According to the Centers for Medicare and Medicaid Services (CMS), about 33% of Medicare beneficiaries have diabetes. However, only about 23% of the beneficiaries diagnosed with diabetes use at least one form of insulin. Insulin is quite literally a lifeline for the 3.3 million Medicare beneficiaries who rely on it each day.
Without insulin, diabetic patients could lose their vision, suffer from foot ulcers, or even experience kidney failure. Over the years, many people have succumbed to their disease due to their inability to afford their insulin. While insulin costs are a constant struggle for younger diabetic patients, Medicare beneficiaries with the condition can breathe a sigh of relief.
On May 26, 2020, CMS announced that nearly 2,000 Medicare Advantage and Part D plans will offer insulin at a maximum of $35 copay for a 30-day supply in 2021. These savings are thanks to the Part D Senior Savings Model.
The Part D Senior Savings Model
As of 2021, Medicare Part D and Medicare Advantage carriers will be able to voluntarily join the Part D Senior Savings Model. Over 1,750 plans have already applied for the program and have agreed to lower out-of-pocket costs of insulin for their enrollees by an average of 66%. These plans are required to offer at least one pen and one vial option for each type of insulin covered. Covered insulins will include short-acting, intermediate-acting, rapid-acting, and long-acting.
That’s not all. The maximum allowed $35 copay is valid throughout the entire year. Therefore, beneficiaries enrolled in these plans won’t pay any more than $35 during the deductible stage, the initial coverage stage, the donut hole, or the catastrophic coverage stage. The copay can’t be increased based on the type of pharmacy, either. Whether members get insulin from a preferred, non-preferred, retail, or mail pharmacy doesn’t matter; the copay can’t exceed $35.
Drug manufacturers also have a participation requirement. They must agree to include all insulin products that are covered by Medicare within the Model; they can’t pick and choose which insulins the plans can offer at $35 per month. The drug manufacturers participating in the Part D Senior Savings Model are Eli Lilly and Company, Sanofi-Aventis, and Novo Nordisk.
The current system vs. the Part D Senior Savings Model
According to CMS, currently, Medicare Part D beneficiaries spend $675 annually for insulin. The two most expensive Part D stages for insulin users are the deductible and donut hole stages. The current system shows enrollees spending $435 during the deductible stage and $125 during the donut hole for a 30-day supply of insulin.
With the new Model, enrollees will spend no more than $35 in each stage for a 30-day supply of insulin. CMS has calculated the average annual savings will be $446. However, for many beneficiaries, the savings are even higher. While the savings are great, beneficiaries will also enjoy the stability and predictability of the new copays.
How to enroll in a Model Part D plan
The carriers that applied for the Part D Seniors Savings Model must have had their plans submitted to CMS by June 1, 2020. CMS suspects that there will be Model Part D plans (either through a standalone plan or a Medicare Advantage plan) available in all 50 states. The premiums and costs for the Model plans should be released in September of this year.
Beneficiaries can enroll in a Model plan offered in their area during the 2020 Annual Election Period, which begins on October 15th and goes through December 7th. Plans purchased during this period will be effective on January 1, 2021. Medicare beneficiaries can use Medicare’s Plan Finder tool to compare all the Part D plans in their area. CMS plans to add a filter option to the tool that allows beneficiaries to see which plans are part of the Model.
The Part D Senior Savings Model is a big win for diabetic Medicare beneficiaries across the country. Beneficiaries should take advantage of this new Model during the Annual Election Period so they can start accessing their deserved savings as soon as possible.