A cap on insulin costs benefits millions of Americans with diabetes

More than 37 million Americans have diabetes and about 7.4 million adults take insulin, a hormone that regulates glucose and is used to treat diabetic patients.

But insulin can be expensive for some patients across the United States. Capping costs has become a central issue for the Biden administration.

How much does insulin cost in the US?

The price of insulin varies widely, depending on one’s health insurance coverage, the brand of insulin, and the type or dosage of insulin they need. In extreme cases, a person with diabetes can spend over $1,000 per month, according to a US Senate Finance Committee report.

For example, a Novo Nordisk insulin pen cost $462 in 2019. That means a diabetic patient who needs four insulin pens per month would pay $1,848 monthly.

Of the Americans who take insulin, 52% are on Medicare, 33% are privately insured, 12% are on Medicaid, and 2% are uninsured. Those without health insurance are the most exposed to out-of-pocket costs. According to a recent report from the US Department of Health and Human Services (HHS), people with diabetes enrolled in Medicare or private insurance spent an average of $452 out of pocket for a year’s supply of insulin in 2019. Uninsured insulin users, however, paid more than twice as much out of pocket on average ($996) for insulin.

Simply needing insulin comes with a hefty price tag. The Department of Health and Human Services estimated that total healthcare spending, or the sum of all out-of-pocket payments and insurance coverage, was $446 billion for all diabetes patients in 2019. However, people with diabetes who took insulin that same year spent an estimated $202 billion on healthcare. That’s almost half (45%) of the total spending for all diabetes patients, even though people on insulin account for 27% of the diabetic population. That means people with diabetes who take insulin spend 2.2 times more annually on total health expenditures than those who don’t.

Those who are uninsured or have poor coverage may try to save money by rationing their insulin supplies, with an estimated 1.3 million Americans with diabetes saying they skipped or underused vials last year.

However, not taking — or not taking enough — insulin can have serious and sometimes fatal consequences. Diabetes is the eighth leading cause of death in the United States, and having diabetes can increase a person’s risk for severe COVID-19 symptoms, cause chronic kidney disease and kidney failure, and present other comorbidities. CDC research has shown that adults 50 or older with diabetes die 4.6 years sooner on average than those without diabetes.

The Inflation Reduction Act capped insulin costs

President Joe Biden signed the Inflation Reduction Act into law last August. The act includes a provision that caps Medicare beneficiaries’ monthly out-of-pocket insulin costs at $35. The price cap took effect on January 1, 2023.

Eli Lilly, the country’s largest insulin manufacturer, announced in March 2023 that it would cap the out-of-pocket price of its insulin at $35 a month, cutting the cost by 70%.

If the insulin cost provision in the Inflation Reduction Act had been enacted in 2020, about 1.5 million seniors on Medicare would have saved an average of $500 on insulin for the year, according to the HHS.

Native and Black Americans have the highest diabetes rates

Diabetes disproportionately affects communities of color. According to the Centers for Disease Control and Prevention (CDC), in 2018–2019, Native Americans and Black Americans had the highest rates of diagnosed diabetes in adults ages 18 and up, at 14.5% and 12.1%, respectively. About 11.8% of Hispanic or Latino American adults had diabetes, followed by 9.5% of Asian Americans. White Americans had the lowest diabetes rate at 7.4%.

Which states have the highest diabetes rates?

West Virginia and Mississippi had the highest diabetes rate of any state (13.1%). Alabama followed, with diabetes affecting 12.9% of its adult population, and Louisiana with 12.7%, according to 2020 government data.

There are also stark differences in education level when comparing diabetes rates. From 2018 to 2019, about 13.4% of adults with less than a high school diploma had diabetes, 9.2% of those with a high school diploma had diabetes, and 7.1% of those with more than a high school diploma had diabetes.

Higher diabetes rates are also apparent in lower income levels. In 2018, 14.1% of Americans who made less than the federal poverty level ($12,140 for a single person) were diagnosed with diabetes. Of people who made one to three times the federal poverty threshold, 10.8% had diabetes. People who made between three to five times the poverty measure (7.8%) had the lowest diabetes rates, as did people who made more than five times the level (5.6%), according to CDC data.

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