Out-of-Pocket Costs for Diabetes High, Not Always Due to Insulin

Miriam E. Tucker

June 03, 2020

For privately insured individuals with type 1 diabetes in the United States, out-of-pocket costs for insulin are typically lower than for other diabetes-related supplies. But overall out-of-pocket expenditure — taking into account everything that is needed to manage diabetes — is still very high.

Indeed, insulin costs have remained relatively stable over time in such private insurance plans, according to another analysis that looked at all types of diabetes. 

Those are the findings of two separate research letters published June 1 in JAMA Internal Medicine.

The first research letter examined all costs for privately insured patients with type 1 diabetes, finding a mean out-of-pocket spend of approximately $2500 a year.

"Insulin is the difference between life and death for patients with type 1 diabetes, and efforts to make it more affordable are critical," said lead author of the first letter Kao-Ping Chua, MD, PhD, of the Department of Pediatrics, University of Michigan Medical School, Ann Arbor.

"However, our study shows that even if insulin were free, families would still have substantial out-of-pocket costs for other healthcare," he noted in a press release from his institution.

The other research letter examined trends in insulin out-of-pocket costs in 2006-2017 among US patients with any type of diabetes who had different types of private health insurance plans. The study was by Amir Meiri, MD, of Harvard Pilgrim Health Care Institute, Harvard Medical School, Boston, Massachusetts, and colleagues.

Although the study showed relatively stable costs associated with insulin for many privately insured patients with diabetes over the time period examined, "monthly out-of-pocket payments" may still "be burdensome for low-income individuals," the authors say.

Writing in an accompanying editorial, Laura M. Nally, MD, and Kasia J. Lipska, MD, both of Yale University, New Haven, Connecticut, agree that "insulin is only one component of diabetes management."

Yet they stress, "Diabetes does not selectively occur among individuals who can afford insulin and who have health insurance; it affects people regardless of their socioeconomic status."

"The federal healthcare system should urgently act to make insulin, diabetes-related supplies, and other healthcare services affordable and available to everyone who needs them."

Out-of-Pocket Costs for Supplies Higher Than for Insulin

Chua and colleagues compared out-of-pocket costs for insulin with those for other diabetes-related items, including insulin pump supplies, and glucose meters/continuous monitors, for privately insured patients with type 1 diabetes during 2018.

They included data for 65,192 patients aged 1-64 years with type 1 diabetes who had employer-sponsored coverage from medium to large firms.

The population included children of employees (12%), and 22.5% of patients had enrolled in high-deductible ($1350 individual/$2700 family) private plans. Overall, 56.8% used insulin pumps and/or continuous glucose monitors (CGMs).

Annual out-of-pocket spending was lower for insulin ($435) than other diabetes-related supplies ($490), including insulin pump supplies, continuous and fingerstick glucose monitoring equipment, urine testing strips, pen needles, and syringes.

Mean annual overall out-of-pocket spending was $2414, but this varied widely.

For 8% of the population spending exceeded $5000. Insulin accounted for just 18% of overall out-of-pocket spending.

Not surprisingly, out-of-pocket spending increased with the sophistication of the diabetes technology used, ranging from just $79 for those using injections and fingerstick monitoring to $1037 for those using both insulin pumps and CGMs.

In general, for children, out-of-pocket costs of diabetes-related supplies were considerably higher than for insulin ($823 vs $497), while for adults the two were similar ($445 vs $427).

"These technologies can improve quality of life and improve diabetes control for all patients, but can be especially important to the families of children with type 1 diabetes," Chua said.

Also not surprisingly, those with high-deductible plans had greater out-of-pocket costs in each category ($3132 vs $2205 overall).  

Chua says the study's findings are particularly timely given recent efforts by states and insurers to cap out-of-pocket costs for insulin, calling these "important first steps."

But there is still a long way to go, he said.

"Policymakers should improve the affordability of all care for type 1 diabetes," Chua noted.

Nally and Lipska agree.

"Although capping insulin copayments is a step in the right direction, such a state law does not protect many individuals with federally regulated insurance plans, with Medicare, or without any insurance," they note.

"In addition, insulin copayment caps do little to ease the financial burden of paying for diabetes-related supplies or other healthcare services," they point out.

Private Plans Shield Members From Out-of-Pocket Insulin Costs

The other study examined out-of-pocket spending for 10,954,436 insulin claims for 612,071 unique patients with diabetes (either type) in different types of private commercial health plans during 2006-2017:

  • High-deductible health plans (HDHP) with a health savings account (HSA), which have high medication costs because they require payment of the full reimbursement price until the annual deductible is reached (7% of claims).

  • Plans with health reimbursement arrangement (HRA), which typically have tiered drug copayments and members can use their reimbursement account to pay for medical expenses (4% of claims).

  • No-account plans (without an HSA) that also typically have tiered drug copayments (80% of claims).

The price of insulin per patient per month rose from $143 in 2006 to $280 in 2012 to $394 in 2017.

However, the share of the insulin price per member per month paid by the patient actually declined from 24% in 2006 to 16% in 2012 to just 10% in 2017.

Because of the increase in insulin price, those corresponding costs still rose from $52 in 2006 to $72 in 2012, but then dropped to $64 in 2017.

By plan type, out-of-pocket costs per member per month were lowest for those no-account plans (from $52 in 2006 to $48 in 2017) and highest for those with HDHP HSA plans ($93 in 2006 to $141 in 2017). 

"The data suggest that privately insured patients have been relatively shielded from insulin price increases and that commercial health insurers have accommodated higher insulin prices by increasing premiums or deductibles for all members," Meiri and colleagues write.

Most Vulnerable Missing From Study: COVID-19 Will Strike Further Blow

Although generally agreeing with this conclusion, Nally and Lipska nevertheless fault the data from Meiri and colleagues on several counts.

First, they reiterate that the population was limited to those with private insurance plans, and therefore "the groups most vulnerable to high insulin costs may be missing from the study."

Also, the data do not capture all sources of out-of-pocket insulin spending for people with high copayments, such as the federal 340B Drug Pricing Program, GoodRx, or drug manufacturer discounts.

Moreover, the editorialists note, the study only assessed mean out-of-pocket costs without assessing differences in spending across individuals.

And, Nally and Lipska point out, the data do not account for rebates and discounts negotiated between pharmacy benefit managers and drug manufacturers. "As a result, these data on health plan spending on insulin may overestimate the net health plan expenditures," they write.

Chua also warns that the COVID-19 pandemic has had a major adverse impact on the diabetes community.

"Many people with private insurance have lost their jobs and insurance coverage...This may put healthcare like insulin and diabetes-related supplies out of reach," he said.

Chua has reported receiving support from the National Institute on Drug Abuse. Meiri has reported receiving grants from the Centers for Disease Control and Prevention and the National Institute of Diabetes and Digestive and Kidney Diseases for the study. Nally has reported receiving a grant from Novo Nordisk outside the submitted work. Lipska has reported receiving support from the Centers for Medicare & Medicaid Services and the National Institutes of Health.

JAMA Int Med. Published online June 1, 2020. Letter 1, Letter 2, Editorial

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