Medicare Insulin Trial Program

It’s no secret that drug costs have been steadily rising in the US for decades. In fact, a recent Kaiser Family Foundation poll found that nearly 1 in 4 Americans say it’s difficult to afford their medications. Insulin is no exception. 

Insulin costs in particular have risen dramatically with reports showing a 1000%+ price increase over a 20-30 year period. Stories like these are plentiful and regular in the news circuit and finally, there seems to be some good news. For the first time, Medicare is running an “Insulin Trial Program” for covered insulins in the year 2021.

So, what is the “Insulin Trial Program?” In short, this is a test period where if you take insulin and the insulin is covered by either your Medicare Advantage (Part C) or standalone Medicare Drug Plan (Part D) then the price is capped at a $35 copay all year long. That means, no deductibles and no donut hole for your covered insulin. This is a major change to how insulin, a life saving drug, has been covered by Medicare in the past. 

Most Medicare drug plans have a deductible for drugs that fall under Tiers 3, 4 and 5 (essentially brand name, and specialty drugs). Insulin is almost always considered a Tier 3 drug. We’ll use an example of a plan with a $400 deductible. In years past if you had this plan, that means you would have to pay $400 out of pocket for your insulin before the plan would pay anything towards it. For people with limited incomes in retirement, that is an astounding amount of money to pay for a medication that you need to survive. 

On top of that, Medicare uses a dated insurance model (corridor insurance) referred to as the “Donut Hole” or “Coverage Gap”. To keep it simple, Medicare will only cover the costs of your Medications up to a certain level ($4130 in 2021). When calculating the $4130 Medicare counts both your out of pocket costs along with the full retail cost of the drug. 

For example: If you paid a $43 copay for a drug that costs $400 full retail, $443 is the amount counted towards your $4130 coverage limit. If you take multiple high retail cost medications, you reach that amount quickly.

When you hit the donut hole, you pay 25% of the full retail cost. In the example of a drug that costs $400 full retail, this means you now pay $100/month for that same medication that was only $43 earlier in the year. 

With the Insulin Trial Program now in place, it simplifies this entire process by capping all covered insulins at $35 all year long.

Unfortunately, this only applies to insulin specifically. If you take diabetes medication that is not considered insulin, you will still be subject to your specific plans cost sharing amounts (deductibles, copays etc). 

This is certainly a step in the right direction and something tangible that will have a positive impact on many people's lives and wallets. There are still many things that can be improved and changed when it comes to drug prices. If you have an idea of ways that the system can be improved, we want to know about it. Please leave a comment or send us a message, we’d love to hear from you.

If you are looking to get started on Medicare yourself or want help navigating the different plans and coverages available, our team of experts is happy to help. Please feel free to call us at 401-404-7373 or reach out via email to help@doctorschoiceusa.com. Thank you!