Part D Senior Savings Model Reduces Insulin Costs, Improves Diabetes Care

Throughout its 3-year effort, the Medicare Part D Senior Savings (PDSS) model was reported to successfully lower out-of-pocket (OOP) costs and increase adherence and utilization of insulin for Medicare beneficiaries, according to a news release.¹ While the model did end up increasing insurance costs for beneficiaries not using insulin, the success of the PDSS’ first 3 years may help inform greater policies focused on lowering drug costs.

“In response to escalating drug costs and variation in cost-sharing as beneficiaries move through the different Part D benefit phases, the federal Center for Medicare and Medicaid Innovation implemented the Part D Senior Savings model test in 2021, 2022, and 2023,” according to the release. “The effort tested the effects of lower, predictable drug cost-sharing, focusing specifically on insulin—a crucial medication for diabetes treatment.”

According to the official RAND Health Care report, the PDSS model improved a variety of patient burdens associated with insulin use, cost, and adherence by capping beneficiaries’ OOP spend on insulin at $35 per 1-month supply.² Some of the successful outcomes uncovered in the report included increased insulin access, adherence, and utilization; decreased annual OOP spend for beneficiaries on insulin; increased enrollment in participating Medicare plans by insulin users; increased payments made by insulin manufacturers to participating plans; and decreased Part D drug costs for Medicare.

"Future drug models might extend the application of lower cost-sharing to other drugs and drug types to determine whether similar impacts on costs and quality might occur,” according to report co-author Dmitry Khodyakov. | image credit: Pixel-Shot / stock.adobe.com

READ MORE: Q&A: Supporting Ongoing Insulin Use Through Pharmacy Counseling

Further deriving successes from this model, researchers found that it also decreased costs for the federal government and its involvement in prescription drug plans (PDPs). Because the model would increase manufacturers’ rebate and coverage gap payments, the US government and its role within Medicare Part D would have a decreased financial burden.¹

However, amid the significant success the model displayed for beneficiaries using insulin, the report included some potential risks of the PDSS model. First, the OOP costs and included premiums for noninsulin-using beneficiaries in a Part D plan increased in relation to PDSS. Researchers also reported an increase in Part D risk scores for insulin users enrolled in those plans.²

“As policymakers look at cost-saving approaches for other drugs, these findings may provide important lessons for such efforts,” said Erin Taylor, the report's lead author.¹ “We found that such efforts can have positive results that are appreciated by Medicare beneficiaries, especially those who take multiple expensive medications.”

While both the negative and positive findings from the report can be significantly insightful for Medicare programming, it’s important to understand the PDSS model itself and how it was designed to offer patients OOP savings. Through PDSS, beneficiaries in standalone PDPs and those in Part D plans provided insulin at a fixed rate of $35 max for monthly supplies.

After offering discounted insulin throughout the model’s 3 years of testing, researchers explored patient outcomes related to insulin access, health-related outcomes, and beneficiary costs on top of financial outcomes for plans, manufacturers, and the federal government.¹

“We found that as the OOP costs for insulins declined, insulin users were more likely to take the medication as prescribed,” continued Taylor. “Patients reported that having a consistent OOP cost for insulin allowed them to better manage their expenses.”

However, as government provisions—like the Inflation Reduction Act (IRA)—are set to evolve in the marketplace over the next few years, many patients and providers are becoming wary of participating in PDPs related to Medicare Part D.³ Furthermore, additional reports have found that the redesign of the IRA may be set to increase patients’ premiums, reduce competition and patient choice, and raise OOP costs.⁴

While the IRA certainly has stipulations related to the PDSS model, the law’s impact on patients’ OOP insulin costs does not outweigh the potential benefits beneficiaries can realize through the recently tested initiative. Health care-related provisions under the IRA also include many other products and services aside from insulin.

Within successful drug-cost models that can truly make a socioeconomic difference, equitable access to insulin and the providers that dispense it is crucial for patients with diabetes. While ongoing provisions under the IRA create complexities in pharmacy benefit management for Medicare plans, results like those from the current report highlight that there is a bit of light at the end of the tunnel when it comes to patients’ ability to afford medication.

“Future drug models might extend the application of lower cost-sharing to other drugs and drug types to determine whether similar impacts on costs and quality might occur,” concluded report co-author Dmitry Khodyakov. “Our results suggest this approach could have value for both patients and payers.”

READ MORE: Senior Care Pharmacy Coalition: Passing HR 5031 Vital for Seniors’ Medication Access

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REFERENCES

1. Program to reduce insulin costs for Medicare beneficiaries has cut spending, improved diabetes care. News Release. RAND Health Care Communications. September 22, 2025. Accessed September 23, 2025. https://www.rand.org/news/press/2025/09/program-to-reduce-insulin-costs-for-medicare-beneficiaries.html

2. Taylor E, Khodyakov D, Buttorff C, et al. Part D Senior Savings Model Final Evaluation, 2021 to 2023. RAND Health Care Communications; 2025. Accessed September 23, 2025. https://www.cms.gov/priorities/innovation/data-and-reports/2025/pdss-final-eval-rpt

3. Nowosielski B. Pharmacy owners say they are unable to participate in MDPNP. Drug Topics. September 6, 2025. Accessed September 23, 2025. https://www.drugtopics.com/view/pharmacy-owners-say-they-are-unable-to-participate-in-mdpnp

4. Inflation Reduction Act sends Part D premiums sky high. Council for Affordable Health Coverage. July 16, 2024. Accessed September 23, 2025. https://cahc.net/inflation-reduction-act-sends-part-d-premiums-sky-high/