The U.S. Department of Health and Human Services estimated that a $35 cap on monthly insulin costs for Medicare enrollees that took effect Jan. 1, will save Georgians over $21 million.
The monthly cap in out-of-pocket costs for insulin was made under a provision of the larger Inflation Reduction Act, targeted to ease financial strains on people covered by Medicare. In a Tuesday press conference, HHS officials released estimates of the potential effects of the insulin cap on out-of-pocket spending for insulin among Medicare beneficiaries using 2020 Medicare claims data.
An estimated 11% of the U.S. population, has diabetes, meaning the pancreas does not produce enough insulin (type 1 diabetes), or the body does not respond to insulin properly (type 2 diabetes). The cost of prescription insulin is far higher in the U.S. than in other countries, which has led some to ration their supply, resulting in serious health effects.
In a state-by-state estimate of the savings created by the insulin cap using 2020 Medicare claims data, HHS officials said 45,625 Georgians on Medicare would have saved a total of $21.76 million. That averages out to $477 per person, if the law had been in place that year.
Nationally, the savings would be $761 million.
Asked how the 2020 estimates would compare today, HHS officials said with the continual growth in the Medicare-eligible population, there are more enrolled now, but the federal agency had no estimate of how many enrollees are taking insulin in 2023.
HHS Secretary Xavier Becerra in a press release, “Thanks to this historic law, people who get their insulin through Medicare won’t have to pay more than $35 for a month’s supply. No one should have to skip or ration their insulin because they can’t afford it.”
The Jan. 1 provision applied to Medicare Part D, and on July 1 the provision will apply to Medicare Part B. The law also provides recommended vaccines for free, including the shingles vaccine, and rebates on prescriptions when rates are higher than the rate of inflation to those enrolled in Medicaid.
Additionally, with the Inflation Reduction Act, the government gained the ability to negotiate drug prices directly with pharmaceutical companies. HHS says they are in the early stages of beginning that work and have not yet decided which drugs they will negotiate prices on. The benefits of those negotiations are expected to begin in 2026.
“Over the course of the next couple of years the process will go into effect and launch,” Becerra said during a White House press call. “This year, we will have the opportunity at HHS to determine the first 10 drugs that will undergo this negotiation.”
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