How Many Would Benefit From an Out-of-Pocket Cap on Insulin?

Democrats and Republicans don’t agree on much. Caps on out-of-pocket costs for insulin might be an exception to the rule. Bipartisan talks are underway that would put a $35-per-month cap on out-of-pocket insulin costs. Some of the bills under consideration would also require insurers to cover at least one dosage form (pen, vial) of each type of insulin — rapid-acting, short-acting, intermediate-acting and so on.

Researchers at Kaiser Family Foundation set out to calculate how many people with private health insurance would benefit from such a cap. In other words, how many people pay more than $35 a month for insulin.

Using a 2018 claims database from private health plans, they identified roughly 1 million people who had a prescription for insulin filled. Of those, 184,000 were covered by plan sold in the individual market, 105,000 by a plan sold in the small employer market, and 802,000 by a plan in the large employer market.

They found that 26% of those with individual market coverage paid more than $35 per month on average for their insulin prescription. In the small employer market, the percentage was 31%, and in the large market it was 19%.

Of course, the savings would be greater for some than others depending on their plan’s coverage. The Kaiser Family Foundation researchers found that for more than 1 in 20 insulin users with private insurance pay more than $150 per month for their insulin, so for that group would save at least $115 a month if a $35 cap were imposed.

But, as the foundation researchers note, a ceiling on out-of-pocket costs does not deal directly with the prices that insulin makers are charging. If out-of-pocket costs are limited that may shift added cost to health plans, which, in turn, may put upward pressure on premiums.

There is a chance, though, that lower out-of-pocket costs will indirectly benefit payers if people are more adherent and need fewer medical services as a result.