Insulin Out-of-Pocket Costs in Medicare Part D

Addressing the cost of insulin continues to be at the forefront of policy discussions around prescription drugs. To inform these discussions, this analysis updates prior work from KFF on out-of-pocket spending on insulin products by Medicare beneficiaries enrolled in Part D drug plans, along with state-level use and spending data, based on prescription drug event claims data through 2019 from the Centers for Medicare & Medicaid Services (CMS) Chronic Conditions Data Warehouse. Available claims data predate the 2021 introduction of the CMS Part D Senior Savings Model in which enhanced Part D drug plans charge a monthly copayment of no more than $35 for selected insulin products. Therefore, this analysis does not reflect any potential cost savings for Part D enrollees who have enrolled in these plans since 2021.

In the aggregate, Part D enrollees spent nearly $1 billion out of pocket on insulin in 2019, four times the amount spent in 2007

Aggregate out-of-pocket spending by people with Medicare Part D for insulin products quadrupled between 2007 to 2019, increasing from $236 million to $923 million (Figure 1). The number of Medicare Part D enrollees using insulin doubled over these years, from 1.6 million to 3.2 million beneficiaries, which indicates that the increase in aggregate out-of-pocket spending was not solely a function of more Medicare beneficiaries using insulin.

Between 2018 and 2019, aggregate out-of-pocket spending on insulin fell by 9%, reflecting both lower average out-of-pocket spending per prescription for certain insulin products, as well as increased availability and use of lower-cost insulin products.

Among insulin users, Part D enrollees without low-income subsidies spent $520 per person for insulin in 2019, on average, but a small share of insulin users spent considerably more

Among insulin users without Part D low-income subsidies (LIS), average annual out-of-pocket spending on insulin per user increased by 60% between 2007 and 2019, from $324 to $520 (Figure 2; see Table 1 for 2019 insulin use and spending by state)—but spending in 2019 was down 11% from 2018. Average annual growth in out-of-pocket costs over these years was 4%, which exceeded the 1.8% average annual rate of growth in inflation over these same years.

Some Part D insulin users spent considerably more than the average. For example, 10% of non-LIS insulin users spent more than $1,200 on insulin in 2019 and 1% spent close to $2,100 (Figure 3). Higher-than-average out-of-pocket spending is due to a greater number of prescription fills for insulin products and higher out-of-pocket costs per insulin prescription. In other words, taking more than one insulin product and taking more expensive formulations leads to higher out-of-pocket costs.

Average out-of-pocket spending per insulin prescription was $49 in 2019, but spending on many insulin products was higher

Among Medicare Part D insulin users who do not receive low-income subsidies, average out-of-pocket costs per prescription across all insulin products was $49 in 2019, an increase of 28% since 2007 (but a reduction of 13% from the average out-of-pocket cost per insulin prescription in 2018). Among all insulin products available in 2019, out-of-pocket spending per prescription by non-LIS Part D enrollees ranged from $17 for Humulin N, an intermediate-acting insulin, to $108 for Humulin R U-500, a short-acting concentrated insulin.

If insulin copays were capped at $35, Part D enrollees would save 29% on average, based on spending of $49 per prescription in 2019

Policymakers have introduced proposals to cap monthly copayments for insulin products, building on the Part D insulin model. For example, a proposal included in the Build Back Better Act and in separate stand-alone legislation would require all Medicare Part D plans and private group or individual health plans to charge patient cost sharing of no more than $35 per month for insulin products. If a $35 monthly copay cap for all insulin products had been in place in 2019, Part D enrollees without low-income subsidies would have saved $14 per insulin prescription, on average—a reduction of 29% based on average out-of-pocket costs of $49 per insulin prescription in 2019.

Under the current Part D insulin model, participating plans are not required to cover all insulin products at the $35 monthly copayment amount, just one of each dosage form (vial, pen) and insulin type (rapid-acting, short-acting, intermediate-acting, and long-acting). Absent a requirement to cover all insulin products at no more than a $35 copay, insulin users might need to switch from one insulin product to another to save on their out-of-pocket costs, or switch to a plan that covers their insulin product at the $35 copayment.

This work was supported in part by Arnold Ventures. We value our funders. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.

Juliette Cubanski is with KFF. Anthony Damico is an independent consultant.

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