Copays on Insulin

Diabetes kills around 80,000 people every year, according to the Centers for Disease Control and Prevention (CDC). However, that number is suspected to be under-reported. Some fatal diabetic complications include heart attack, stroke, and kidney failure. Other non-fatal complications include complete or partial vision loss and limb amputations. In fact, there are almost as many limb amputations due to diabetes as there are deaths. 

While vision loss, limb amputations, and death can occur for various reasons, an appropriate insulin routine could help prevent each. Unfortunately, many people with diabetes aren’t able to afford their monthly insulin prescription due to high costs. The average Medicare beneficiary pays nearly $700 a year for insulin, with 25% of them paying $1,500 or more. 

However, last month, the White House announced a $35 maximum monthly copay on insulin for Medicare beneficiaries. This new program that will start at the beginning of 2021 is called the Part D Senior Savings Model.

How the Part D Senior Savings Model will work

Medicare Part D plans have four payment phases where drug costs vary by each stage. Under the Part D Senior Savings Model, insulin costs will remain the same throughout each stage, instead of fluctuating as they do now. For example, instead of paying $435 for insulin in the deductible stage, $100 in the initial coverage stage, and $125 in the coverage gap, beneficiaries will pay no more than $35 in all phases.

Many Medicare beneficiaries have already asked how this is possible. Over 1,700 Medicare plan carriers have agreed to offer lower insulin copays by planning to cover a larger portion of the drug cost. For example, for a $500 vial of insulin, a Part D plan carrier currently pays about $25 during the coverage gap. However, under the Part D Senior Savings Model, carriers will pay about $115 for a $500 vial of insulin. 

Part D plan carriers and drug manufacturers aren’t required to participate in the new Model. However, 88 Medicare plan carriers have already applied, and the three-top insulin drug manufacturers, Eli Lilly, Novo Nordisk, and Sanofi, plan to participate. 

Part B insulin vs. Part D inulin

The main ways diabetics can receive their insulin is by injection, inhaler, and pump. How a Medicare beneficiary receives his or her insulin will dictate which part of Medicare covers the drug. Injectable and inhaled insulin are covered under Part D, while Part B covers insulin used in an infusion pump. 

Medicare beneficiaries who receive their insulin under Part B will not benefit from the Part D Senior Savings Model. However, many Medicare beneficiaries supplement their Medicare with a Medigap plan, such as Plan G. With Part B and Plan G, Medicare beneficiaries who receive their insulin through a pump already have little to no out-of-pocket costs for their insulin.

How to apply for a Part D Senior Savings Model plan

The official enhanced plans participating in the Part D Senior Savings Model will be announced in September later this year. By the start of the Annual Election Period, Medicare beneficiaries will be able to research and compare the enhanced plans. However, according to CMS administrator, Seema Verma, most Medicare beneficiaries are already enrolled in one of the 1,700+ improved plans.

However, those who wish to switch to a Part D Senior Savings Model plan can do so between October 15th and December 7th. Plan changes will be effective on January 1, 2021. 

Medicare has plans to update the Medicare Plan Finder Tool on its website that allows beneficiaries to compare Part D plans from each carrier in their area. The tool will have an added feature that will let beneficiaries weed out any non-Model plans. Insulin-dependent Medicare beneficiaries should take advantage of the Annual Election Period so they can access their savings as soon as possible.

By Caitlyn

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