What You Need To Know

President/CEO at Healthcare Solutions Direct, LLC, a nationwide insurance agency focused primarily on the retiree health market

Making a big stride in the cost of ongoing medical care for diabetics, Medicare has worked to establish an insulin price cap. Going into effect in 2021, a $35 copay for insulin may help save Medicare patients up to 66% per year in medication costs.

However, getting these savings is not automatic. It is yet another Medicare benefit to opt into. This means that beneficiaries who require insulin need to pay close attention to their health benefits. You can make necessary changes during the Medicare open enrollment period, which takes place between October 15 and December 7 each year.

Adding to the complications of this cost-saving benefit, this change can impact two areas in the Medicare coverage system. Prescription-focused Part D is usually where you find coverage related to insulin. But Medicare Part B can also include insulin coverage if it is used in conjunction with an insulin pump. Add to that the variety of plans under Medicare Part D, and there is a substantial risk you could miss out on the insulin cap.

To help add some clarity, the Centers for Medicare & Medicaid Services (CMS) announced the creation of the Part D Senior Savings Model, which will increase access to the insulin cap. Three pharmaceutical manufacturers have opted in to the senior savings model: Eli Lilly and Company, Novo Nordisk, Inc. and Novo Nordisk Pharma, Inc., and Sanofi-Aventis U.S. LLC. Seventy-six part D sponsors agreed to take part. It may sound like a small amount of buy-in, but this leaves seniors with more than 1,600 different drug coverage options. It is important to pick one that provides you with the insulin cap and gives you savings for any other medications you regularly need.

People will need to choose a new, enhanced plan of coverage to access the savings associated with the insulin cap. This means that stand-alone prescription drug plans and Medicare Advantage plans with drug coverage may all fit into the Senior Savings Model.

Where you will not find the insulin cap is in more basic Medicare plans. These typically do not include extensive coverage or easy access to prescription savings. While they will have a lower premium, they are not always the most cost-effective choice. This is especially true if you take maintenance medications or have a chronic condition. Your insurance agent can explain this to you as they help you find the right plan for your specific health needs.

With a plan inclusive of the insulin cap, patients can save within every stage of Part D coverage. Even if they have not hit their annual deductible yet, patients will not have to pay more than the $35 cap for insulin. If they hit the coverage gap stage, where they must pay 25% of a medication’s price, they will still only have to pay $35 for insulin.

According to CMS, a third of Medicare beneficiaries have diabetes, which means that more than 3.3 million beneficiaries use insulin. That is why having the right plan to cap their copay on insulin means so much. Price is no longer a barrier to properly managing this chronic disease. Patients no longer need to ration their insulin, sometimes depriving themselves of necessary treatment. It also means insulin users could save an average of $446 in annual out-of-pocket costs for the medication.

Knowing the potential savings available to those with diabetes and opting into an enhanced plan with the insulin cap might be worthwhile. Even if it means paying a slightly higher premium, the long-term savings are hard to overlook.

Deciding which prescription plan is right for you can feel even more complicated with this new information. This is why it can help to talk to someone with a firm grasp on the minutiae of Medicare. A qualified Medicare insurance agent can be a helpful resource even if you are only trying to decide between a few coverage plans. They may be able to help you narrow your choices and ensure you pick coverage that includes the insulin cap.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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