Medicare Advantage, Part D Plans Join CMS to Cut Insulin Costs

More than 1,750 Medicare Advantage and Medicare Part D plans will participate in the Part D Senior Savings Model in order to offer lower insulin costs in 2021, CMS announced.

“President Trump has forged partnerships with pharmaceutical manufacturers and plans to deliver lower priced insulin to our nation’s seniors,” said CMS Administrator Seema Verma. “This market-based solution, in which insulin manufacturers and Part D sponsors compete to provide lower costs and higher quality for patients, will allow seniors to choose a Part D plan that covers their insulin at an average 66 percent lower out-of-pocket cost throughout the year.”

The plans offer a range of insulin brand options with the maximum copay set at $35 for one month of insulin supplies.

Based on the Medicare Advantage and Part D plan overall response, CMS projected that beneficiaries in every state, the District of Columbia, and Puerto Rico would have access to a participating Part D plan in 2021.

The plans have until June 1, 2020 to apply for participation in the model and premium, cost information, and final model information will be released in September 2020.

CMS intends to make it easier for beneficiaries to find participating plans by adding a Part D Senior Savings Model filter on Medicare Plan Finder, which was overhauled for the first time in a decade last year.

The Part D Senior Savings Model came out in March 2020 in response to the coronavirus outbreak. It established a fixed monthly copay for the coverage gap phase of Medicare coverage.

Previously, Medicare beneficiaries were at risk of falling into a coverage gap once their costs surpassed their deductible and initial coverage. In the coverage gap, also called the “donut hole,” pharmaceutical manufacturers received a 70 percent discount. Members would have to pay around 25 percent of expenses in out-of-pocket healthcare spending and the actual dollar value could vary widely causing budgeting uncertainties for beneficiaries.

The Part D Senior Savings Model seeks to align incentives for the pharmaceutical manufacturers and Part D plan sponsors to diminish and normalize costs for beneficiaries.

Pharmaceutical manufacturers still get the coverage gap 70 percent discount for the insulin, regardless of how the plan handles copays. However, plans cannot raise member cost-sharing above $35 for a month’s supply of insulin.

“Both manufacturers and Part D sponsors responded to this market-based solution in force and seniors that use insulin will reap the benefits,” said the press release.

America’s Health Insurance Plans (AHIP) praised the move.

“Innovative voluntary programs like this Part D Senior Savings Model are an excellent example of public-private partnerships where everyone wins, but especially patients,” wrote Matt Eyles, president and chief executive officer of AHIP.

“This program builds on steps the Administration has already taken to empower Medicare Advantage plans to provide additional supplemental benefits for diabetic patients. We are proud to work together to support this bold initiative to sustainably improve the affordability of insulin for seniors and people with disabilities.”

Three pharmaceutical manufacturers had agreed to participate as of March 23, 2020, offering around 60 insulin options.

A number of payers have independently pushed insulin prices lower for different member populations since mid-2019.

In August 2019, Blue Cross Blue Shield of Minnesota announced that it would begin offering insulin at a $0 copay in 2020. The deduction included both Tier 1 and Tier 2 insulins for commercial, fully-insured plans.

Cigna and Express Scripts brought a month’s supply of insulin down to a $25 copay for members in participating non-government funded pharmacy plans, whether Cigna or a different payer.

UPMC for Life gave members access to three months of insulin for $20. UPMC stated that members could save over $300 as a result of this move.