Beneficiaries who use insulin and join a plan participating in the voluntary model, beginning January 2021, could see average out-of-pocket savings of $446.
Insulin copays for beneficiaries in Medicare Part D drug plans could max out at $35 a month in 2021 under a voluntary model unveiled Tuesday by the Centers for Medicare & Medicaid Services.
Under existing regulations, Part D drug plans can offer lower cost-sharing in the coverage gap. When they do, however, the Part D plan accrues costs that drug makers pay. Those costs are passed on to beneficiaries in the form of higher premiums.
As a result, seniors are often left paying 25% of the insulin's cost in the coverage gap.
The new insulin model allows drug makers to continue paying their full coverage gap discount for insulin, even when a plan offers lower cost-sharing. However, Part D drug plans, relying on manufacturers' rebates, would agree to lower cost-sharing to no more than $35 for a month's supply for "a broad set of insulins," CMS said.
One-third of Medicare beneficiaries have diabetes, and more than 3.3 million Medicare beneficiaries use common forms of insulin.
CMS estimates that beneficiaries who use insulin and join a plan participating in the model could see average out-of-pocket savings of $446. The model is funded in part by manufacturers paying an estimated additional $250 million of discounts over the five years of the model.
"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% lower out-of-pocket cost throughout the year," CMS Administrator Seema Verma said.
CMS said the voluntary model has received an enthusiastic response from Part D plans, and that beneficiaries will have access to the model in 50 states, the District of Columbia, and Puerto Rico through a stand-along prescription drug plan, or through Medicare Advantage.
The coverage begins on Jan. 1, 2020, and enrollment begins during Medicare open enrollment, which is from October 15 through December 7, 2020.
The model reduces copays for a range of insulins, including both pen and vial dosage forms for rapid-acting, short-acting, intermediate-acting, and long-acting insulins.
Participating drug makers will continue to pay their 70% discount in the coverage gap for their insulins that are included in the model. Those discounts will be calculated before the application of supplemental benefits under the model – which will reduce the out-of-pocket cost of insulin for Medicare beneficiaries.
Part D sponsors must submit their calendar year 2021 plan benefits to CMS by June 1 2020.
CMS will release premiums and costs for specific Medicare health and drug plans for the 2021 calendar year in September 2020, including final information on the model.
“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% lower out-of-pocket cost throughout the year.”
CMS Administrator Seema Verma
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
The model is funded in part by manufacturers paying an estimated additional $250 million of discounts over five years.
Beneficiaries will have access to the model in 50 states, the District of Columbia, and Puerto Rico through a stand-along prescription drug plan, or through Medicare Advantage.
One-third of Medicare beneficiaries have diabetes, and more than 3.3 million Medicare beneficiaries use common forms of insulin.