Will the Inflation Reduction Act improve Medicare coverage of diabetes treatment?

Is it true that insulin will not cost more than $35 per month?

The Part D Savings Model started to offer discounted insulin in 2021. Not all Medicare Part D plans participated in the program but those that did could offer certain kinds of insulin at a rate of $35 per month. Not all insulin products were included in this program, however, and people that got their insulin through an infusion pump – which is covered by Part B rather than Part D – could not benefit from the program.

The Inflation Reduction Act put a monthly cap on the amount Medicare enrollees pay for all types of insulin. Starting on January 1, 2023, Medicare beneficiaries will pay no more than $35 per month for their insulin. All types of insulin are included across all Part D plans. Insulin covered by Part B (ie, for us in an insulin pump) is also included, although not until July 2023.

Keep in mind that some people require more than one kind of insulin to manage their diabetes – and  the cap applies to each insulin product you take. (If you take two products, each one will be capped at $35 per month for a total of $70 per month.)

One important point to note: The Medicare Plan Finder tool on Medicare.gov will not reflect the $35 caps for all insulin products in the fall of 2022, since Part D insurers had already submitted their plan details before the Inflation Reduction Act was enacted. So CMS has clarified that people who use insulin will have one opportunity to pick a different plan for 2023, if necessary. This opportunity will run from December 8, 2022 through the end of 2023, and beneficiaries will need to call 1-800-MEDICARE to have a customer service representative process the plan change.

CMS has a list of frequently asked questions about the $35 insulin cost-sharing cap, details on how enrollees can get reimbursement if their covered insulin is more than $35 in the first few months of 2023, and information about the special enrollment period for people who use insulin.

Will the IRA put a cap on the costs of other diabetic medications?

A wide number of medications are used to treat diabetes – and insulin is only one of them. The Inflation Reduction Act put a cap on insulin costs but not on the amounts Medicare enrollees will need to spend on these other medications.

Will the IRA allow Medicare to negotiate with drug companies for lower rates on my diabetes medications?

Until the Inflation Reduction Act passed, Medicare was not allowed to negotiate with drug companies to decrease costs. The law will now allow authorize and require the Secretary of Health and Human Services to engage in price negotiations for certain high-priced drugs beginning in 2026. Not all drugs will be eligible for negotiation, only those that do not have a generic option and those that have been on the market for at least 9 years for most drugs but up to 13 years for biologic medications.

In that first year, only 10 drugs covered by Part D will undergo price negotiations. The number will increase to 20 drugs by 2029.

There is no guarantee that a diabetes drug will be one of the medications up for negotiation in 2026, but it is possible. According to the CMS Medicare Part D Spending by Drug Dashboard, Trulicity, one of the GLP-1-receptor agonists, was ranked fourth for total Part D drug spending in 2020. The medication has been on the market since 2014 and its patent is not set to expire until 2027. Stay tuned.

Does Medicare cover needles and syringes if I need them to take my insulin?

People who take insulin may need additional supplies to administer it. If your insulin does not come in a prepackaged pen, you will need a syringe and needles to prepare and administer your doses. To prevent infection, you will also need alcohol swabs and gauze to clean the area before you inject yourself. These supplies are covered by Part D at rates set by your plan. What you pay will not be affected by the Inflation Reduction Act.

Does Medicare cover diabetic testing supplies?

Whether or not you take insulin, you will also need diabetes testing supplies to monitor your blood sugar levels. This will include items like glucometers (blood sugar monitors), blood sugar test strips, lancet devices, and glucose control solutions. These supplies are covered by Medicare Part B and you will pay a 20% coinsurance for them when you go to Medicare-approved supplier. The Inflation Reduction Act does not offer a price reduction on these items.

Not all retail pharmacies or Medicare suppliers accept assignment – and that could affect how much you pay at the point of service. Accepting assignment means that the supplier agrees to charge no more what Medicare recommends for these items. When you go to a retail pharmacy or supplier that accepts assignment, you will pay 20% up front and they will bill Medicare for the rest. Retail pharmacies that do not accept assignment, however, may require you to pay the full price. You will have to reach out to Medicare for reimbursement.

How much is covered depends whether or not you also take insulin. Specifically, someone who does not take insulin can get 100 test strips and 100 lancets every 3 months. Someone who takes insulin gets three times that, 300 tests strips and lancets, because their insulin dose may need to be adjusted based on their blood sugar readings. If you need more supplies, your healthcare provider will need to explain to Medicare why that is the case.