9 Things To Know About Medicare Insulin Costs (And the New Cost Cap)

Until recently, insulin could cost more than $250 per vial in the U.S. That's up to 10 times more than the average cost worldwide. 

Fortunately, the 2022 Inflation Reduction Act put a cap on certain prescription drug costs, including insulin, to keep life-saving medications affordable amid historic inflation. This year, a $35 cap on insulin costs was enacted for Medicare recipients. 

We'll answer your questions about what the recent Inflation Reduction Act change means if you're a retiree relying on Medicare and trying to keep more money in your wallet.

When individuals become eligible for Medicare enrollment, they have a few coverage options: Original Medicare and Medicare Advantage, also known as Medicare Part C. 

While Original Medicare refers to traditional health insurance coverage for retirees administered by the federal government, Medicare Advantage plans are private health insurance plans supporting Medicare coverage.

Both types of Medicare coverage have pros and cons, and it's important to carefully research your plan options before deciding. 

No matter which Medicare plan you choose, the Inflation Reduction Act's insulin cap applies to your insulin prescription, and you shouldn't pay more than $35 for a one-month insulin supply.

While diabetes Types 1 and 2 have similar symptoms and long-term effects, they have different origins. If you have Type 1 diabetes, your pancreas doesn't produce insulin to begin with. 

With Type 2 diabetes, your pancreas still produces insulin, but it creates less than it should as your body stops responding correctly to insulin.

Both types of diabetes may require insulin injections as part of an ongoing treatment plan. Regardless of which type of diabetes you have, the new price cap will apply to your monthly insulin prescription.

Medicare Part B is one essential half of Original Medicare. It's also included in Medicare Advantage plans. Original Medicare and Medicare Advantage also include Medicare Part A, which helps pay for hospital stays and care facilities.

Medicare Part B helps cover the costs of durable medical equipment (DME), which includes insulin pumps. If you use an insulin pump instead of insulin injections, Medicare Part B caps your monthly insulin costs at $35.

Medicare Part D plans help cover prescription drug costs, including insulin prescriptions. If you use insulin injections rather than an insulin pump, you need Medicare Part D to take advantage of the $35-per-month cap.

Medicare Part D is considered an add-on to Original Medicare. Even if you don't take any prescription drugs when you first sign up for Medicare, it's wise to add Part D to help pay for future prescriptions (including potential insulin injections). 

Most Medicare Advantage plans bundle Part D with Parts A and B, but double-check with your insurance provider to ensure your plan includes Part D coverage.

Prescription drug costs under Medicare Part D are determined by the insurance plan provider's formulary, which is a list of covered prescriptions and their associated costs. 

Since there are over 70 different types and brands of available insulin prescriptions, it's unlikely that your Part D plan covers every single insulin product, nor is it required to.

The $35-a-month cap doesn't apply to insulin products not listed on your Part D formulary. Fortunately, since there are so many products available, your health care provider should be able to prescribe a covered insulin product so you can take advantage of the price cap.

Even though insulin is just one part of an overall diabetes treatment plan, the $35 cap doesn't apply to any diabetic management prescriptions outside of insulin. 

That restriction includes both non-insulin prescriptions and prescriptions that combine insulin with another product.

Typically, Medicare enrollees can only change their Medicare plans during the annual open enrollment period (October 15 through December 7). 

However, since insulin caps didn't take effect until January 2023, many Medicare recipients had difficulty determining whether their current Part D plan provided the capped insulin coverage they needed.

As a result, some Medicare enrollees may qualify for a Special Enrollment Period (SEP) for Exceptional Circumstances. 

If you qualify for a SEP, you can change or add a Part D plan outside the regular open enrollment period. To learn more, call 1-800-MEDICARE and ask about your options.

Some, but not all, Medicare Part D plans require you to meet a deductible before the plan starts to cover prescription costs. For 2023, that deductible is capped at $505 for all Part D plans.

But whether your plan does or doesn't have a deductible doesn't matter when it comes to covered insulin products. Even if you haven't met the deductible, you won't pay more than $35 a month for your covered insulin prescriptions.

Although the insulin cost cap took effect on January 1, Medicare plan administrators had a three-month grace period for implementing the coverage change. 

As a result, even if you have Medicare Part D and filled a covered insulin prescription between January 1 and March 31, you might have paid more than $35 for the prescription.

No matter where you filled the prescription or how much you paid for it, your Part D plan must reimburse you for the amount you paid over $35. 

If you know you need to be reimbursed for a prescription filled earlier this year but haven't heard from your Part D plan yet, don't hesitate to get in touch.

You shouldn't have to choose between sticking to your monthly budget and paying for a life-saving medication. 

Thanks to the new Medicare Part D cap, insulin should have a much smaller impact on your monthly budget to help you avoid wasting money in retirement.