Impact of Higher Insulin Prices on Out-of-Pocket Costs in Medicare Part D

One in three Medicare beneficiaries have diabetes, and 3.1 million require insulin (1). As insulin prices rise (2), one in four people on insulin report reducing use due to cost (3). Insulin price and affordability concerns the 7 in 10 Medicare beneficiaries with Part D drug coverage, which requires significant deductibles and copayments and places no maximum on out-of-pocket costs (4,5). In particular, Medicare Part D has a coverage gap (doughnut hole) whereby beneficiaries pay a percentage of a drug’s price until reaching catastrophic coverage (4). To lower financial burden, the Affordable Care Act incrementally reduced patients’ cost-sharing during the gap from 100% to 25% of drug price (2010 to 2019) (4). Concurrently, manufacturers had to provide greater price discounts during the gap, reaching a 70% discount by 2019 (4). Although patients now pay a lower percentage of a drug’s price, these savings can be counterbalanced by simultaneous price increases. Patients’ cost-sharing during the gap also uses a drug’s full list price and excludes manufacturer rebates that insulate plans from rising prices (2). We examined how patients’ out-of-pocket costs for insulin would have dropped from 2014 to 2019 due to Part D policy changes and whether higher …