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White House Announces in 2021 $35 Max Copay for Medicare Beneficiaries that Use Insulin

The majority of people in the United States diagnosed with diabetes are Medicare beneficiaries. Of the Medicare beneficiaries with diabetes, 3.3 million rely on some form of insulin to manage their disease. Insulin has been the leading treatment for diabetes for 100 years now.

In 1910, a researcher realized one particular pancreatic substance was missing in people with diabetes, and he called it insulin. Eventually, in 1922, the first human received an injection of insulin extracted from cattle. Since then, scientists have developed various forms of insulin, saving millions of people’s lives across the country.

However, as the medical marvel’s popularity and effectiveness grew, so did its price. In 2001, Eli Lilly’s Humalog cost $35 for a one-month supply. By 2019, that same one-month supply cost nearly $300. The Centers for Medicare and Medicaid Services (CMS) are happy to announce that the cost of insulin will soon return to its once low monthly rate for its beneficiaries.

The Part D Senior Savings Model of 2021

As of 2021, Medicare beneficiaries enrolled in a Part D Senior Savings Model plan will spend no more than $35 for their monthly supply of insulin. The Part D Senior Savings Model caps all covered insulin at a $35 max copay. However, Part D plan sponsors have the option to offer even lower copays if they wish.

Part D plan sponsors and drug manufacturers are not required to participate in the Part D Senior Savings Model of 2021. Though, over 1,750 Part D plans agreed to participate. The top three insulin-producing drug manufacturers, Sanofi, Novo Nordisk, and Eli Lilly, have also opted in.

Part D plan sponsor requirements

For a Part D plan to join the new Model, they must meet specific requirements. Model Part D plans must cover both a vial and pen dosage form for each insulin included on the plans’ formulary. All four types of insulin must also be included within the drug formulary – long-acting, short-acting, intermediate-acting, and rapid-acting. If the Part D plan sponsor agrees to these formulary requirements, they can participate in the Part D Senior Savings Model.

By joining the Model, the Part D plan sponsor agrees to a maximum copay of $35 for all covered insulins. This maximum cannot be increased based on brand, type, pharmacy, or plan stage. Basically, $35 is the maximum a 30-day supply of insulin can cost under a Model Part D plan no matter what.

Drug manufacturer requirements

For a drug manufacturer to join the new Model, they must agree to offer all of their insulin products to the Part D plan sponsors as part of the Part D Senior Savings Model. Drug manufacturers participating in the Model can’t choose to exclude any insulin product from the Model.

Potential savings under the Part D Senior Savings Model

According to the Kaiser Family Foundation (KFF), on average, Medicare beneficiaries pay nearly $4,000 a year on insulin[1]. Under the new savings Model, Medicare beneficiaries will pay $420 or less a year on insulin. That’s almost a 90% discount.

One of the biggest benefits of the new Model is the stability of the lower copay. Instead of paying fluctuating copays throughout the year for their insulin, Medicare beneficiaries will pay the same lower copay all year long. For example, in 2020, a Part D enrollee pays no more than 25% for their insulin prescription during the coverage gap. For an insulin prescription that costs $300, that’s a $75 copay. In 2021, that copay will be cut in half.

Enrolling in a Part D Senior Savings Model plan

CMS expects that there will be Part D Senior Savings Model plans available in all states and Puerto Rico. The available Model plans will either be in the form of a standalone Part D drug plan or included in a Medicare Advantage plan.

The soonest a Medicare beneficiary can apply for a Part D Senior Savings Model plan is during the Annual Election Period that starts on October 15, 2020. However, Model plan information will be available as early as September. Model plans purchased between October 15, 2020, and December 7, 2020, will be effective on January 1, 2021.

Medicare beneficiaries can use the Medicare Plan Finder Tool to browse available Model plans in their area prior to enrolling. Once enrolled, beneficiaries can kick back and wait for their savings to start rolling in.

[1] https://www.kff.org/medicare/issue-brief/how-much-does-medicare-spend-on-insulin/