Updated Study: Insulin Copay Cap Lowers Total Spending for Medicare Beneficiaries

The Medicare Part D Senior Savings Model — a CMS effort to test $35 copays for insulin — led to lowered total costs for beneficiaries.

Medicare beneficiaries save by capping insulin copays at $35, according to a research letter published recently in JAMA. The study looked at the Medicare Part D Senior Savings Model in both traditional Medicare standalone Part D and Medicare Advantage Prescription Drug.

The Part D Senior Savings Model is a voluntary program that allowed Medicare prescription drug plans to offer 30-day supplies of insulin at or below a $35 copayment. It began in January 2021 as a test of the $35 cap on insulin copays and will continue through 2033. This copay cap for insulin will be required for all Part D plans beginning in 2023 as part of the Inflation Reduction Act.

"It remains to be seen how the Inflation Reduction Act will impact insulin spending," lead author Khrysta Baig, MSPH, a Ph.D. student in the health policy program at Vanderbilt University School of Medicine, told Formulary Watch. "What we would hope to see is that even if insulin spending increases, this increase may be driven by better adherence – not skipping or stretching out doses – and by beneficiaries utilizing the best regimen for their health needs. If that is the case, insulin spending may increase but decreases in diabetes-related medical expenses may offset the increased drug spending."

Related: Senate Passes Bill that Caps Insulin at $35 for Medicare Beneficiaries

In the JAMA study, Baig and Stacie B. Dusetzina, Ph.D., compared premiums and total spending for long-acting insulin users selecting prescription drug plans in 2022 and estimated potential savings for beneficiaries selecting Senior Savings Model-participating plans. Dusetzina is a professor of health policy and Ingram Professor of Cancer Research at Vanderbilt University Medical Center in Nashville.

In this cross-sectional analysis, Baig and Dusetzina included prescription drug plans that covered at least one of four commonly filled long-acting insulin pens: Sanofi’s Lantus SoloStar, Novo Nordisk’s Levemir FlexTouch, Lilly’s Basaglar KwikPen, and Novo Nordisk’s Tresiba FlexTouch (Novo Nordisk). They standardized 30-day supplies to five 3-mL/100-unit pens. They also calculated annual expected spending on insulin for 12 insulin fills, assuming six fills in the initial coverage phase and six fills in the coverage gap.

In 2022, among plans that covered the long-acting insulin pens, model-participating traditional Medicare standalone Part D plans had the highest mean annual Part D premiums. Within these plans, mean annual total spending (including premiums, deductibles, and co-payments/co-insurance) was $1,162 compared with $1,962 for those with enhance plans not participating in the model and $1,926 for basic plans that were not eligible for participation.

Medicare Advantage Prescription Drug plans that participated in the model had the lowest mean annual Part D premiums. Among these plans, mean annual total spending for those who were in model-participating plans was $522 compared with. $1,137 for nonparticipating enhanced and $1,968 for basic plans.

The authors said limitations of the study included a lack of data on beneficiary plan switching, the number of insulin users by plan type, and other medication use. Additionally, this analysis considers only 2022 plan choices.

Investigators pointed out not all plans are required to cover all insulin products so it is important beneficiaries shop plans to make sure the plan they pick covers the medications they use. "Of plans that cover a beneficiary’s current medications, look for ones with the lowest total costs from premiums, deductibles and medication copayments/coinsurance. Additionally, if shopping Medicare Advantage plans, confirm whether doctors and medical facilities are in-network, the amount you would be expected to pay for the types of medical care you receive on an annual basis, and the out-of-pocket maximums on the plans," Baig said.

Updated to include information from the investigators.