Some diabetics on Medicare pay more for insulin to pump
Federal cap limited, but could be expanded, made permanent
Blair Brenner has been an insulindependent Type 1 diabetic for more than 40 years and hasn’t always had the disease under control.
She’s been hospitalized for diabetic complications and found that even if she ate healthy foods and exercised regularly, her numbers still were erratic.
It wasn’t until she got on an insulin pump with a continuous glucose monitor that she saw her condition stabilize and her A1C – an important measure of blood sugar levels – come down below 7%. The target of less than 7% is associated with a lower risk of diabetes-related complications, according to the Mayo Clinic.
This is why she was so surprised to learn, after turning 65 in 2020 and going on Medicare, that the federal government’s health plan for seniors charges more for the same vial of insulin if it’s used in a pump than if it was used via another injection method.
“It’s the same number of vials of insulin that I need,” Brenner said.
But she’s gone from paying $105 for a threemonth supply to $415 for the same insulin.
That’s because a pump, a medical device, is billed under Medicare Part B, which typically covers things like doctor office visits and lab tests. But so is the insulin that goes into the pump, despite being a drug normally covered under Medicare Part D, a separate benefit plan that covers prescription drugs typically picked up at a pharmacy.
Brenner’s challenges come as the federal government is testing a voluntary model under Medicare’s prescription drug program in which the co-payment for a month’s supply of insulin is capped at $35 through participating plans. The model is set to expire on Dec. 31, 2025.
But the voluntary cap, and proposals before Congress to make it a permanent mandate, only affect those who get insulin through their Part D prescription plan. Pump users like Brenner are ineligible.
Why are insulin pumps treated differently by Medicare?
Brenner, now 67, had heard about the $35 cap on insulin under Medicare, and her costs at the beginning of the year were in line with that. But each
quarter of her first year on Medicare, the cost increased and she went looking for answers.
“It was an unanticipated shock when it skyrocketed and I spoke to Humana at the time and they said that’s just the way it is,” she said. “Because the insulin was delivered via a pump, Medicare allowed them to charge me as if the insulin was a medical supply, not a prescription.”
It seemed odd to her, but health insurance experts say the rule has been around since before Medicare had a separate drug benefit, now called Part D.
“Medicare A and B have been around for a long, long time, and, you know, supplies have always been that kind of B benefit,” said Benjamin Link, a pharmacist and vice president of pharmacy for Ohio-based drug analytics firm 3 Axis Advisors.
Historically in Medicare, if something is used with a device, it’s a B benefit, not a D benefit, even if it is identical to the drug sold through a pharmacy, he said.
Patients who use various nebulized medicines may encounter the same kind of issue, Link said.
But as technology advances, it’s unclear why some devices are labeled as such and some are not, Link said.
For example, Medicare considers diabetic pumps that have tubes to be under Part B benefits. But there are new devices like the Omnipod and V-Go – tubeless wearable pumps that deliver one to three days of insulin – which are not considered medical devices and are covered under Medicare Part D along with the insulin that goes in them.
Link said as a pharmacist, he wouldn’t recommend patients who are controlling their diabetes using a current method, such as a pump or a pen, change devices just to save money on Medicare. It’s unfortunate, he said, that someone like Brenner has to pay more for the device that is keeping her healthy, and therefore saving Medicare money, he said.
A spokesperson for the Centers for Medicare and Medicaid Services did not answer why the rule is set up this way but confirmed that insulin for individuals using insulin infusion pumps falls under Medicare Part B’s Durable Medical Equipment benefit.
Patients pay 20% of the cost of that insulin after their deductible.
How to pick the right Medicare plan?
Link said very few people in the United States have the health care literacy necessary to effectively shop Medicare options.
Brenner said she was always grateful that she remained employed as a speech and language pathologist and had good health insurance that covered most of her expenses.
But when people reach 65, they have to make complex decisions they’ve never practiced making, Link said. And those with complicated conditions might not know about strange loopholes like the insulin pump rule.
“You are now arguably likely going to be sicker than you’ve ever been, and you have to decide. Are you taking traditional Medicare? Are you going to add on a Part D plan? Are you going to add on a Medigap plan?” Link said.
Brenner met with a Medicare consultant when she picked out her plan initially. She lives in the Chicago suburbs so they went over what plans and providers were available to her in Illinois.
She chose a special Diabetic Medicare Advantage plan that she thought would meet her needs.
But the fact that insulin would be charged as a medical device supply instead of a drug wasn’t evident to her when she signed up.
It’s not always clear who is funding Medicare consultants, Link said. If they work for a brokerage firm, they will likely only recommend plans that they have already bought.
The Centers for Medicare and Medicaid Services provides a list of brokers and agents and how much they are compensated to sell certain Medicare plans.
Link said people getting ready to pick a Medicare plan should do their homework like they are studying for a test.
People should develop a priority list of what’s important whether that’s specific drug coverage or specific doctors so they can evaluate plans objectively.
$35 cap on insulin could be mandatory
Two companion bills in the House and Senate dubbed the Affordable Insulin Now Act would cap cost-sharing under Medicare Part D at $35 a month and for private health insurance at $35 or 25% of a plan’s negotiated price, whichever is less.
Rep. Lucy McBath, D-Ga. released a statement last week following reports that the House version she sponsored will be added to the Inflation Reduction Act. McBath’s bill is a companion measure to the one introduced by Sen. Raphael Warnock, D-Ga.
The measure previously passed the House.
It has been endorsed by the American Diabetes Association.
However, because the bill only caps the price of insulin under Medicare Part D plans, this change would not affect patients such as Brenner who have to buy their insulin under Medicare Part B because they use a pump.