Mandated caps reduce insulin out-of-pocket costs among US Medicare beneficiaries

A new analysis led by researchers at the Johns Hopkins Bloomberg School of Public Health finds that out-of-pockets caps on insulin for Medicare Part D beneficiaries have reined in insulin prices.

The Inflation Reduction Act of 2022 mandated an out-of-pocket cap of $35 for a 30-day insulin supply for Medicare Part D beneficiaries starting January 1, 2023. This is the first time the federal government has imposed caps on insulin prices for all Medicare beneficiaries.

The researchers note that the finding that about one-quarter of Medicare beneficiaries paid more than $35 for a 30-day supply of insulin in 2023 was unexpected. Their analysis found that these beneficiaries had at least one prescription that was not prorated to the Inflation Reduction Act limit.

Approximately 3.8 million Medicare beneficiaries use insulin as a treatment for type 1 or type 2 diabetes. Insulin replaces the natural metabolic hormone of the same name, whose production is virtually nonexistent in type 1 diabetes, and is also compromised in many cases of type 2 diabetes.

As for the insulin-using Medicare Part D beneficiaries still paying more than $35 for a 30-day supply in 2023, Fang notes that CMS's formal guidance is for the $35 rule to be applied only for full multiples of 30 days. "If the prescription falls in between, the patient can be charged up to the next full multiple of a month," Fang says. "For example, health plans can treat a 45-day supply the same as a 60-day supply and charge up to $70."

He adds that variations in average 30-day insulin costs by state-from $10.36 in Washington, D.C., to $31.09 in Minnesota in 2023-may partly reflect state-level differences in how pro-rating is handled by Medicare insurance plans.

"Trends in Insulin Out-of-Pocket Costs Among U.S. Medicare Beneficiaries" was co-authored by Michael Fang, Chen Dun, Dan Wang, Caitlin Hicks, Elizabeth Selvin, Jung-Im Shin, and Mariana Socal.

Support for the research was provided by the National Institute of Diabetes and Digestive and Kidney Diseases (K01DK138273, R01DK139324).

Source:

Johns Hopkins Bloomberg School of Public Health

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