Trends in Insulin Out-of-Pocket Costs Among US Medicare Beneficiaries

Abstract

This study reports decreasing out-of-pocket costs for insulin among Medicare beneficiaries not receiving the low-income subsidy and examines the distribution of costs by state from 2019 through 2023.

In 2021, the Centers for Medicare & Medicaid Services (CMS) introduced the Senior Savings Model, a voluntary program capping the out-of-pocket (OOP) cost of insulin at $35 per month for a subset of Medicare Advantage and stand-alone Plan D plans. On January 1, 2023, the landmark Inflation Reduction Act expanded the $35 per 30-day OOP limit to all Medicare beneficiaries enrolled in Part D. Both measures were expected to substantially improve insulin affordability, especially for those not receiving the low-income subsidy.^1,2 Contemporary population-level data evaluating changes in insulin OOP costs are lacking.^3,4 The objective of this study was to describe recent trends in insulin OOP costs among Medicare beneficiaries not receiving the low-income subsidy.

Methods

Using 100% Medicare Part D prescription drug claims from 2019 to 2023, we created 5 annual cohorts (eMethods in Supplement 1). Each cohort included Part D beneficiaries not receiving the low-income subsidy with at least 1 claim for insulin during the calendar year (eTable in Supplement 1). We followed the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guideline. Johns Hopkins Bloomberg School of Public Health Institutional Review Board approved the study and waived informed consent because all data were deidentified.

The primary outcome was the OOP cost for a 30-day–equivalent supply of insulin. For each year, we calculated each beneficiary’s total OOP cost for insulin divided by the total number of days supplied. We multiplied this figure by 30 to calculate the OOP cost for a 30-day supply for each year. OOP costs were adjusted for inflation to annual prices in 2023 using the Consumer Price Index.

We characterized changes in the mean and distribution of OOP costs for a 30-day equivalent supply of insulin overall and by state of residence. We did not conduct statistical testing or include standard errors because our analyses included the entire population of Medicare beneficiaries not receiving the low-income subsidy with Part D coverage.

Results

There were 3 795 879 Part D beneficiaries not receiving subsidies (mean age, 70.7 years; 48.6% female) with at least 1 insulin claim from 2019 to 2023. During the study period, the percentage of beneficiaries paying $35 or less for a 30-day equivalent supply of insulin increased from 48.0% to 75.0% (Figure 1A). The mean OOP cost for a 30-day equivalent supply of insulin decreased from $50.87 to $21.98 (55.8% relative reduction), with large declines occurring after 2020 (Figure 1B).

Figure 1. Bar and Line Graphs of the Distribution and Mean Out-of-Pocket Costs for 30-Day Supply of Insulin Among Medicare Beneficiaries Not Receiving the Low-Income Subsidy.

All out-of-pocket costs are expressed in 2023 US dollars.

In 2023, the OOP cost for a 30-day equivalent supply exceeded $35 for 25.1% of beneficiaries. These beneficiaries all had at least 1 claim that was not prorated accordingly (eg, paid $70 for a 45-day supply). Among these nonprorated claims, 99.9% were for quantities greater or less than a multiple of 30 days.

The mean OOP cost for a 30-day equivalent supply of insulin decreased in all states during the study period (Figure 2). In 2023, the mean OOP cost for a 30-day equivalent insulin supply ranged from $10.36 (Washington, DC) to $31.09 (Minnesota), with the highest costs in rural Midwest states.

Figure 2. Maps of Mean Out-of-Pocket Costs for 30-Day Supply of Insulin Among Medicare Beneficiaries Not Receiving the Low-Income Subsidy.

All out-of-pocket costs are expressed in 2023 US dollars.

Discussion

From 2019 to 2023, the OOP cost of insulin decreased substantially among Medicare beneficiaries not receiving the low-income subsidy. Beneficiaries currently pay a mean of approximately $22 for a monthly supply of insulin. Insulin costs declined nationwide but remained highest in rural Midwest states.

The finding that approximately 25% of beneficiaries paid more than $35 per 30-day supply in 2023 was unexpected. CMS states that the Inflation Reduction Act OOP limit should be prorated for 60- and 90-day supplies.⁵ However, Part D plans are not required to prorate the Inflation Reduction Act limit for quantities that fall between these 30-day intervals (eg, 45 days). The current analysis suggests that these types of prescriptions were not being consistently prorated, resulting in OOP costs that exceeded $35 per 30 days.

This study had several limitations. The number of days supplied may not reflect the number of days of actual use because insulin dosing can change frequently. OOP costs were calculated from Part D claims, which excludes cash purchases made without insurance. The analysis did not examine whether health plans raised premiums or restricted coverage in response to insulin OOP caps.^2,6

Overall, these results suggest that insulin affordability has substantially improved for Medicare beneficiaries in recent years. Prorating OOP costs to match the Inflation Reduction Act limit for all insulin quantities may further reduce costs to patients.

Supplement 1.

eMethods

eTable 1: List of National Drug Codes used to identify Medicare beneficiaries using insulin

Supplement 2.

Data sharing statement