Trends in Insulin Out-of-Pocket Costs and Reimbursement Price
Research Fellow Amir Meiri's research examines the implications of drug pricing on health outcomes among the diabetes populations, specifically focused on better understanding the impact of insurance benefit design on insulin costs and pricing among a population with diabetes. His most recent study in JAMA Internal Medicine examined insulin out-of-pocket costs and reimbursement price from 2006-2017 among patients with commercial insurance. We spoke with Dr. Meiri to learn more about the study, what the team learned, and what direction his future research might take. Let's dive in.
Q: Your work focuses on gaining a better understanding of the impact of insurance benefit design on insulin costs and pricing among a population with diabetes. Can you tell us about the different health insurance plan designs you examined in this study, and how they affect patient out-of-pocket costs?
A: We evaluated members with three different insurance plan designs: high-deductible health plans with a health savings account (HDHP-HSA), plans with a health reimbursement arrangement (HRA), and plans with any deductible level without a savings account (no account). Members in HDHP-HSA must pay the full negotiated amount of a prescribed medication until they reach their annual deductible level, after which they either pay $0 or a small copayment per prescription. On the other hand, those members without an HSA-type account (HRA and no account) typically pay for medications using a traditional tiered copayment schedule (i.e. certain dollar amount per specific prescription as negotiated by the insurer). Members who have an HRA can use this employer-owned savings-type account to pay for medications (including copayments). Since HDHP-HSA members are responsible for the full cost of medications prior to reaching their deductible level, they are potentially most at risk for the reported high out-of-pocket costs of insulin while those without HSA-type accounts must only pay copayments, which are lower than the reimbursement price of insulin and may be less burdened by these medications.
Q: Can you provide an overview of how your team conducted the study and what the findings showed?
A: In our study, we aimed to describe trends in the reimbursement price and out-of-pocket cost of insulin among commercially insured members using insulin pharmacy claims. We estimated the reimbursement price of insulin by taking advantage of the fact that HDHP-HSA members must pay the full amount for an insulin prescription prior to reaching their annual deductible. Thus, we could determine the actual negotiated amount paid by the insurer or pharmacy benefit manager for the insulin prescription. We plotted annual trends in this reimbursement price over the 11-year study period. We then plotted the out-of-pocket insulin cost per 30-day insulin fill and per member-month using annual means during the study period, stratifying by three insurance benefit design types: HDHP-HSA, HRA, and no-account members. We also calculated the proportion of the actual price that patients pay.
Our major findings showed that insulin out-of-pocket costs are generally lower than expected, except for those members with HDHP-HSA, and are declining. Among all insulin users, out-of-pocket costs per month peaked at $72 in 2013, then decreased to $64 by 2017. HDHP-HSA members’ insulin out-of-pocket costs per month peaked at $150 in 2014, then decreased to $141 by 2017. While insulin reimbursement price increased, the share that patients paid actually decreased substantially over time.
Q: Did the results surprise you?
A: Yes! We were surprised to see that our results contradict some of the major media stories reporting exorbitant insulin out-of-pocket costs. Uninsured patients almost certainly face such exorbitant prices, which is highly concerning. However, we found that very high out-of-pocket insulin costs might not be typical for commercially insured patients, except among HDHP-HSA members. We were also surprised to see that insulin out-of-pocket costs have been declining.
Q: How does this study differ from other studies of its kind?
A: To date, there are no studies looking at the cost burden of insulin by insurance benefit type. There have been studies that demonstrate the drastic rise in insulin prices and out-of-pocket costs, including the 2014 JAMA study by Lipska et al. and the 2015 JAMA IM study by Luo et al but none have examined with the granular detail of how insurance benefit design may impact insulin out-of-pocket costs. Our study adds important details about how the type of insurance patients have may affect their actual out-of-pocket cost for insulin.
We were surprised to see that our results contradict some of the major media stories reporting exorbitant insulin out-of-pocket costs. Uninsured patients almost certainly face such exorbitant prices, which is highly concerning. However, we found that very high out-of-pocket insulin costs might not be typical for commercially insured patients, except among HDHP-HSA members. We were also surprised to see that insulin out-of-pocket costs have been declining.
Amir Meiri, MD
Q: In the Research Letter, you say the data suggest that commercial health insurers have accommodated higher insulin prices by increasing premiums or deductibles for all members. Could this reflect a larger issue around price inflation by pharmaceutical companies?
A: Yes, the root of the problem is the exorbitantly high prices set by pharmaceutical companies, which allows for the pharmacy benefit manager to negotiate rebates on behalf of insurers—these are rarely passed along to patients. These high prices must be lowered through policy regulation or competition; otherwise pharmaceutical companies will continue to hide exorbitant prices within the fragmented and complex US commercial health insurance system.
Q: What are the potential implications of this study? What future studies are you and your team considering to expand on this work?
A: Our study hopes to inform recent state and federal policies that cap monthly out-of-pocket costs for insulin. Colorado capped insulin monthly costs to $100 last year, Massachusetts passed legislation to cap at $25, and just recently, the Trump administration announced that Medicare will offer plans that cap insulin out-of-pocket costs at $35. Our study can help inform a more targeted approach to policies aimed at capping insulin out-of-pocket costs, particularly around the vulnerable HDHP-HSA group. We hope to continue evaluating the impact of insurance benefit design on diabetes patients, next by describing trends of insulin utilization, focusing on HDHP patients with low incomes.
Our study can help inform a more targeted approach to policies aimed at capping insulin out-of-pocket costs, particularly around the vulnerable HDHP-HSA group.
Amir Meiri, MD
Meiri A, Zhang F, Ross-Degnan D, Wharam JF. Trends in Insulin Out-of-Pocket Costs and Reimbursement Price Among US Patients With Private Health Insurance, 2006-2017. JAMA Intern Med. Published online June 01, 2020. doi:10.1001/jamainternmed.2020.1302