New York-based Oscar Health is the latest insurer to cap some plan members' out-of-pocket costs for life-saving insulin and other medications, a move several insurance companies have made in the last year amid pressure to reduce prescription drug costs.
Oscar announced Wednesday that its individual insurance plan members will now pay $3 for a month's supply of 100 commonly used drugs. In addition to insulin, a high-cost drug is used to treat Type 1 diabetes, the list includes drugs to treat Type 2 diabetes, migraines, nausea, allergies and high blood pressure, among other medical conditions.
Lowering patients' copays makes it more likely they will take their medications, which means fewer costly visits to the doctor's office and emergency department, Oscar said in a blog post explaining its motivation.
"Solving this problem is good for business, but making sure people have access to medication at a reasonable price isn't a matter of economics, it's a matter of ethics," Oscar CEO Mario Schlosser said.
Other health insurers and pharmacy benefit managers have taken similar steps to help patients afford their medications, particularly insulin. The rising cost of insulin has come under scrutiny from policymakers, who have grilled drug manufacturers over their list prices and introduced legislation to reduce the cost of the essential drug. Some states, including Colorado and most recently, Illinois, have enacted laws capping insulin copayments for patients, as well. Other states are mulling such legislation.
Capping co-payments for insulin and other expensive medications is helpful to the limited number of patients covered by those participating insurers and employers. But copay caps do not address the underlying price of the drug and offer no help to patients who are covered by other health plans or who are uninsured.
"It doesn't bring down high list prices, which are paid by people without insurance and those who are in the deductible phase of their health plan and are not in a state or health plan that has enacted a cap on monthly out-of-pocket spending," said Jeannie Fuglesten Biniek, a senior researcher at the Health Care Cost Institute. "Additionally, it does nothing to improve the opacity of drug pricing or increase competition in the insulin market."
Insurers' programs reducing the cost of insulin and other drugs typically affect only a narrow slice of their membership. In Oscar's case, the $3 drug formulary will benefit about half of the insurer's 420,000 members with individual coverage. It won't be available to members in New York, New Jersey or California because of state regulations, a company spokeswoman explained, and it won't affect patients enrolled in individual catastrophic plans, Medicare or small business plans.
The much larger Cigna and CVS Health also introduced programs to cap or eliminate copayments for diabetes medications, but in both cases patients will benefit only if their employers opt in. Cigna, along with its pharmacy benefit manager Express Scripts, this year allows employers the option to offer members a 30-day supply of insulin for $25, which is about 40% less than what most Cigna members paid previously. The discount could affect up to 700,000 people, a company spokeswoman said at the time of the announcement.
CVS Health, owner of insurer Aetna, plans to eliminate out-of-pocket costs for all prescription diabetes medications for members whose pharmacy benefits are managed by the company's PBM, starting in 2021. A CVS spokesman did not say how many patients would be affected, as the company is still in active discussions with clients.
Minnetonka, Minn.-based not-for-profit insurer Medica capped a month's worth of insulin at a $25 copayment for 7,500 fully insured individual and employer group members in Minnesota, North Dakota, South Dakota and Wisconsin.
Meanwhile, in the absence of any federal relief, states have stepped up to protect patients from high drug prices. Starting Jan. 1, Colorado became the first state to cap commercially insured patients' copays for insulin at $100 per month regardless of how much they need. Insurers must absorb the rest of the cost. An Illinois bill signed into law in January limits insulin copays at $100 per month for people covered by commercial health plans. Bills being debated in California and Minnesota would implement similar copay caps.
According to the Health Care Cost Institute, the cost to manage Type 1 diabetes, which affects more than 1.2 million people, rose from $12,467 per person in 2012 to $18,494 in 2016. Spending on insulin drove that increase. Average annual out-of-pocket spending for insulin grew from $2,864 to $5,705 per person over that period, according to HCCI.
Unlike the majority of patients with Type 2 diabetes who can improve the effects of the disease and lessen their dependence on insulin through healthier diet and exercise, Type 1 patients do not make insulin and require several doses a day.
