CMS Announces Part D Insulin Cost-Sharing Payment Model

The Centers for Medicare & Medicaid Services (CMS) launched a new voluntary Part D Senior Savings model that will offer plan beneficiaries 30-day supplies of insulin with a maximum $35 copay.

For the more than three million Medicare beneficiaries managing diabetes, the increasingly high costs of insulin create gaps in care that risk potential serious complications. CMS states that this latest decision is part of President Trump’s ongoing initiative to combat barriers to insulin access.

“We call on health insurance plans and prescription drug manufacturers to take action and provide relief for America’s seniors who take insulin,” said CMS Administrator Seema Verma.

The new model, according to the agency’s fact sheet will allow “Part D sponsors, through eligible enhanced alternative plans, to offer a Part D benefit design that includes predictable copays in the deductible, initial coverage, and coverage gap phases by offering supplemental benefits that apply after manufacturers provide a discounted price for a broad range of insulins included in the Model.”

CMS explained that out-of-pocket costs for insulin fluctuate month-to-month mainly due to the complexity of the Part D benefit design so the new model will test a design that includes predicted copays for all types of insulin—short- and long-acting. Participating plans will also be able to reduce cost-sharing beyond current
requirements.

Savings for beneficiaries participating in the model could amount to $446 in annual out-of-pocket costs for insulin, or over 66%, relative to their average cost-sharing for insulin, according to CMS’ statement.

The agency also projected that the new model has the potential to generate over $250 million in savings over 5 years for the federal government, because of the model’s change to pharmaceutical manufacturers’ additional coverage gap discounts.

 “As beneficiaries have more consistent, predictable access to the prescription drugs they need, the model projects that health will improve and total cost of care will decline for our nation’s seniors,” said CMS in its statement.

The program is beginning January 1, 2021. “In exchange for these additional benefits, enhanced plans have slightly higher premiums, which are paid for by beneficiaries or through other means, such as a Medicare Advantage plan,” the agency added in a statement. —Edan Stanley