Researchers at the Johns Hopkins Bloomberg School of Public Health announced on March 19 that federal caps on insulin costs have significantly reduced out-of-pocket expenses for Medicare Part D beneficiaries. The findings, published in JAMA, show that after the Inflation Reduction Act of 2022 mandated a $35 monthly cap starting January 1, 2023, more patients are paying less for their insulin.
This development is important because it addresses the affordability and accessibility of insulin for millions of Americans with diabetes who rely on Medicare. Insulin is essential for treating both type 1 and type 2 diabetes, and high costs have been a barrier for many patients.
The study analyzed claims data from nearly 3.8 million Medicare patients who used insulin between 2019 and 2023. The percentage of these patients paying $35 or less per month increased from 48% in 2019 to 75% in 2023. During this period, the average out-of-pocket cost dropped from $50.87 to $21.98, with decreases seen in every state.
"This is compelling evidence that Medicare policies in recent years have done what they were meant to do-improve insulin access and affordability," said Michael Fang, PhD, MHS, assistant professor at the Bloomberg School's Department of Epidemiology. "Insulin costs are now at historically low levels for people on Medicare."
However, about one-quarter of beneficiaries still paid more than $35 per month in 2023. The researchers found this was often due to prescriptions not being prorated according to the new law's limits. Fang explained that current guidance allows health plans to round up partial-month prescriptions: "If the prescription falls in between, the patient can be charged up to the next full multiple of a month... For example, health plans can treat a 45-day supply the same as a 60-day supply and charge up to $70." He also noted variations by state may reflect differences in how insurance plans handle pro-rating.
The research team is now examining how these prorating practices affect average costs across different plans and whether further policy changes could help close remaining gaps.
