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Lower Out of Pocket Insulin Costs for U.S. Medicare Seniors

Author: Centers for Medicare & Medicaid Services(i) : Contact: www.cms.gov

Published: 2020-05-26 : (Rev. 2020-05-27)

Synopsis and Key Points:

Across America, 88 Part D Sponsors applied to the Part D Senior Savings Model to offer enhanced plans with a maximum $35 copay for a broad set of insulins beginning in 2021.

One in every three Medicare beneficiaries has diabetes, and over 3.3 million Medicare beneficiaries use one or more of the common forms of insulin.

Beneficiaries will be able to enroll during Medicare open enrollment, which is from October 15, 2020 through December 7, 2020, for Part D coverage that begins on January 1, 2021.

Main Digest

Under U.S. President Trump's leadership, the U.S. Centers for Medicare & Medicaid Services (CMS) announced that over 1,750 standalone Medicare Part D prescription drug plans and Medicare Advantage plans with prescription drug coverage have applied to offer lower insulin costs through the Part D Senior Savings Model for the 2021 plan year. Across the nation, participating enhanced Part D prescription drug plans will provide Medicare beneficiaries access to a broad set of insulins at a maximum $35 copay for a month's supply, from the beginning of the year through the Part D coverage gap. The model follows on the Trump Administration's previously announced 13.5 percent decline in the average monthly basic Part D premium since 2017 to the lowest level in seven years.

U.S. President Trumps part D senior savings-model
U.S. President Trumps part D senior savings-model

Currently, Part D sponsors may offer prescription drug plans that provide lower cost-sharing in the coverage gap; however, when they do, the Part D sponsor accrues costs that pharmaceutical manufacturers would normally pay. These costs are then passed on to beneficiaries in the form of higher premiums. The new insulin model directly addresses this disincentive by doing two things:

Under President Trump's leadership, for the first time, CMS is enabling and encouraging Part D plans to offer fixed, predictable copays for beneficiaries rather than leaving seniors paying 25 percent of the drug's cost in the coverage gap. Both manufacturers and Part D sponsors responded to this market-based solution in force and seniors that use insulin will reap the benefits.

U.S. Medicare Part D defined-standard benefit.
U.S. Medicare Part D defined-standard benefit.

Based on CMS's estimates, beneficiaries who use insulin and join a plan participating in the model could see average out-of-pocket savings of $446, or 66 percent, for their insulins, funded in part by manufacturers paying an estimated additional $250 million of discounts over the five years of the model.

With a robust voluntary response from Part D sponsors, CMS anticipates beneficiaries will have Part D plan options in all 50 states, the District of Columbia, and Puerto Rico, through either a standalone prescription drug plan (PDP) or a Medicare Advantage plan with prescription drug coverage.

Beneficiaries will be able to enroll during Medicare open enrollment, which is from October 15, 2020 through December 7, 2020, for Part D coverage that begins on January 1, 2021.

"President Trump has forged partnerships with pharmaceutical manufacturers and plans to deliver lower priced insulin to our nation's seniors," said CMS Administrator Seema Verma. "This market-based solution, in which insulin manufacturers and Part D sponsors compete to provide lower costs and higher quality for patients, will allow seniors to choose a Part D plan that covers their insulin at an average 66 percent lower out-of-pocket cost throughout the year."

U.S. Medicare Part D at a glance infographic.
U.S. Medicare Part D at a glance infographic.

Part D Senior Savings Model

The Part D Senior Savings Model - which was announced on March 11, 2020 - is a voluntary model that tests the impact on insulin access and care by participating Part D enhanced alternative plans offering lower out-of-pocket costs, at a maximum $35 copay for a month's supply, for a broad range of insulins.

Part D sponsors that participate in the model will offer beneficiaries Part D prescription drug plans that provide supplemental benefits for a broad range of insulins, including both pen and vial dosage forms for rapid-acting, short-acting, intermediate-acting, and long-acting insulins. Participating pharmaceutical manufacturers will continue to pay their current 70 percent discount in the coverage gap for their insulins that are included in the model, and based on the model's waiver of current regulations, those manufacturer discount payments will be calculated before the application of supplemental benefits under the model - which will reduce the out-of-pocket cost of insulin for Medicare beneficiaries.

One in every three Medicare beneficiaries has diabetes, and over 3.3 million Medicare beneficiaries use one or more of the common forms of insulin. For some of these beneficiaries, access to insulin is a critical component of their medical management, with gaps in access increasing risk of serious complications, ranging from vision loss to kidney failure to foot ulcers to heart attacks. Unfortunately, the costs of insulin can be a major barrier to appropriate medical management of diabetes.

A beneficiary's out-of-pocket costs for insulin in Medicare's Part D prescription drug benefit can fluctuate from one month to the next, in part due to the different rules applying for each phase of the Part D benefit. This can be challenging for beneficiaries when budgeting for their drug costs. These challenges can in turn lead to beneficiaries not being able to afford their medicine or resorting to medication rationing, resulting in worse health outcomes over time. The model aims to address this with stable, predictable costs for insulin that beneficiaries know up front by staying in or choosing a model-participating plan during open enrollment.

Part D sponsors that applied must submit their calendar year 2021 plan benefits to CMS by June 1, 2020 to designate their participation in the model. CMS anticipates releasing the premiums and costs for specific Medicare health and drug plans for the 2021 calendar year in September 2020, including final information on the model.

Beneficiaries will be able to find a Part D plan participating in the Part D Senior Savings Model in the 2021 plan year through the Medicare Plan Finder on Medicare.gov during the annual open enrollment period, which begins on October 15, 2020 and ends December 7, 2020. CMS will enhance the Medicare Plan Finder to include a filter to identify plans that will offer capped out-of-pocket costs for insulin in the model so beneficiaries can easily find those plans during open enrollment in the Fall. The Medicare Plan Finder, which was upgraded for the first time in a decade last year, is the most used tool on Medicare.gov and allows users to shop and compare Medicare Advantage and Part D plans.

U.S. Medicare Part D Infograpic
U.S. Medicare Part D Infograpic

The Part D Senior Savings Model builds on steps the Trump Administration has already taken to strengthen Medicare and improve the quality of care for patients with diabetes. CMS has taken the following actions to address the needs of beneficiaries with diabetes:

To respond to the coronavirus disease 2019 (COVID-19) public health emergency, CMS has taken additional actions to ensure that beneficiaries with diabetes have access to treatment and care by:

Sources:

(i)Source/Reference: Centers for Medicare & Medicaid Services. Disabled World makes no warranties or representations in connection therewith. Content may have been edited for style, clarity or length.

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