How Insulin Costs Vary Across Medicare, Medicaid, Private Plans, Uninsurance

Insulin costs vary based on insurance coverage type and coverage types that lead to high healthcare spending can force patients to ration their insulin supplies, a report from the US Department of Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE) uncovered.

Healthcare spending for individuals who have diabetes—including diabetes treatment, comorbidities, preventive care, and more—amounted to approximately $446 billion total in 2019. Drug costs, including spending on insulin, were responsible for nearly a third of that amount (32 percent).

Insulin users, who tend to be in a more severe stage of the disease, contributed 46 percent of the healthcare spending total among patients with diabetes. Average healthcare spending across the population of insulin users is 4.3 times higher than for non-institutionalized Americans.

The cost of insulin was one of the drivers of high spending among diabetes patients in more advanced stages of the disease. Insulin costs amounted to a fifth of total healthcare spending for insulin users and half of insulin users' out-of-pocket spending. The average cost per insulin user was $434 annually, but almost a fifth of insulin users had zero out-of-pocket costs (19.4 percent).

A little less than two-thirds of 30-day insulin fills required some amount of cost-sharing (63.5 percent), with nearly a third requiring more than $35 in cost-sharing (31.5 percent) and almost a fifth requiring more than $70 in cost-sharing (19.8 percent).

Medicare beneficiaries had the highest total out-of-pocket healthcare spending for the drug when compared to privately insured and uninsured individuals’ costs. Medicaid out-of-pocket healthcare spending on insulin was low and hard to estimate.

Most insulin users have either Medicare coverage (52 percent) or private insurance (33 percent). The remainder was covered by Medicaid or reported being uninsured.

Despite making up only 12 percent of insulin users, Medicaid beneficiaries were most protected from high out-of-pocket costs. On the opposite end of the spectrum, the uninsured population was most vulnerable to out-of-pocket healthcare spending.

While only a little more than two percent of the insulin-using population were uninsured, the researchers found that a larger share of participants had been uninsured at for at least a month at some point during 2019 (7.2 percent).

Out-of-pocket costs for insulin can also vary based on the type of pharmacy patients use. Across retail, mail, and online pharmacies in 2019, half of all 30-day insulin refills cost patients $9 or less in out-of-pocket spending. Uninsured individuals saw average out-of-pocket costs for a 30-day refill that were twice the average insured individual’s costs.

“Out-of-pocket costs for uninsured patients would likely have been greater if not for charities, safety net providers, programs with limited benefits, and manufacturer programs and coupons,” the researchers noted.

The report also found that insulin costs impacted insulin adherence. High costs forced 17 percent of insulin users to ration their insulin supplies in 2021. Uninsured individuals (29.2 percent) and privately insured individuals (18.8 percent) were most likely to ration their insulin supplies.

There was also a strong tie between insulin adherence and social determinants of health barriers. Patients with social determinants of health barriers such as housing instability or food insecurity often struggled to afford insulin.

Federal and state initiatives as well as patient assistance programs and insulin caps by private entities have all attempted to lower cost barriers to insulin. Payers like UnitedHealthcare and Blue Cross Blue Shield Association have introduced cost-lowering programs for their own members. However, no solution has effectively reshaped this issue on a national scale.

“More than half of U.S. insulin users are Medicare beneficiaries.  These Medicare beneficiaries may benefit from the Inflation Reduction Act provisions that take effect in 2023, which aim to reduce out-of-pocket spending for Part D and Part B enrollees through a number of provisions, such as capping monthly cost-sharing at $35 per insulin product and excluding insulin products from the Medicare deductible, in which beneficiaries pay 100 percent of gross drug costs,” the researchers added.