drug Costs Count Towards Deductibles, Alters Medicaid Drug Pricing in 2027

Alright, let's talk about the "Every Dollar Counts Act of 2026." This bill is looking to make a pretty significant change to how your health insurance handles prescription drug costs, especially for those moments when you decide to pay for a medication without running it through your insurance first. The big takeaway? Starting with plan years in 2027, any money you shell out-of-pocket for a prescription drug, even if you skip using your insurance benefits for that specific purchase, has to count toward your health plan's deductible and your overall out-of-pocket maximum. So, if you grab a drug that's covered by your plan but pay full price at the pharmacy, that cash still helps you hit those insurance thresholds. This applies to most group health plans and individual health insurance policies.

Your Wallet and Your Deductible

Think about it: you're trying to hit your deductible, and every dollar matters. This bill, specifically in Section 2, aims to make sure that money you spend on prescriptions isn't just disappearing into a black hole if you choose not to use your insurance at the register. Maybe you found a better cash price, or you're using a discount card. Under this new rule, that money still helps you chip away at your deductible and out-of-pocket maximum. For a busy individual or family, this could mean reaching those limits faster, which then means your insurance starts covering more of your costs sooner in the year. It's about making sure your actual spending on covered drugs contributes to your overall cost-sharing, regardless of how you initially pay for them. This could be a real benefit for someone managing ongoing prescriptions who occasionally finds a cash deal that beats their co-pay.

The Medicaid Angle: What Gives?

Now, here's where things get a bit more complex, and honestly, a little concerning. The bill also tinkers with how drug prices are calculated for Medicaid. Specifically, when the government figures out the "best price" and the "average manufacturer price" for drugs under the Medicaid Drug Rebate Program, any price reduction given to someone who buys a drug without using their health plan or insurance benefits will be excluded from that calculation. What does that mean in plain English? Essentially, if a drug company offers a steep discount to a cash-paying customer, that discount won't be factored into the baseline prices Medicaid uses to negotiate its own drug costs. This is detailed in the conforming amendments to Medicaid Drug Pricing within Section 2.

Who Benefits, Who Pays?

For you, the individual consumer, the part about your out-of-pocket drug costs counting towards your deductible is generally a win. It brings more transparency and fairness to how your spending is recognized by your health plan. But for the Medicaid program, and ultimately taxpayers, there's a potential downside. By excluding those cash discounts from the "best price" and "average manufacturer price" calculations, it could mean that the benchmark prices for drugs under Medicaid might not be as low as they otherwise could be. This could lead to higher drug costs for the Medicaid program, which is funded by all of us. So, while your personal deductible might get hit faster, the overall cost of drugs for a major public health program could potentially tick upwards. It's a classic example of a bill with two sides of the coin, offering a clear benefit in one area while introducing a subtle but significant shift in another.