The Trump Administration can deliver a win that puts Americans first and tackles high medication costs for families. Today, glaring loopholes are empowering insurers and middlemen in our healthcare supply chain to sidestep regulations and patient protections and shift costs onto hardworking Americans. But, a simple promised fix can turn that around.
Two years ago, health insurers and pharmacy benefit managers (PBMs) siphoned nearly $5 billion in copay assistance that patients relied on to afford their prescription medications. Using hidden schemes, insurers and PBMs are cashing in while patients face the reality of breaking the bank, cutting their medications in half, or stopping treatment altogether. We know the Trump Administration is serious about lowering drug costs for American families, but to make that a reality action must be taken against these scrupulous middleman practices.
One such insurance loophole lies in the Essential Health Benefits (EHB) provision of existing federal law. The EHB provision, part of a broader federal statute, requires health insurance plans to cover ten categories of essential health services, including prescription drugs. The EHB provision was designed to ensure patients have access to vital, often life-saving medications and other critical preventive services to manage their health.
But insurers and PBMs are sidestepping this protection by reclassifying certain covered drugs as “non-essential” for the purposes of skirting patient cost-sharing protections. Under the “EHB loophole”, patients may think they are making progress toward their out-of-pocket limit, only to be hit with unexpected costs when they learn none of their spending was counted toward their deductible and their out-of-pocket maximum was increased artificially without their knowledge. This isn’t just a technicality, it’s a deliberate strategy that insurers, PBMs, and third-party vendors use to divert funds for themselves that were meant to support patients with serious chronic and complex conditions.
In 2024, the Centers for Medicare and Medicaid Services (CMS) finalized a rule protecting Americans in individual and small group plans from the EHB loophole. However, enrollees in large group and self-funded plans—which cover the majority of Americans with employer-sponsored insurance—remain unprotected from this growing scheme.
The Department of Labor said they would close this loophole by issuing a federal rule clarifying that all drugs covered by large group and self-funded plans must be considered essential health benefits, preventing insurers and middlemen from evading cost-sharing rules that protect Americans from exorbitant healthcare costs. But, to date no rule has been proposed.
This should be a familiar issue for U.S. Secretary of Labor Lori Chavez-DeRemer. In the 118th Congress, then Representative Chavez-DeRemer, who represented the fifth district of Oregon, cosponsored the Help Ensure Lower Patient (HELP) Copays Act, which would ensure all copay assistance counts toward patient cost-sharing and prohibit the reclassification of covered drugs as “non-essential.”
The data shows just how urgently this protection is needed. In 2023, insurers and PBMs manipulated $4.8 billion in cost-sharing assistance through copay accumulator and copay maximizer programs. Last year, 47 percent of PBMs and insurers in large group markets used so-called “copay maximizer” programs that exploit the EHB loophole. That’s more than double the rate in 2020.
Earlier this year, 80 organizations representing patients, providers, and public health advocates delivered a letter to U.S. Secretary of Labor Chavez-DeRemer urging her to close the EHB loophole with the promised federal rule. Without it, patients with HIV, hepatitis, cancer, and other serious conditions will keep paying more for the same care, while insurers pocket assistance never meant for them.
The Department of Labor has the authority and responsibility to act. A clear rule affirming that all covered drugs count toward a patient’s out-of-pocket limit would end this exploitative practice and restore the rule of law for patients who deserve those protections.
President Trump says he doesn’t believe in loopholes. His administration now has the chance to prove it—by closing this one and deliver real savings to American families burdened by out-of-pocket prescription drug costs. By standing up to healthcare middlemen and putting patients before profits, President Trump will show that he is fighting for working families.
This isn’t just smart policy—it’s America First in action.
Carl Schmid is the Executive Director of the HIV+Hepatitis Policy Institute.
