Cost-Sharing Caps Help, but Don't Solve Insulin Price Issue

Miriam E. Tucker

July 27, 2020

Nationwide insulin cost-sharing caps would reduce out-of-pocket spending for some privately insured children and young adults in the United States, new research finds.

The analysis of 2018 US private insurance claims data was published online July 27 in JAMA Pediatrics, by Kao-Ping Chua, MD, PhD, of the Department of Pediatrics at the University of Michigan Medical School, Ann Arbor, and colleagues.

Several states and insurance companies have recently implemented caps on insulin out-of-pocket costs for patients. Colorado, for example, capped the price of insulin at $100 for a 30-day supply, as did Illinois (for people covered by state-regulated commercial health insurance plans), while the insurer Cigna's maximum is $25 for 30-day supplies.

The authors estimated the potential effect on out-of-pocket spending for insulin if national $25 and $100 caps were implemented and found that "caps could be a useful stop-gap measure to improve insulin affordability until more comprehensive reforms are implemented," Chua said in a statement from the University of Michigan.

However, the authors point out, "Caps have limitations. They do not address rising insulin prices, improve insulin affordability for the uninsured, or limit cost-sharing for diabetes-related supplies, such as insulin pumps."

Moreover, COVID-19 has now resulted in millions of Americans losing their jobs and their job-based health insurance.

"Unfortunately, patients who lose health insurance and cannot afford insulin are becoming additional victims of the COVID-19 pandemic," Chua said.

Caps Help Some More Than Others

The investigators analyzed data for 12,185 patients aged 1-21 years with type 1 diabetes who had insulin claims during 2018 recorded in the nationwide IBM MarketScan Commercial Database, which includes nonelderly patients with coverage from medium and large employers. One quarter were enrolled in high-deductible health plans.

Patients had a mean of 7.7 annual insulin claims, with an average of 49.3 days supplied per claim. The mean annual out-of-pocket spending was $494, and the median was $308. However, for 12.6%, the mean annual out-of-pocket spending exceeded $1000.

"To put those numbers in perspective, the Federal Reserve Board reported that 40% of Americans didn't have enough savings to pay for a $400 emergency in 2018," Chua noted.

The authors calculate that a $25 cap would reduce annual out-of-pocket costs for 59.9% of patients by an average of $481.

A $100 cap would benefit 17.7%, reducing their out-of-pocket cost by $558.

Among those with high-deductible plans, mean spending was $428 but exceeded $1000 for 21.7%. Spending caps would benefit a greater proportion of that group: 73.1% would benefit from a $25 cap, with a $628 reduction in out-of-pocket costs, and 31.9% would benefit from a $100 cap, with a $549 reduction.  

"Additional policies are needed to alleviate the financial burden among patients with type 1 diabetes," the authors conclude.

Chua is supported by the National Institute on Drug Abuse. Further support was provided by the National Institute of Child Health and Human Development, the JDRF, and the M-Diabetes Center of Excellence at the University of Michigan.

JAMA Pediatr. Published online July 27, 2020. Full text

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