In the midst of one of the worst public health crises in history, a record number of Americans are without health insurance.
The Senate’s recent inflation-reduction bill would cap insulin for Medicare beneficiaries at $35 a month.
But according to new research from Yale University, it’s expected to curb insulin prices for a broader group of diabetics, of whom about 7.9 million are insulin-dependent.
The cost of insulin can financially ruin diabetics.
Yale research found that 14% of people in the US who use insulin experience “catastrophic” treatment expenses. When general room and board expenses are deducted from their income, at least 40% of the remaining money goes towards paying for insulin.
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According to Bailey Bakkila, a senior researcher on the Yale School of Medicine team, 1 in 5 Medicare beneficiaries who use insulin achieve catastrophic spending. Additionally, these Medicare patients account for more than half of the individuals who fall into the catastrophic spend category identified in the study.
According to the Centers for Medicare and Medicaid Services, one in three Medicare beneficiaries has diabetes, and more than 3.3 million beneficiaries use insulin.
Bakkila said the law would affect a large portion of this patient population.
The Senate bill was praised by high-level interest groups, including the AARP.
“This has a really tangible immediate impact for people who spend a lot of money on insulin, and it’s a life-saving drug,” said Leigh Purvis, director of health care costs and access at AARP.
“Adding this co-payment cap is really important for people who need these drugs to survive,” she said.
Why more patients were not included on insulin
However, the law excludes certain patient groups who can also afford the additional cost of insulin, including those with private insurance. Although they make up a smaller portion of those who experience catastrophic insulin expenses than Medicare beneficiaries, they spend more on insulin than other insured groups, according to Bakkilla.
People who pay for insulin out of pocket—either because they don’t have insurance or are covered by high-deductible health plans—pay the most and have high levels of catastrophic expenses.
The Senate bill also aimed to cap the price of insulin at $35 per month for those who are privately insured. However, this part of the proposal fell through in last-minute talks.
The Senate bill was the culmination of many, many years of public support for doing something about drug prices.
Executive Director of the Program on Medicare Policy at the Kaiser Family Foundation
Democrats prosecute the law with a simple majority known as arbitration. In that process, the Senate legislature ruled that the insulin proposal for non-medical recipients violated Byrd’s rule, meaning it was a political issue with no federal budget implications and therefore ineligible for inclusion. Is.
Democratic leaders attempted to abandon this agreement, but needed 60 votes to succeed. While seven Republicans voted in favor of the measure, it fell short of the required number of votes by 57.
“It provided an opportunity for some of the people out there to point out the vote and say, ‘I’ve decided to provide an insulin cap for everyone, not just Medicare recipients. Voted in favor,” said senior vice president Bill Hoagland. President of the Bipartisan Policy Center.
How Much Money Can Medicare Beneficiaries Save?
The Senate bill includes notable changes that would also help Medicare beneficiaries save money on prescription drugs in other ways.
Medicare can now negotiate prices for prescription drugs. Medicare Part D expenses are also capped at $2,000 annually.
“Of all the provisions, I think this is by far the most important,” said Andrew Mulcahy, chief health economist at RAND Corporation, of the $2,000 annual cap for Medicare beneficiaries.
“Basically, anyone who takes an expensive drug is going to hit the $2,000 mark at some point during the year,” he said.
Experts say it took years to make these changes. Medicare Part D, introduced by legislation passed in 2003, has never had out-of-pocket spending limits.
“The Senate bill was the culmination of longstanding public support for drug pricing and drug cost concerns,” said Tricia Newman, executive director of the Medicare policy program at the Kaiser Family Foundation (KFF).
More needs to be done to contain costs for diabetics, particularly those who qualify for Medicare by age 65, experts say.
According to an analysis by the KFF, capping insulin costs to $35 per month for privately insured patients can help save at least $42 per month who currently pay more than $35. While half of those would save at least $19 a month.
Lowering the price of insulin could also help bring those costs in line with the rest of the world.
According to RAND’s 2020 study, insulin manufacturers’ prices were higher in the US than in any of the 32 other high-income countries. As a result, Americans are likely to pay four times what the average patient pays in other high-income countries, the study found.