Out-of-pocket insulin spending before and after the Inflation Reduction Act across demographic subgroups

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Diabetes Management

Background:

• The Inflation Reduction Act (IRA) introduced a $35 out-of-pocket (OOP) monthly cap on insulin costs for Medicare Part D beneficiaries starting in 2023.
• Previous research indicated reduced per-prescription insulin costs post-IRA, but annual spending patterns remained less understood.

Purpose of the Study:

• To evaluate the impact of the IRA's insulin cap on annual OOP insulin spending among Medicare Part D beneficiaries.
• To determine if annual spending fell below the annualized cap of $420 ($35/month).
• To analyze disparities in savings across various demographic subgroups.

Main Methods:

• Utilized nationally representative data from the Medical Expenditure Panel Survey.
• Employed survey-weighted two-part models to compare annual per-person OOP insulin spending between 2022 and 2023.
• Analyzed spending variations by sex, race/ethnicity, income, education, insurance type, and insulin prescription details.

Main Results:

• Average annual OOP insulin spending per person decreased from $359.95 in 2022 to $214.11 in 2023 (P=0.016).
• Despite the cap, 13.2% of beneficiaries exceeded $420 in annual OOP insulin spending in 2023.
• Cost-related medication nonadherence rates remained unchanged, and spending reductions were consistent across demographic groups.

Conclusions:

• The IRA's insulin cap effectively reduced annual OOP spending for Medicare beneficiaries, showing potential for equitable access.
• A significant minority of patients still incurred costs exceeding the annualized cap, indicating persistent access barriers.
• Further interventions are necessary to address remaining gaps in insulin affordability and access.