Navigating Medicare Insulin Coverage Still Requires Caution

Kerry Dooley Young


January 18, 2023

Deidre Waxman of Brookline, Massachusetts, finds it a bit vexing to see reports that the Inflation Reduction Act dropped insulin costs to $35 a month for people enrolled in Medicare.

"It's a much more complicated issue, and it's not really $35 a month," Waxman, a retired social worker, told Medscape.

Waxman notes that many people on insulin take both a long-acting basal form and then a shorter-acting insulin. So even the people on Medicare making the most of their benefit may end up paying $70 a month for insulin, as Waxman does.

And people need to be careful to make sure the insurer they choose to manage their Medicare drug benefit covers the insulin they need. Otherwise, they will not benefit from the federal government's efforts to cap out of pocket spending by people on Medicare at $35 a month — per insulin prescription.

"If you are in the wrong plan and your plan doesn't cover your insulin that you need, you may be paying more," she said.

Evidence already exists that many people enrolled in Medicare don't always get full advantage of federal efforts to cap insulin prices.

The widely reported $35 monthly cap of the Inflation Reduction Act, signed into law in August, is basically an extension of an existing federal program, the Medicare Part D Senior Savings Model. Waxman was among the people who made use of this previous federal effort to help people afford insulin. It kicked off in 2021. Insurers who opted to participate offered certain insulins with copays capped at $35 a month.

In a November research letter published in JAMA, Khrysta Baig, MSPH, and Stacie B. Dusetzina, PhD, of Vanderbilt University Medical Center, showed how people may have missed out on chances for savings through the Medicare Part D Senior Savings Model.

Too often, people focus on the monthly bill or premium cost, missing out on savings from plans with more generous coverage of the medicines that they are taking, they wrote.

Their study looked at potential 2022 savings for people who opted for Medicare drug coverage that included a voluntary $35 cap on insulin products, even in cases where monthly premiums were higher. Their study focused on plans that covered widely used insulin pens: Lantus SoloStar, Levemir FlexTouch, Basaglar KwikPen, and Tresiba FlexTouch.

Picking a traditional Medicare stand-alone Part D plan with the special insulin coverage resulted in a mean total 2022 tab of $1162, factoring in premiums, applicable deductibles and copayments or coinsurance for 12 insulin fills. This included about $760 for 12 monthly premiums of $63 a month.

But opting for cheaper premiums could cost more than $700 in the long run. The comparable tab for stand-alone Part D plans that didn't participate in the Medicare Part D Senior Savings Model was more than $1900, even with lower monthly premiums of about $40 per month.

There are cautions to be heeded as well about opting for what's called a Medicare Advantage plan in an effort to save money, Baig and Dusetzina wrote in JAMA.

In these plans, insurers manage the Medicare benefit for medical services and pharmaceutical coverage, and stand-alone Part D plans handle only pharmacy. Medicare Advantage plans have smaller networks of physicians than do traditional Medicare, meaning people may pay less for their medications but lose access to some physicians, they wrote.

"In 2023, beneficiaries who use insulin should be looking for plans that cover their insulin and other current medications," Baig told Medscape in an email. "Although plans must only charge $35 or less for a 30-day supply of insulin, they are not required to cover all insulin products. This means it is important to shop plans to make sure the plan you pick covers the medications that you use."

And people enrolled in Medicare who need insulin may be able to get help if they haven't made a good choice for 2023, Baig said. She suggested reaching out to the appropriate State Health Insurance Assistance Program (SHIP). They have counselors who provide free assistance to help people evaluate their options.

"They are knowledgeable and unbiased resources for one-on-one Medicare counseling and guidance," Baig said.

Switching Plans?

Navigating the different Part D options for insulin was especially tricky in 2023 due to a lack of up-to-date information.

Insurers' plan bids for 2023 drug coverage were due to the Centers for Medicare and Medicaid Services (CMS) in June 2022. This was before the law mandating the $35 cap on covered insulins, CMS said in a November backgrounder.

So CMS has anticipated some glitches in the 2023 initiation of the new broader $35 cap and is seeking to aid those who may have difficulties getting their prescriptions covered.

In an email, CMS told Medscape that the agency will help people who use insulin who experience any issues or concerns in accessing the new cap. The paths for providing assistance include using an existing exception, known as a special enrollment period, to help them change to another plan.

CMS also told Medscape that people in Medicare Advantage plans can make a switch early in the year, between January 1 and March 31, to a different Medicare Advantage Plan or switch to traditional original Medicare and join a separate Medicare Part D plan.

People who believe that they made a wrong plan choice because of inaccurate or misleading information can call 1-800-MEDICARE or contact a SHIP program to seek help, CMS said.

On its website, CMS also says that health plans have until the end of March 2023 to update their systems to reflect the $35 cap on insulin. Some customers of Part D plans might be charged a higher amount during this time when they fill a prescription for insulin.

Health plans must reimburse people who are charged more than $35 for a month's supply of a covered insulin product in January or February, CMS said. They said to contact the Part D plans to find out how to get repaid. In addition, similar caps on insulin used in traditional pumps will take effect July 1. This falls into Medicare Part B coverage, whereas insulin pens are covered by Part D.

In general, the CMS Part D plan finder can be very helpful for those who wish to shop for a drug plan each year, Dusetzina said. Many people find it a challenge to evaluate the different options for Medicare drugs coverage and thus stick with a choice that may prove more costly for them.

"Because your plan benefits can change over time if you don't switch you might be paying more than necessary for your drug coverage," Dusetzina told Medscape in an email. "For example, some plans increase premiums over time, taking advantage of the fact that most people don't change plans once they pick them. This can mean you are paying more than needed for your benefits."

'Confusing Beast'

Congress designed the Medicare drug benefit, which took effect in 2006, with an aim of having consumers help manage the costs of their medicines.

But as Dusetzina noted, few consumers go through annual reviews of their options for Medicare pharmacy coverage.

Only 27% of those in stand-alone Part D plans had either shopped around their 2020 options for drug coverage or had had these kinds of comparisons done for them by someone else, the nonprofit Kaiser Family Foundation (KFF) said in a November report, citing its analysis of CMS survey data.

And only 18% of those with Medicare Advantage plans with drug coverage had done so.

"This 'stickiness' could indicate that beneficiaries are satisfied with their coverage and do not think they need to shop for better coverage, but it could also signal a more fundamental issue that arises when consumers face a multitude of plan choices and become too overwhelmed to make a decision," wrote KFF researchers in the report.

Put another way, the Part D program can be a "confusing beast," David Lipschutz, associate director of the Center for Medicare Advocacy, told Medscape.

"You have scores of plans that have discretion to create their own formularies within certain guidelines," Lipschutz said.

The Center for Medicare Advocacy last year posted a blog on its website trying to explain the Part D drug provisions of the Inflation Reduction Act, in particular the insulin coverage.

More than 3.3 million people enrolled in Medicare use some form of insulin, according to CMS.

Popular forms of insulin sold in the US include the Lantus SoloStar, which CMS shows as having cost the Part D program $2.66 billion in 2020. Another $1.8 billion went for the Novolog FlexPen, according to CMS.

These pens are part of a continual— and welcome — process of drug makers over decades seeking to improve insulin. But insulin itself is an old and well-established drug. The current biotech form has been sold in the United States since the early 1980s.

Eli Lilly introduced the first US commercial insulin, derived from animal tissue, in 1923.

"The expense and logistics of large-scale insulin manufacture were initially daunting," Abigail Zuger, MD, reported in a 2010 The New York Times article on the history of the drug.

"But soon trainloads of frozen cattle and pig pancreas from the giant Chicago slaughterhouses began to arrive at Lilly's plant," Zuger wrote. "By 1932 the drug's price had fallen by 90 percent."

In the 21st century, though, insulin costs have risen at rates that have alarmed not only patients, but the Federal Trade Commission (FTC).

'Life-and-Death Stakes'

The FTC in June 2022 made what amounts to a public warning for companies involved in the sale of drugs, particularly insulin.

The agency issued a formal policy statement, outlining a plan to ramp up efforts to see if business practices used to boost pharmaceutical prices have crossed into unlawful conduct. In this statement, the FTC highlighted the need to address the cost of insulin, a drug that the agency said is taken by about 8 million people in the United States.

In the statement, the FTC cited research indicating that the wholesale price of insulin nearly tripled between 2009 and 2017, increasing out-of-pocket costs for both insured and uninsured patients.

The FTC described this initiative on drug costs as having "life-and-death stakes." Its statement noted the commission had heard about people skimping and forgoing insulin due to unmanageable costs, leading to illness and even death.

"We live in the wealthiest country in the world. The companies who make insulin, and the middlemen who control our access to insulin, make billions off of it," said FTC Commissioner Alvaro Bedoya. "And yet one in four Americans with diabetes cannot afford the insulin they need. One in four Americans ration their insulin."

The FTC highlighted insulin as a "prominent example of a prescription drug impacted by high rebates and fees" paid to pharmacy benefit managers (PBMs). PBMs can benefit from extracting larger rebates from higher list prices for drugs as well as from keeping lower-cost generic and biosimilar drugs off formularies, FTC commissioners said.

PBMs argue that rebates help consumers by lowering premiums. Members of Congress and researchers have in recent years tried to understand how PBM rebates and interactions between insurers and drug makers may contribute to consumers' struggles to pay for insulin.

Private Health Plans

In 2021, house Democrats tried to create a broad $35 cap on cost sharing for monthly insulin. Private group and individual plans would only have to cover one dosage form (vial, pen) and insulin type (rapid-acting, short-acting, intermediate-acting, and long-acting) for no more than $35, KFF researchers said in a 2021 report.

But that initiative has not made it into law.

So it remains vital for people with diabetes to shop carefully for their health coverage, Claire Sachs, a longtime patient advocate and healthcare experience consultant from Bethesda, Maryland, told Medscape. The daughter of an insurance company executive, Sachs said that she has been managing more than a dozen complicated health conditions, including diabetes, for most of her life. She knows well the ins and outs of healthcare policies.

Yet, even she benefited from checking an agent when shopping for coverage.

"I lucked out, because I found one who was honest," Sachs said. "She pointed out that an insurance agent is asking you questions about your height and weight, they're not dealing in plans that meet the standards of the Affordable Care Act."

The complexity of insulin costs and insulin coverage is something where people need to find their own advisers beyond their physicians' offices, she said.

"Patients would love for doctors to be more aware of what the drugs they prescribe cost. But how do you do that?" Sachs said.

"You may have half a dozen different policies available, and each policy has a different mechanism to cover. You know, tier one, tier two, tier three tier zero medication," Sachs added. "How is the clinician supposed to be able to track all that?"

Kerry Dooley Young is a freelance journalist based in Miami Beach.

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