Seniors reliant on insulin may soon get a break when it comes to out-of-pocket expenses under a new Medicare Part D model that caps insulin costs at a $35 copay for a 30-day supply.
CMS announced the new model March 11. The Part D Senior Savings Model will test an enhanced Part D model and could save seniors who enroll in a plan an average of $446 annually, CMS estimates.
The government is also expected to save under the model––which requires pharmaceutical manufacturers to pay additional coverage gap discounts––generating more than $250 million over five years. The model begins January 1, 2021 through the CMS Innovation Center.
The new model comes at a time when insulin prices have skyrocketed over the last several years. The high out-of-pocket costs have led some diabetics reliant on the medicine to turn to Craigslist. Others have sought out cheaper or older versions, while some are traveling to Canada or even rationing their supplies due to lack of affordability. The rising price of insulin has even caught the attention of Congress.
In response to the growing issue, CVS Health debuted a no-cost insulin program earlier this year. Employers and health plan sponsors participating in the program can offer diabetes medications with no out-of-pocket costs to members. Express Scripts and Cigna also offered an insulin program last year with a $25 monthly cap for out-of-pocket costs.
For seniors on Medicare Part D plans, out-of-pocket costs can fluctuate month to month, according to CMS. Not knowing the cost or facing high costs can cause some seniors to forgo taking their medications, which can set up worse health events down the line. One in three Medicare beneficiaries has diabetes, according to CMS, with more than 3.3 million using one or more types of insulin.
The plan covers rapid-acting, short-acting, intermediate-acting and long-acting insulins from participating manufacturers for the same copay throughout the plan year and through the coverage gap phase, according to CMS.
“The Part D Senior Savings Model provides an innovative market-driven approach that removes barriers to lower insulin costs,” CMS Administrator Seema Verma said in a statement. “We call on health insurance plans and prescription drug manufacturers to take action and provide relief for America’s seniors who take insulin.”
The test model is targeted toward Part D plans that offer “more generous prescription drug coverage than Part D basic benefit designs,” according to CMS. The biggest different of these plans is the cost sharing, which has a fixed price point rather than a percentage of the drug’s cost. For this, seniors typically pay a higher premium, though about 80% of drug plans are enhanced plans. For example, average monthly premiums for an enhanced plan is $49.32, compared to $32.09 for a basic Part D plan.
The model specifically works by waiving a disincentive for Part D sponsors to design a plan that offer supplemental benefits that lower cost sharing in the coverage gap phase for insulin.
“Participating manufacturers will continue to contribute their 70 percent discount on the negotiated price for insulin if marketed by a participating manufacturer, throughout the year starting on January 1, 2021,” the announcement reads. “CMS views this Model as an opportunity for Part D sponsors and manufacturers to partner together to put patients before profits and lower out-of-pocket costs for insulin.”
In announcing the program, CMS released a Request for Application for Part D sponsors and manufacturers.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."