How The Inflation Reduction Act Lowers Drug Prices And Insulin Costs For Nebraskans

For Nebraskans, a diabetes diagnosis can feel like a one-two punch – besides having to contend with a complex regimen of care, they might feel they need a whole new budget just to make ends meet due to high insulin costs. Luckily, the Inflation Reduction Act, which went into effect last year, caps insulin costs for Medicare beneficiaries at $35 a month – providing much-needed relief to some 17,000 Medicare Part D insulin users in the state.

Diabetes: An Epidemic 

Diabetes is an epidemic across the United States, with tens of millions of Americans facing its potentially devastating consequences – and the stakes in Nebraska are no lower. More than 145,000 people in Nebraska have diagnosed diabetes. That number is growing – every year, an estimated 11,611 people in Nebraska are diagnosed with diabetes, in addition to the 522,000 people in Nebraska with prediabetes. Undiagnosed diabetes also remains an ongoing threat to Nebraskans. An additional 44,000 people in Nebraska have diabetes but don’t know it, greatly increasing their health risk.

The Cost of Treatment

Diabetes is a serious condition, but with proper treatment, it can be managed and even go into remission. Unfortunately, medical expenses can be a major barrier to people trying to access insulin and other life-saving medication. People with diabetes have medical expenses approximately 2.3 times higher than those who do not. In 2019, the average out-of-pocket cost for insulin was $58 for a 30-day supply, with patients on private insurance or Medicare paying $63 per fill on average.

Living with diabetes has only gotten more expensive. Over the past decade and a half, the amount Medicare enrollees spent out-of-pocket for insulin has skyrocketed – from $236 million in 2007 to more than $1 billion in 2020. Inflated costs have led Medicare enrollees to ration the life-saving drug, which can lead to dangerous health outcomes. 

The tens of thousands of Nebraskans experiencing diabetes know the pains of rising costs all too well. Direct medical expenses due to diabetes cost $993 million in Nebraska in 2017. And out of all 50 states, Nebraska ranked the fifth-highest in 2020 when it came to average out-of-pocket spending on insulin for Medicare enrollees. But Nebraskans are finally getting some relief thanks to the Inflation Reduction Act’s cap on insulin costs.

Saving the Day: Inflation Reduction Act

In January 2023, the Inflation Reduction Act capped insulin costs for Medicare beneficiaries at $35 for a month’s supply. The law caps prices with a stipulation that insurers may not charge more than that amount for a 30-day supply of a health plan’s lowest brand or generic tier of insulin. Before that, some seniors were already benefiting from Medicare Part D plans that offered $35 insulin, but the Inflation Reduction Act ensures that all seniors who use insulin will benefit from this out-of-pocket cost limit.

Thanks to the Inflation Reduction Act, the news gets even better. The law also will cap the cost of prescription drugs at $2,000 a year for seniors who have Medicare Part D. For people with diabetes, that could mean huge relief, considering that $1 out of every $3 spent on prescription drugs in the U.S. is spent on someone with diabetes. Medicare Part D recipients also no longer have to meet pricey deductibles on their insulin.

Nebraskans Feel the Relief 

Americans are already feeling the relief of the Inflation Reduction Act’s insulin cap. Since the cap was implemented, findings suggest that patients are feeling more encouraged to fill their insulin prescriptions. The number of insulin fills among Medicare Part D enrollees increased by nearly 4,000 per month. In contrast, the number of insulin fills decreased among older adults without Medicare during the same period.

And the cap is great news for Nebraskans on Medicare, especially for the 17,070 Medicare Part D insulin users. According to the Department of Health and Human Services, Medicare enrollees in Nebraska who use insulin could have an estimated savings of $677 per year under the Inflation Reduction Act. The relief doesn’t end there – thanks to the Inflation Reduction Act, 289,000 Medicare Part D enrollees in Nebraska can receive free recommended preventative vaccines.

In January 2024, two new cost-saving Medicare Part D benefits went into effect: the Extra Help program is expanding to provide more benefits for qualifying enrollees with limited income, and some enrollees now have their out-of-pocket drug costs capped at $3,500. And the 67,000 Nebraskans enrolled in Medicare Part D are expected to save $26 million thanks to 2024 policies. Additionally, 8,595 Nebraskans who had out-of-pocket spending above the catastrophic threshold in 2020 could benefit this year from the elimination of the 5% coinsurance above the Part D catastrophic threshold.

The Inflation Reduction Act will bring even more cost-lowering changes in the coming years. Next year, Medicare enrollees will have their out-of-pocket drug expenses capped at $2,000, helping the more than 13,000 Nebraskans with Medicare Part D who spent over $2,000 on prescription drugs in 2020. Beginning in 2026, Nebraska seniors will see lower prices for some life-saving prescription drugs, including some insulin products and other diabetes medications, thanks to the Inflation Reduction Act giving Medicare the power to negotiate drug prices.

For nearly 150,000 Nebraskans, living with diabetes is a challenge – but thanks to the cost-saving provisions in the Inflation Reduction Act, it no longer has to break the bank.