By Michael Mandel, PhD, and Kenneth E. Thorpe, PhD
President Biden and lawmakers in both parties have made it a priority to reduce Americans’ out-of-pocket spending on insulin. And they recently made significant progress by including a $35 per month copay cap for insulin for Medicare beneficiaries in the Inflation Reduction Act.
But as bright as these cost-cutting measures are, they raise a key question: Why limit co-pay price caps to insulin alone? Nearly 8 million Pennsylvanians have at least one chronic condition and three million are living with two or more. For seniors on Medicare, the prevalence of chronic disease is even higher and, for millions on fixed incomes, out-of-pocket costs are even more problematic.
If a co-pay cap of $35 a month makes sense for insulin—and it does—why not apply the same policies to medications that treat asthma, hypertension, and other common chronic conditions and target Medicare where diseases chronic so common?
Too many seniors struggle with the medications they need to stay healthy. The problem is especially acute here in Pennsylvania, where half of adults surveyed in 2020 said they were worried about taking prescription drugs. Ultimately, these struggles affect adherence to physician-prescribed treatment regimens, health status, and overall well-being. In fact, in Pennsylvania, 22% of adults failed to fill a prescription or dropped out of their treatment regimen due to cost concerns.
When people deviate from their prescribed medication regimen, the health consequences can be dire. It is estimated that drug nonadherence causes 125,000 deaths each year in the United States, accounting for 10% of all hospitalizations.
Capping the out-of-pocket cost of insulin at $35 is a step in the right direction. But given the scope of the affordability crisis, limiting these types of measures to a single class of medication aimed at treating a single illness cuts both human and economic savings potential.
Recognizing this concern, lawmakers—as part of the Inflation Reduction Act—passed a $2,000 annual cap on out-of-pocket spending on medications starting in 2025. When Medicare beneficiaries spend this amount at the pharmacy, they won’t have to pay a penny. to pay. more on drug costs that year.
But an annual limit of $2,000 is still far too high. The most direct and effective way to help the millions of Medicare beneficiaries with chronic conditions afford their medications is to limit the out-of-pocket cost of common chronic disease drugs.
This approach would save a lot of people, and it could reduce other Medicare health care spending, such as hospitals. By one estimate, medication nonadherence alone costs our health system up to $289 billion per year. The policy would also provide much-needed and highly visible financial relief at the pharmacy counter during a period of record high inflation.
More than half of Americans supported making the $35 insulin cap a top priority and passing a strict cap on the cost of insulin is an admirable start. A more expansive version of this policy to help Medicare beneficiaries is likely to gain even wider support. By offering the same help to people on Medicare living with diabetes and other common chronic diseases, lawmakers can save more lives and give veterans and their families bold action on the prescription drugs they seek.
Michael Mandel PhD is Chief Economist and Vice President of the Institute for Progressive Policy. Kenneth E. Thorpe PhD is a professor of health policy at Emory University and Chair of the Partnership to Fight Chronic Disease.
