Medicare insulin cap lowers out-of-pocket costs and boosts usage

The Inflation Reduction Act's attempt to improve insulin costs for Medicare beneficiaries-by capping out-of-pocket costs at $35-was associated with lower out-of-pocket costs and increased insulin usage, but only for a small portion of U.S. patients, according to a new study published in JAMA on Saturday.

In an analysis of the insulin costs and use since cap took effect in 2023, researchers from Emory University, University of Southern California, and University of Wisconsin-Madison compared the before and after out-of-post cost per 30-day insulin supply, 30-day insulin fills, adherence, and persistence of the more than 2.8 million Medicare Part D beneficiaries using insulin. 

Key findings

• The cap was associated with lower and more stable insulin out-of-pocket costs; previously, insulin out-of-pocket costs could double for some patients within a calendar year
• The out-of-pocket insulin cost for the entire study cohort declined by about $5 per 30-day supply or about 21%
• For people with high pre-policy insulin costs (at least $58 per 30-day supply, a group of about 250,000 people) fills increased by 8% and proportion of days covered increased by 5%
• Medicare Part D beneficiaries are already a well-insured group. Only 13% of insulin fills would have exceeded the cap in 2021-2022, and most insulin users already benefitted from other affordability programs, such as Medicare's Senior Savings Model or Low-Income Subsidy Program
• People who benefitted most from this cap were disproportionately non-Hispanic white, male, ages 65-75, had fee-for-service insurance, and were less likely to live in an urban area

Why this matters

When insulin users skip prescribed doses to save money, it can put patients with diabetes at risk of avoidable and potentially life-threatening adverse health outcomes.

The findings of this study-which was funded by a National Institute of Diabetes and Digestive and Kidney Diseases grant-suggest the importance of further policies to boost insulin affordability. According to data released by The IQVIA Institute, a universal $35 cap on all insulin prescriptions would have saved insulin users in the United States $170 million in out-of-pocket costs in 2024.

What the experts say

Insulin users who previously faced high insulin costs improved their adherence to insulin after the cap, suggesting they had been skipping doses to save money. However, many Medicare patients already paid low prices. Future out-of-pocket caps will have the largest impact if they can target patients facing high out-of-pocket costs, such as people who are uninsured."

Rebecca Myerson, PhD, associate professor of health policy and management, Emory University's Rollins School of Public Health

"Making sure patients take their medication should be a greater clinical priority. This research demonstrates a powerful policy lever for doing so: reducing their out-of-pocket costs," says co-author Dana Goldman, PhD, founding director of the USC Schaeffer Institute for Public Policy & Government Service.