New CMS Model Aims to Lower Insulin Costs for Seniors

Today CMS announced the Part D Senior Savings Model, allowing Medicare Part D prescription drug plans to offer plan choices that provide a range of insulins to beneficiaries, at a maximum $35 copay per 30-day supply throughout the benefit year.

The model is voluntary and targeted to enhanced Part D plans, which offer more prescription drug coverage than basic benefit designs but have higher premiums. The Trump administration previously announced it was responsible for a 13.5% decline in the average monthly basic Part D premium since 2017 to the lowest level in 7 years.

Beneficiaries enrolled in a participating plan could “save an average of $446 in annual out-of-pocket costs for insulin, or over 66%, relative to their average cost-sharing for insulin today,” according to a press release. Currently, 1 in every 3 Medicare beneficiaries has diabetes and more than 3.3 million beneficiaries use one or more common forms of insulin.

CMS estimates the model will save the federal government $250 million over 5 years as the agency predicts pharmaceutical manufacturers will pay additional coverage gap discounts. The model includes coverage of formulary insulins, including rapid-acting, short-acting, intermediate-acting, and long-acting insulins.

“Participating pharmaceutical manufacturers will pay the 70% discount in the coverage gap for the insulins that are included in the Model, but those manufacturer discount payments would now be calculated before the application of supplemental benefits under the Model,” the center stated.

To encourage Part D sponsor participation, CMS will also provide the option of risk corridor protection for calendar years 2021 and 2022 for plan benefit packages (PBPs) that “have higher enrollment than average from insulin-dependent diabetic patients, when the PBP meets qualifying criteria.”

“The Part D Senior Savings Model provides an innovative market-driven approach that removes barriers to lower insulin costs. We call on health insurance plans and prescription drug manufacturers to take action and provide relief for America’s seniors who take insulin,” said CMS administrator Seema Verma. “President Trump is delivering on his promise to lower the cost of prescription drugs for seniors.”