According to the Centers for Medicare and Medicaid Services (CMS), about 5% of Medicare beneficiaries use at least one form of insulin. While that percentage may seem insignificant, that is 3.3 million people who rely on this extremely high-priced drug. The price of a one-month supply of one of the most popular insulin brands has increased by 1,200% since it was first released.
According to GoodRx, retail prices of traditional insulins in 2019 ranged from $92 per vial to $1,813 per vial. Many type 1 diabetics require multiple different forms of insulin to manage their insulin deficiency. Purchasing two vials a month at these prices is out of the question for many Medicare beneficiaries who rely on their Social Security benefits as income.
Diabetic patients are more prone to developing heart disease, kidney failure, and other life-threatening conditions without insulin. With CMS’s new savings model, Medicare beneficiaries no longer must choose between buying their insulin or buying their groceries.
The Part D Senior Savings Model
In May of 2020, CMS revealed a savings model to lower insulin costs for Medicare beneficiaries throughout the country. The Part D Senior Savings Model will provide insulin to Medicare beneficiaries at a maximum of $35 a month beginning January 1, 2021. While Medicare Advantage and Part D plan carriers are required to participate in the Model, 88 carriers have already applied for the new program. These carriers plan to enhance over 1,750 plans to include the supplementary insulin benefits.
Insurance carriers participating in the Part D Senior Savings Model must include both pen and vial options for each type of insulin, such as rapid-acting, long-acting, short-acting, and intermediate-acting. Drug manufacturers participating in the Model, such as Eli Lilly, Novo Nordisk, and Sanofi, must offer all insulin products to the carriers of the enhanced plans to include on their drug formularies. Also, the max copay is the same regardless of the type of pharmacy. Therefore, Medicare beneficiaries will not have to shop prices from one pharmacy to another to find less expensive insulin.
Some fear that the lover insulin copays will result in increased monthly plan premiums. However, CMS actuaries have stated that premium increases will be minimal, only about $1 more a month. CMS will announce the enhanced plans’ new premiums and other plan details in September 2020.
Costs During the Coverage Gap
Medicare Part D coverage has four stages. Medicare beneficiaries’ copays vary depending on which stage they are in, with the coverage gap and deductible stage usually being the most expensive stages. Under the Part D Senior Savings Model, the monthly cost of insulin won’t increase past $35 just because a beneficiary is in the coverage gap.
According to CMS, in 2018, on average, Medicare beneficiaries spent $125 for a 30-day supply of insulin while they were in the coverage gap. In 2021, beneficiaries enrolled in an enhanced Model plan will save nearly $100 a month during the coverage gap.
Enrolling in an Enhanced Model Plan
After enrolling in a Medicare Part D or Medicare Advantage plan, beneficiaries are usually locked in for the calendar year. Most Medicare beneficiaries can’t change Part D and Medicare Advantage plans until the Annual Election Period. The Annual Election Period starts October 15th and ends December 7th. Plans enrolled in during this period begin on January 1st of the following year.
This upcoming Annual Election Period will be the earliest a Medicare beneficiary can enroll in an enhanced Model plan. However, according to CMS administrator, Seema Verma, 25 million Medicare beneficiaries are already enrolled in a Part D plan that will be enhanced by 2021.
Medicare Advantage enrollees have an additional enrollment period in which they can change plans. That period is the Medicare Advantage Open Enrollment Period, which runs from January 1st until March 31st each year. Plans enrolled during this period begin on July 1st.
Medicare’s Plan Finder Tool
To research enhanced Model plans, Medicare beneficiaries can use Medicare’s Plan Finder Tool. CMS plans to add features to the already popular tool that will help beneficiaries compare just Model plans if they wish. However, comparing all the Part D plans in the area and sorting them with the most cost-effective plan listed first will ensure the beneficiaries choose the plan offering the most savings.
With the average Social Security benefit check being around $1,400, CMS should look into other ways to lower costs of other expensive commonly used drugs among seniors. Medicare beneficiaries should not have to choose between what groceries they buy and the medicine that keeps them alive and well.
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