The risk of diabetes increases with age. Only one in ten Americans has diabetes, but that number grows to one in four for seniors.
Twelve million seniors have diabetes, but only ten million of those are diagnosed.1 Medicare covers most of the diagnosed diabetics. Diabetics may have Type 1 (5%) or Type 2 (95%) diabetes.2 All Type 1 diabetics use insulin, but less than 25% of Type 2 diabetics do.3
Different stages of the disease require different medicine and supplies as part of the treatment. For insulin-dependent diabetics, never running out of injectable insulin poses an acute challenge.
Medicare coverage largely begins at 65 or if you are on Social Security Disability Insurance. Important questions to consider are: Does Medicare cover my insulin supply? Which part of Medicare pays for that? Does Part D?
Medicare and Insulin Coverage
Your Medicare coverage falls under one of two overall plans:
- Original Medicare Part A (Hospital Insurance) and B (Medical Insurance), or
- Medicare Part C (Medicare Advantage).
Let’s look at what each plan covers in terms of insulin, other diabetes-controlling drugs, and various diabetic supplies.
Medicare Part B
- blood sugar monitors
- blood sugar test strips
- lancet devices
- glucose control solutions
Under certain circumstances, Medicare Part B also covers some diabetes-related services. These include diabetes screening for high-risk beneficiaries, foot exams, therapeutic shoes, and medical nutrition therapy.5
However, Medicare Part B does not cover:6
- Insulin (except for insulin pump use)
- Insulin pens
- Alcohol swabs
Medicare Part B only covers insulin if you use an external insulin pump. In that case, both the pump and its insulin may be covered under durable medical equipment (DME). You will have to buy them from an approved Medicare DME supplier or a retail pharmacy set up to bill Medicare as a DME supplier.
If your insulin is delivered any way other than an external pump, you will have to opt for coverage with Medicare Part D.
Medicare Part C (Medicare Advantage)
Medicare Advantage (MA) is a government-regulated alternative to Original Medicare (A and B). It is offered by many private insurance carriers and covers almost everything Original Medicare does. It also covers additional benefits not included in Original Medicare. Most MA plans include prescription drug coverage (Part D), which covers insulin.
Different MA plans cover different medications. In selecting a specific plan, check if it covers the insulin prescribed by your doctor. Also, make sure to check the cost; online tools allow you to search for available plans by specific medications.
A critical heads-up
MA plans tend to adjust their offerings at the end of the year, which can affect your insulin coverage.
Medicare Part D
Part D is a private, government-regulated plan that covers prescription drugs, including your insulin and other diabetes-controlling drugs. Besides medications, you will need supplies to administer the insulin. Part D coverage may include:
- Insulin pens
- Alcohol swabs
How You Pay Insulin and Diabetes-related Supplies Paid For
Plans vary on what and how much they cover.
Medicare Part B
First, you have to pay your deductible. Then Medicare Part B pays up to 80% of the remaining costs. Your share sits at 20% plus coinsurance and copayments unless you have a Medicare Supplement plan to help cover those costs.
Medicare Part C
Medicare Advantage coverage can vary widely from plan to plan. Some cover virtually everything. Others have deductibles and endless copays and coinsurance fees. What you pay for insulin and other supplies depends on the plan you select.
Medicare Part D
Whether you have a stand-alone Medicare Part D plan or an MA Prescription Drug plan, you may have to pay a deductible, copays, and coinsurance. Everything depends on the plan you select. Particularly as an insulin user, make sure your plan covers your doctor-prescribed insulin or includes it as an exception.
Pricing your medications can get very complicated. Each Part D plan has a different list of drugs it covers, called a formulary. It also assigns each medication, from generics to high-cost specialty drugs, to a pricing tier. So if you take several medications, this makes comparing plans a challenge. (The Medicare website gives you prices for drugs on all available Part D plans.)
The Medicare Part D Donut Hole
When Medicare Part D was implemented in 2006, it had a built-in coverage gap where drug plans did not pay toward medications. The gap was nicknamed the donut hole because plans offered coverage all around it.
The Affordable Care Act (ACA) provided discounts from 2012 through 2019. In 2020 forward, drug plan members will pay 25% of the cost for any prescribed medication from the time they meet the Initial Deductible until they reach the out-of-pocket spending limit ($6,350 in 2020) that leads to Catastrophic Coverage.
In summary, Medicare Part D prescription drug plans have four phases:7
- An Initial Deductible where you pay 100% of all costs at the pharmacy until your spending reaches the annual deductible set for your plan (a maximum of $435 in 2020).
- An Initial Coverage Limit, or ICL, which represents the next $4,020 of pharmacy expenditures paid by you and your plan combined.
- The Coverage Gap (Donut Hole) where, in 2020, you pay no more than 25% of your plan’s price for the drugs until you and your plan have paid an additional $2,330 of total drug value.
- The Catastrophic Coverage Benefit, where for the rest of the year you will pay the greater of 5% or $3.60 for generics and $8.95 for brand-name drugs.
The donut hole magnifies the importance of controlling your insulin costs. The added cost forces people to seek alternatives or cut back on dosages. But with the 2020 price discounts of 75% on purchases while in the donut hole, it is less likely you will find your particular insulin cheaper outside the Part D system.
Check with your doctor on less-costly insulin that may still meet your needs. For example, traditional insulins cost less than newer biologics, and insulin delivered in vials costs less than in more convenient delivery systems.
How Much Does Insulin Cost?
Insulin usage varies. People with Type 1 diabetes typically use more than those with Type 2 diabetes. GoodRx lists retail prices from $92 to $417 for a 10-ml vial, or higher, depending on the product’s features and delivery system.8 Most patients use two to three vials per month, while others use four. Also, those with Type 1 diabetes often require more than one type of insulin.
What If I Cannot Afford My Insulin?
Medicare’s Extra Help program pays for some out-of-pocket costs for prescription drugs. Social Security estimates this amounts to about $4,900 per year.9 It covers the monthly premiums, annual deductibles, and copays of the Part D plan in which you are enrolled. You must have limited resources and income and live in the 50 states or the District of Columbia. Contact Medicare for more information.10
A comprehensive publication is available from the Centers for Medicare & Medicaid Services entitled “Medicare Coverage of Diabetes Supplies, Services, & Preventive Programs.”11