IRA Cap on Out-of-Pocket Costs for Insulin Associated with Increased Persistence to Basal Insulin in Medicare Advantage Population

The Inflation Reduction Act (IRA) provisions to limit out-of-pocket insulin costs for Medicare beneficiaries was associated with a statistically significant increase in persistence to basal insulin in the Medicare Advantage population in 2023, the policy’s first year of implementation, according to an analysis conducted by the Pharmacy Quality Alliance (PQA) in partnership with Inovalon.

The analysis, published in The American Journal of Managed Care®, included 169,489 Medicare Advantage beneficiaries in 2022 and 142,898 in 2023, more than half of whom were dually eligible for Medicare and Medicaid or received a Low-Income Subsidy. Overall rates of persistence to basal insulin showed a statistically significant improvement from 76.7 percent in 2022 to 78.0 percent in 2023. Numerous subgroups experienced larger improvements in persistence, including those aged 45-54 and 65-74 years, men, Black individuals, and individuals in some geographic regions with a high prevalence of type 2 diabetes.

“Our early analysis suggests this cost cap had a positive impact,” PQA CEO Micah Cost, PharmD, MS, CAE, said. “While the IRA provision was expected to provide financial relief to Medicare beneficiaries, we also see an improvement in patients’ treatment persistence to basal insulin therapy, a measure that has been associated with positive health and economic outcomes.”

Persistence was assessed using PQA’s Persistence to Basal Insulin (PST-INS) health plan performance measure, which evaluates the percentage of individuals 18 years and older who were treatment-persistent to basal insulin during a measurement year. Persistence refers to continuation on basal insulin therapy without exceeding a permissible gap. Using data from Inovalon’s Medical Outcomes Research for Effectiveness and Economics Registry (Inovalon MORE² Registry®), the PQA analysis compared rates of insulin persistence in a nationally representative sample of Medicare Advantage beneficiaries during the years immediately preceding (2022) and following (2023) implementation of the insulin out-of-pocket cost cap of $35 per month.

“At Inovalon, we’re proud to offer the nation’s largest health care primary source de-identified dataset, and we believe in the power of data to improve health care outcomes and economics," said Christie Teigland, PhD, Vice President, Research Science and Advanced Analytics at Inovalon. “Access to a nationally representative sample of Medicare Advantage plan data enabled our team to conduct an in-depth first-look analysis, which found the insulin price cap resulted in more people taking their diabetes medication.”

As the seventh leading cause of death in the United States, diabetes costs the U.S. health care system more than $400 billion annually. Many adults with diabetes eventually require insulin therapy, including basal insulin, to achieve glycemic targets. Diabetes is particularly impactful in Medicare, where one in three beneficiaries has diabetes and more than 3.3 million beneficiaries use at least one form of insulin.

Under the IRA’s policies that took effect on January 1, 2023, Medicare Part D beneficiaries have no deductible for covered insulin products and have an out-of-pocket cost cap of $35 per month supply of each covered insulin product.

This project was supported by Eli Lilly and Company and Novo Nordisk.