New state laws designed to cap how much patients pay for insulin may sound promising and hopeful, but there are strings attached.
Advocates fighting the insulin pricing crisis in America say that information around these laws has been misleading. Many lawmakers hail these bills as a solution while failing to acknowledge just how few people can actually benefit.
DiabetesMine has heard from people with diabetes (PWDs) who have shown up at a local pharmacy expecting a lower price tag, only to face pharmacist confusion and high prices because their insurance plan isn’t impacted by a new copay cap law.
Other examples include people who have gone so far as to move to a new state to take advantage of a price cap law, only to discover they’re not eligible for the discount.
“There has definitely been a lot of confusion regarding the copay cap laws that are being passed,” said Illinois diabetes advocate Jennifer Ladisch-Douglass, who has advocated for the state’s 2020 copay cap as well as measures to strengthen that law. “They do help a lot of people, but the information shared has been confusing.”
In 2019, Colorado became the first state to pass into law an insulin copay cap, spearheaded by Rep. Dylan Roberts who previously led other insulin pricing transparency legislation in memory of his late brother who lived with type 1 diabetes (T1D). Many other states have followed suit.
The American Diabetes Association (ADA), which tracks the legislation and enacted laws, reports that 15 states and Washington D.C. had passed these types of laws by March 22, 2021.
Insulin copay caps
These states have passed an insulin copay cap law, per the American Diabetes Association, as of March 22, 2021:
- Colorado ($100 cap for 30-day supply)
- Connecticut ($25 cap for 30-day supply of insulin or other diabetes medications, $100 cap for 30-days’ worth of devices and supplies)
- Delaware ($100 collective cap for 30-day supply)
- District of Columbia ($30 cap for 30-day and “collective” family cap of $100)
- Illinois ($100 collective cap for 30-day supply)
- Kentucky ($30 co-pay, no matter the quantity or insulin type)
- Maine ($35 cap for 30-day supply)
- Minnesota ($35 cap for 1x per year emergency 30-day supply; $50 cap for 90-day supply)
- New Hampshire ($30 cap for 30-day supply)
- New Mexico ($25 cap for 30-day supply)
- New York ($100 cap for 30-day supply)
- Utah ($30 cap for 30-day supply)
- Vermont ($100 collective cap for 30-day supply)
- Virginia ($50 cap for 30-day supply)
- Washington ($100 cap for 30-day supply)
- West Virginia ($100 collective cap for 30-day supply)
Many other states are working on their own versions of these copay caps, sometimes as stand-alone legislation or also packaged with other bills.
“I don’t see them doing any harm,” said George Huntley, leader of the national Diabetes Leadership Council (DLC) and Diabetes Patient Advocacy Coalition (DPAC) who lives with T1D himself.
“(But) I haven’t seen too many people declaring victory on drug pricing or even insulin based on these bills. The diabetes community should be in favor of these as they arise, but also keep our eyes on the larger prize of rebate reform at the national level.”
What has not been clearly communicated, advocates say, is the two big sticking points of these laws:
- these copay caps don’t apply to those without insurance
- they don’t apply to most insurance plans, meaning just because you happen to live in a state that has a copay cap law, and you have insurance coverage, doesn’t mean the new law applies to you
States are only able to regulate their own insurance plans, such as those offered by state government agencies to employees, churches, or other specific state-designed plans offered only to particular groups.
But the reality is that more than 60 percent of job-offered insurance plans across the country are federally regulated by something known as ERISA, or the Employee Retirement Income Security Act of 1974.
That federal law sets minimum standards for most of the employer-provided health and retirement plans. These are “self-funded” plans governed by ERISA, meaning the employer takes on some of the financial responsibility for the plans it offers.
As a result, PWDs with these ubiquitous ERISA-governed plans are not able to take advantage of the insulin copay cap within their particular state.
Yet, you wouldn’t know that by reading some of the mainstream media coverage on this proposed legislation and enacted laws, or by listening to some of the state lawmakers touting these measures.
“I think the important message is communicating clearly who these bills impact,” said Virginia insulin affordability advocate Hannah Crabtree. “We see a lot of media and politicians messaging these as price caps (for all), but they are not.”
Crabtree said messaging does not communicate how these measures do not apply to most employer-offered (and federally regulated) insurance plans.
“I think this might be where people show up to the pharmacy thinking it applies to them when it doesn’t,” she said.
Data analysis conducted by Crabtree shows that only roughly 25 percent of PWDs would be able to take advantage of a $100 copay cap on insulin. Her data is being used as a resource in addressing these state copay cap issues across the country.
Even for those who are eligible, she notes that some of the new insulin copay caps only apply to each prescription. So if you take more than one brand of insulin each month, you’ll have to shell out separate copays for each one.
According to Crabtree, for an insulin copay cap law to be truly useful, the individual PWD would need to:
- have an insurance plan copay that’s actually above the capped amount in the new law
- not be able to meet their deductible on other diabetes supplies (if you’re meeting the deductible anyway, the copay cap would simply serve as a short-term cash flow help)
- be able to afford the capped copay amount per month per insulin
In Illinois, the second state to pass an insulin copay cap that took effect in 2021, local media captured the confusion under the headline “Law Capping Insulin Prices Leaves Patients Flabbergasted.”
One man reported that he was thrilled to hear about the $100 copay cap from his mom, but when he tried to pick up his insulin at CVS in January, the cost came out to over $400 for a 2-week supply. In total, he paid nearly $1,000 for the insulin he needed. Only after contacting his insurance company did he hear about the limitations of the new state law.
The ADA addresses confusion
- The ADA has information sheets for every state with an insulin copay cap. You can access them by emailing askADA@diabetes.org or calling 800-DIABETES.
- The sheets contain specifics about the individual laws, including copay cap amounts, enactment dates, the scope of those impacted by the law, and contact information for each state agency that can provide additional information and clarification.
Additionally, the ADA sends out action alerts, holds virtual lobby days and education sessions, and shares more detailed information via social media.
Dr. Stephen Ponder, a well-known pediatric endocrinologist in Texas, is aware his state is proposing an insulin copay cap, and he sees that as a positive step forward.
“I certainly support lifting the financial burden of insulin off the shoulders of all families living with diabetes,” he said. “Copay caps are a move forward. Due to the high number of Texas diabetes kids on state insurance programs, this is going to be especially helpful here, in my opinion.”
In Oklahoma, one of the new insulin copay cap laws being proposed comes from state Senator Carri Hicks, who has a son with T1D.
She recognizes that only 10 percent of her state’s insulin-using population would be addressed by her proposed copay cap, but agrees that it’s a step forward.
Her legislation caps a 30-day supply of insulin at $25 as well as a month’s worth of diabetes equipment and supplies at $100.
Beyond that, she’s proposing list price transparency measures on pharma as well as insurers and pharmacy benefit managers (PBMs), and she’s also working on legislation for those without insurance.
“We knew we need multiple pathways to get everyone covered,” she said.
“There is a part of the diabetes community that feels strongly if we just continue making these incremental changes, then it allows people to say ‘See, we’ve addressed insulin pricing!’ even though 90 percent are still seeing high costs. I understand both sides of the conversation.”
Still, action at the state level is not nearly enough according to some advocates around the country.
For example, Michigan Rep. Abdullah Hammoud said this about a $35 insulin copay cap bill introduced in his state earlier in 2021:
“We have an answer today, a solution to those who are struggling with their insulin doses, whether they should buy their next dose of insulin or pay the bill that’s coming in, trying to put food on their table.”
Advocates agree that more sweeping federal regulation is critical.
Also at DPAC, Huntley said they are engaging with policymakers on a potential federal insulin cap bill but it’s too early to know if that will materialize.
In the meantime, the best they can do is continue to push action at the state level on insulin affordability, he said. That may include beefing up existing copay laws.
For example, in Illinois where there is an insulin copay cap, Ladisch-Douglass said she’s working with a state lawmaker to strengthen the law’s provisions and introduce an additional emergency insulin supply bill, similar to one passed in Minnesota in memory of Alec Smith, who died in 2017 as a result of rationing insulin.
“While it does not help all people with diabetes who need insulin, our state legislators are limited in what they can regulate, and they worked hard to make this change,” she said. “Some legislators think we are done and they need individuals to show them that we are not.”
Nothing is “solved” until this issue has been addressed at the federal level, she said.