Cap on insulin costs would benefit patients in individual, small group plans

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There are several legislative proposals in Congress, some stalled and some nascent, that would propose a $35-per-month cap on what insured Americans would pay out-of-pocket for insulin – and this cap in costs would benefit about 25% of those on individual and small group markets and about 20% of those in larger employer-sponsored plans.

That's according to a new analysis from the Kaiser Family Foundation, which comes as congressional Democrats are renewing the push for a $35 insulin cap that was included in the stalled Build Back Better Act. That legislation passed the House but became mired in the Senate.

The measure would require that insurers, including private plans and Medicare Part D plans, charge no more than $35 per month for insulin products, which can be lifesaving to those with diabetes. Private group or individual plans would have to cover at least one of each dosage form, such as a vial pen, and each type of insulin, from rapid-acting to ultra-long-acting and premixed. Cost-sharing would be limited to no more than $35 per 30-day supply of each type.

Of enrollees in the individual and small group markets taking insulin, more than one in four (26% and 31%, respectively) paid more than an average of $35 per month out-of-pocket for insulin in 2018. Low-income ACA Marketplace enrollees receiving cost-sharing assistance were less likely to have out-of-pocket insulin costs averaging over $35 per month. 

Plus, one in five insulin users with large employer coverage – which tends to have lower deductibles and copays – spend more than an average of $35 per month.

With a per-product cap on insulin costs, KFF found that the savings in many cases could be dramatic: More than one in 20 insulin users whose costs currently exceed the cap in the private insurance markets pay more than $150 per month per insulin product.

That means the median monthly savings for those on the individual market would be $27, with 25% of such patients saving at least $71. In the small group market, the median saving would be $19, and one-quarter would save at least $48; in the large group market, median savings would be $19 with one-quarter saving at least $42.

WHAT'S THE IMPACT?

Cost-sharing is often used in health insurance plans to spur patients to make cost-effective choices when it comes to medical care and prescription drugs. But one of the conclusions posed by KFF is that cost-sharing can pose a barrier to getting necessary care. In 2020, about one in six adults said they were delaying or not getting drugs due to costs or skipping medications to save money. 

Increased barriers to accessing necessary medication can sometimes lead to lower medication use and an increase in the cost of related hospitalizations and emergency room visits.

Reducing out-of-pocket cost-sharing for insulin means payers and insurers would cover a greater share of the costs, but some of those costs may be offset by increased medication adherence and reduced hospitalization rates, KFF said.

Importantly, a cap on out-of-pocket insulin costs would not address underlying insulin prices, with per-unit prices of the medication running seven times higher in the U.S. than in peer countries, KFF's analysis showed.

THE LARGER TREND

The Build Back Better Act, while stalled, was just one of several pieces of legislation that have been proposed to tackle insulin spending. In April 2021, Senator John Kennedy, R-La., introduced the Ending Pricey Insulin Act, and in February of this year, Senator Raphael Warnock, D-Ga., floated the Affordable Insulin Now Act.

According to KFF, Senate Majority Leader Chuck Schumer, D-N.Y., recently hinted that bipartisan talks are under way, led by Senators Susan Collins, R-Maine, and Jeanne Shaheen, D-N.H., to combine Warnock's bill with policies to lower insulin list prices. In 2019, Shaheen and Collins co-sponsored the Insulin Price Reduction Act, which proposed limiting insulin price growth.

Biden brought up the topic of insulin prices during his recent State of the Union address, saying it costs about $10 a vial to produce but typically costs 30 times that amount. 

PhRMA countered that insulins are less expensive today than in 2007. Citing data from the Bureau of Labor Statistics, the Pharmaceutical Research and Manufacturers of America said prescription drug prices rose just 1.3% over the last year.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com