Lower-income people in at least one state saw higher out-of-pocket costs for diabetes drugs if they were enrolled in a subsidized private health insurance plan through the state’s Marketplace than if they were enrolled in Medicaid, according to a new study published in the journal JAMA Network Open.
Under the Affordable Care Act (ACA) — the landmark federal health care law enacted in 2010 — states received strong financial incentives to expand their Medicaid programs. Medicaid is a joint federal-state public health insurance program for low-income people, funded largely by the federal government but administered separately by each state. The ACA extended eligibility for Medicaid in states that expanded the program to all adults with an income below 138% of the federal poverty level, which varies based on family size. It also created subsidies for people buying private insurance on their state’s online Marketplace, or on the federal Marketplace (HealthCare.gov) for states that chose not to operate their own insurance exchange. Those Marketplace subsidies are based on a formula that compares the cost of a “benchmark” insurance plan in the state with the person’s income. Typically, subsidies aren’t available to anyone with an income above 400% of the federal poverty level, but that cap was removed by Congress for 2021 and 2022. You can’t enroll in a subsidized Marketplace plan if you qualify for Medicaid in your state.
For the latest study, researchers were interested in looking at prescription drug costs in lower-income people with diabetes, depending on what kind of health insurance plan they were enrolled in. They used data from 22,788 Colorado residents with diabetes in 2014 and 2015, with all participants’ income falling between 75% and 200% of the federal poverty level. Drug categories in the study included insulin, metformin, sulfonylureas, DPP-4 inhibitors, SGLT2 inhibitors, and GLP-1 agonists.
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Out-of-pockets costs higher for diabetes drugs under Marketplace plans than Medicaid
The researchers found that out-of-pocket costs were higher for all diabetes drug categories under Marketplace plans compared with Medicaid — with the largest difference in cost seen for categories of drugs that don’t have any generic options, meaning that they’re only available from the original manufacturer under a brand name. That applies to SGLT2 inhibitors, with an average cost difference of $20.72 per month; DPP-4 inhibitors, with an average cost difference of $21.93 per month; and GLP-1 agonists, with an average cost difference of $50.03 per month. For metformin, the average cost difference was only $3.72 per month, and for sulfonylureas, it was $3.36 per month.
For insulin, the cost difference between health insurance plan types varied widely depending on the specific brand and formulation of insulin. The biggest cost difference was for Humalog, costing an average of $31.70 more per month under Marketplace plans. The smallest cost difference was for Novolog 70/30, which cost an average of $0.64 per month more under Medicaid — the only example in the whole study of a drug having a higher out-of-pocket cost under Medicaid. The second-biggest difference among insulin types was for Lantus, which cost an average of $30.95 more per month under Marketplace plans, followed by Novolog, which cost an average of $23.33 more per month.
The researchers also looked at total costs for each type of diabetes drug — meaning the entire cost paid under the insurance plan, not just out-of-pocket costs. For private plans, the portion of a drug’s total cost that isn’t covered by out-of-pocket costs is largely passed on in the form of higher premiums, some of which is paid for by taxpayers through Marketplace subsidies. For Medicaid, that cost is largely paid directly by taxpayers. For non-insulin drugs, the monthly difference in total costs — always higher under Marketplace plans — ranged from $1.11 for sulfonylureas to $361.19 for GLP-1 agonists. For insulin types, the monthly difference in total average costs ranged from $86.78 more under Medicaid for Novolin 70/30 to $160.06 more under Marketplace plans for Humalog.
“We found large savings in out-of-pocket costs for diabetes medications among those enrolled in Medicaid compared with those enrolled in Marketplace insurance plans,” the researchers concluded. “Although policy makers have voiced concerns about the scope of coverage in Medicaid compared with private insurance, in our study, this patient population with low income and at high risk of negative health outcomes appeared to have better access to newer (and more expensive) medications in Medicaid than in Marketplace plans and less financial burden in filling those prescriptions.”
Want to learn more about saving on your diabetes care? Read “Save Money on Medicines,” “How Your Healthcare Team Can Help You Save on Medications” and “Do’s and Don’t’s for Saving Money With Diabetes.”
