Major Savings for Medicare Beneficiaries Thanks to the $35 Cap on Insulin

Strategic Insights -

The $35 monthly cap on insulin for Medicare beneficiaries, enacted through the Inflation Reduction Act, has resulted in significant savings for millions of Americans. According to a new report from the U.S. Department of Health and Human Services (HHS), if the cap had been in place in 2020, 1.5 million seniors across the country would have saved an average of $500 on insulin for the year. The report highlights the major benefits of the new law, including increased access to affordable healthcare and reduced healthcare costs.

Key Takeaways:

  • The report shows that if the Inflation Reduction Act's provision capping the cost of insulin at $35 for a month's supply for Medicare beneficiaries had been in place in 2020, 1.5 million seniors across the country would have saved an average of $500 on insulin for the year.
  • Researchers estimate that 1.5 million people with Medicare would have benefited from the new Inflation Reduction Act insulin cost-sharing limits if they had been in effect in 2020, with total savings to beneficiaries of about $734 million in Part D and $27 million in Part B.
  • In 2019, about 37 percent of insulin fills for people with Medicare required cost-sharing exceeded $35 per fill, including 24 percent that exceeded $70 per fill.
  • Nationally, the average out-of-pocket cost was $58 per insulin fill in 2019, typically for a 30-day supply.
  • Patients with private insurance or Medicare paid about $63 per fill on average.
  • The states with the most people with Medicare projected to benefit from the new Inflation Reduction Act insulin cost savings are Texas (114,000 beneficiaries), California (108,000), and Florida (90,000).
  • North Dakota ($805), Iowa ($725), and South Dakota ($725) have the highest average annual out-of-pocket savings.
  • The new Inflation Reduction Act insulin cost savings will be available to 1.5 million people with Medicare starting July 1, 2023, under Medicare Part B.

Statistics:

  • 1.5 million seniors across the country would have saved an average of $500 on insulin for the year if the cap had been in place in 2020.
  • 1.5 million people with Medicare would have benefited from the new Inflation Reduction Act insulin cost-sharing limits if they had been in effect in 2020.
  • Total savings to beneficiaries of about $734 million in Part D and $27 million in Part B.
  • 37 percent of insulin fills for people with Medicare required cost-sharing exceeded $35 per fill in 2019.
  • 24 percent of insulin fills for people with Medicare required cost-sharing exceeded $70 per fill in 2019.
  • Average out-of-pocket cost was $58 per insulin fill in 2019.
  • Average cost for patients with private insurance or Medicare was $63 per fill.

Sources:

  • U.S. Department of Health and Human Services
  • HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE)
  • Report to Congress: "Insulin Affordability and the Inflation Reduction Act: Medicare Beneficiary Savings by State and Demographics"
  • ASPE Report: "Insulin Affordability and the Inflation Reduction Act: Medicare Beneficiary Savings by State and Demographics"