Medicare beneficiaries could save about $500 per year with out-of-pocket insulin cap
Medicare Part B and Part D beneficiaries with diabetes who use insulin would have saved an average of $500 in 2020 if out-of-pocket insulin prices were capped at $35 that year, according to a report from HHS.
As Healio previously reported, President Joe Biden signed the Insulin Reduction Act into law in August 2022. The bill capped the out-of-pocket cost of insulin for Medicare beneficiaries at $35 per month. The cap began for Medicare Part D beneficiaries Jan. 1 and will take effect for Part B beneficiaries July 1. In a new report from the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE), researchers estimated that implementing the same insulin cap in 2020 would have saved $734 million for Part D beneficiaries and $27 million for Part B beneficiaries.
“Our analysis of survey and administrative data on insulin costs indicate that 1.5 million Medicare beneficiaries using insulin will experience savings under the Insulin Reduction Act’s new out-of-pocket spending cap that took effect on Jan. 1, 2023,” Bisma A. Sayed, PhD, health economist in the ASPE Office of Health Policy, and colleagues wrote. “In addition, the Insulin Reduction Act insulin cap may allow increased access to insulin for patients who were previously unable to fill their insulin prescription due to cost.”
Researchers used the 2019 Medicare Expenditure Panel Survey Household Component to examine out-of-pocket cost per insulin fill. Data from the Medicare Prescription Drug Event, Enrollment, and Part B files were obtained to calculate the total amount enrollees spent on insulin. The total amount spent above the Insulin Reduction Act’s limits was calculated to project out-of-pocket cost savings for Medicare beneficiaries.
The overall mean out-of-pocket cost for insulin in 2019 was $58 per fill, with most fills for a 30-day supply. Out-of-pocket costs varied by insurance type. Uninsured people spent a mean $123 per fill, whereas the mean out-of-pocket cost for people with private insurance or Medicare was $63. The overall median out-of-pocket cost was much lower at $9 per fill, meaning half of fills were for that amount or less.
“Out-of-pocket costs for uninsured patients would likely have been greater if not for charity care, safety net providers, patient assistance programs, free or sliding scale access through federally qualified health centers and safety net providers, and coupons,” the researchers wrote. “Similarly, out-of-pocket costs for patients with private insurance would likely have been greater if not for patient assistance programs and coupons.”
In 2020, 63% of people overall had out-of-pocket insulin costs, with 32% paying more than $35 per fill and 20% paying more than $70 per fill. Among Medicare beneficiaries, 68.5% had out-of-pocket costs, with 37% paying more than $35 per fill and 24% paying more than $70 per fill.
If the Insulin Reduction Act had been implemented in 2020, about 1.52 million Medicare Part D and Part B beneficiaries would have saved a combined $761 million that year, or $501 per person.
When data were analyzed by state, Texas, California and Florida were projected to have the most people who would benefit from the out-of-pocket insulin cap. Texas projected to have the highest out-of-pocket savings at $50,395,627, followed by Pennsylvania at $43,565,423 and Florida at $42,920,606. The three states projected to have the highest annual out-of-pocket savings per beneficiary are North Dakota at $805 of annual savings per person followed by South Dakota and Iowa, each with $725 of savings per person.
Collapse
Sayed BA, et al. Insulin affordability and the Inflation Reduction Act: Medicare beneficiary savings by state and demographics. Office of the Assistant Secretary for Planning and Evaluation, HHS. https://aspe.hhs.gov/reports/insulin-affordability-ira-data-point. Published Jan. 24, 2023. Accessed Jan. 25, 2023.
Read more about