The monthly spending limit improved adherence for insulin users who had especially high costs, new JAMA study finds
Medicare’s new out-of-pocket insulin cap reduced and stabilized beneficiaries’ monthly spending on the drug while increasing its use among those with previously high costs, according to a new JAMA study from researchers at the USC Schaeffer Center for Health Policy & Economics.
The Inflation Reduction Act (IRA) capped monthly insulin costs at $35 for Medicare beneficiaries amid concerns that seniors were rationing or skipping doses, increasing the risk of dangerous complications. Millions of Medicare beneficiaries use the life-saving drug, spending more than a combined $1 billion out of pocket annually before the IRA.
After the cap was implemented in January 2023, beneficiaries’ average monthly out-of-pocket cost declined 21%, or about $5, researchers found. Costs also became more predictable; previously, depending on their coverage, beneficiaries could spend double for a monthly supply within the same calendar year, prompting some to avoid refilling their insulin.
Beneficiaries who previously had very high monthly insulin costs (at least $58) especially benefited from the cap. Their monthly costs were cut in half, insulin fills increased by 8%, and days with available insulin increased by 5%. The improved adherence suggests these insulin users had been skipping doses to save money.
However, there was little change in insulin use among beneficiaries as a group, likely reflecting that many Medicare patients already had low costs. Nearly three-quarters of beneficiaries using insulin had reduced costs through Medicare’s Low-Income Subsidy program or the Senior Savings Model, a temporary pilot program launched in 2021 that capped insulin costs for some beneficiaries. In the two years before IRA implementation, just 13% of insulin fills would have exceeded the law’s cap.
“Future out-of-pocket caps will have the largest impact if they can target patients facing high out-of-pocket costs, such as people who are uninsured,” said lead author Rebecca Myerson, a Schaeffer nonresident senior scholar and associate professor at Emory University’s Rollins School of Public Health.
In addition to the IRA cap, public outcry over insulin prices in the past decade has spurred state efforts to limit costs, and the leading insulin manufacturers have taken measures to improve affordability. Patients are also expected to save billions of dollars over the next decade from recent settlements between the Federal Trade Commission and pharmacy benefit managers over the intermediaries’ role in rising insulin prices.
Congress is meanwhile renewing efforts to improve insulin affordability. A bipartisan group of senators recently introduced legislation that would extend Medicare’s $35 monthly cap to private insurance plans and create a pilot program to similarly limit costs for uninsured Americans. A universal cap would have saved insulin users $170 million in out-of-pocket costs in 2024, according to the IQVIA Institute.
“Making sure patients take their medication should be a greater clinical priority. Our research demonstrates a powerful policy lever for doing so: reducing their out-of-pocket costs,” said co-author Dana Goldman, founding director of the USC Schaeffer Institute for Public Policy & Government Service.
About the study
Other authors are John Romley, Dima Mazen Qato, Erin Trish and Anne Peters of the USC Schaeffer Center and Ying Cao of the University of Wisconsin-Madison. See the study for author disclosures.
The research was funded by a grant from the National Institute of Diabetes and Digestive and Kidney Diseases (R01DK141885).
