According to the Centers for Disease Control, in 2015, over 30 million Americans—or 10% of the population— have some type of diabetes. The Centers for Medicare and Medicaid Services (CMS) reports that one in three Medicare beneficiaries need insulin to manage their diabetes.
Living with diabetes is an everyday challenge and the costs can be devastating for seniors. An ADA study demonstrated that diabetic senior citizens spend twice as much on health care costs than seniors without the disease. Annual health care spending for a diabetic senior can be as much as $12,000 . Medscape suggests Medicare enrollees pay up to $1,140 or more for insulin each year, even with Part D.
For those on fixed incomes, the costs of treating diabetes are especially difficult to manage. Insulin costs have skyrocketed over the years and some Medicare beneficiaries have been unable to afford it, going without necessary treatment. This can lead to Y, blindness, kidney failure, and heart attacks.
To address this painful reality, CMS has introduced the Part D Senior Savings Model to help Medicare beneficiaries better afford their insulin.
Part D Senior Savings Model
The Part D Senior Savings Model will create predictable costs for insulin and will allow the beneficiary to know the price upfront when enrolling in a Part D plan.
The new Model is designed to cap the cost of insulin prescriptions at a $35 monthly for beneficiaries. Beginning October 15, 2020, beneficiaries will be able to sign up for a plan that offers the insulin savings. If beneficiaries enroll in one of these plans, the coverage will be instated January 1, 2021.
The Medicare Plan Finder will soon have a filter that will find plans that offer capped out-of-pocket costs for insulin. With that said, over 1,7500 standalone Medicare Part D prescription drug plans and Medicare Advantage plans have applied to lower insulin costs for the upcoming year. The Senior Savings Model will bring access to insulin by allowing Part D to enhance and bring alternative plans that offer lower out-of-pocket spending, by making the maximum copay for insulin being $35 for a month’s supply of a broad range of insulins.
This model is expected to save the federal government $250 million over the next five years. This will be due to the new limit slowing down the consumer’s progression into the Part D coverage gap phase. However, with this model in place, it is predicted to see out-of-pocket spending lowered by 66 percent per person, with more available Part D plan options.
What to expect in 2021
For the first time, CMS is encouraging Part D plans to offer fixed copays for beneficiaries to relieve the uncertainties of the 25% coinsurance costs in the coverage gap. Manufacturers and Part D plans have responded to this by reconsidering their benefits.
CMS anticipates that these Part D options will be available in all 50 states, including the District of Columbia and Puerto Rico. The retooled Part D plans offer beneficiaries a broad range of insulin benefits including insulin pens and vial dosages for rapid-acting, short-acting, intermediate-acting, and long-acting forms of insulin. Each plan will cover at least one vial and one pen-type insulin product.
You will be able to drop or change your Medicare Advantage Plan and Part D plan during the Annual Election Period, which begins October 15th and ends on December 7th. For those who rely on insulin to manage their diabetes, the new Part D Senior Savings Model represents a major cost savings. Your Medicare agent can help you find the plan that works best for your needs.
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