Madison Johnson started “running the insurance gambit” nine years ago when she left her parents’ health care plan. Johnson, 27, lives with Type 1 diabetes. One question that constantly looms over her is how she’ll afford health insurance and medical supplies.
“My health insurance is my life,” Johnson said. Without insulin, she could die from ketoacidosis, a condition where a person’s blood becomes too acidic. Yet the price of insulin has skyrocketed.
The new federal Inflation Reduction Act, in addition to its climate and environmental components, targets some of the high health care costs affecting Johnson.
The act limits the monthly cost of insulin to $35 for seniors; caps out-of-pocket prescription drug costs at $2,000 a year for Medicare enrollees; and gives the government the ability to negotiate prices for the costliest prescription drugs.
The law also aims to combat climate change, dedicating nearly $375 billion during the next decade to incentivize and subsidize technology like solar panels, help improve home energy efficiency, reduce power-plant emissions and decrease air pollution in low-income communities, among other things.
Johnson is executive director of the nonprofit Type 1 United, which organizes camps and community programs for children and adults with Type 1 diabetes. She doesn’t receive health care coverage through her work, so she pays $500 a month for a plan through the Washington Health Benefit Exchange, the state’s health insurance marketplace.
On her current plan, Johnson pays $150 for a three-month supply of insulin. Additional equipment, like her pump and continuous glucose monitor, cost another $200 a month. Without insurance, the insulin alone would cost more than $3,800 for a three-month supply, since she uses a name brand.
High drug prices are one of the main reasons Americans forgo their prescriptions or stretch their existing medication. Johnson has used expired insulin to make it through periods when she didn’t have access to insurance, she said.
Most notably for Johnson, the law extends subsidies for anyone purchasing health care plans through the Affordable Care Act. The subsidies were scheduled to expire at the end of 2022, meaning plans would jump in price and many enrollees would likely drop their coverage. Washington is one of 14 states to run its own health insurance marketplace.
“It would have been a nightmare for all of us,” said Sen. Karen Keiser, D-Des Moines.
Medicare price negotiations will take place gradually, starting with 10 drugs in 2026, an additional 15 drugs in 2027 and eventually 20 more drugs in 2029 and beyond. Negotiations will focus on drugs covered under Medicare Part D that don’t have a generic option or close alternative. There are about 1.4 million people in Washington on Medicare, according to the Office of the Insurance Commissioner.
The federal law dovetails with other state-level action taken against rising health care costs, Keiser said. Washington lawmakers passed legislation that capped insulin co-payments for state-funded plans at $35 for a 30-day supply earlier this year. That policy takes effect in January and expires a year later. It does not apply to all private insurance.
Those protections would not have applied to Medicare enrollees, but under the Inflation Reduction Act, the $35 Medicare copay cap also takes effect next year.
“We’re grateful that this federal bill will now back that up and expand it to Medicare patients,” said Johnson on behalf of Washington #insulin4all, a volunteer insulin-affordability advocacy group.
Keiser also led the effort to establish a state prescription drug affordability board. Starting in 2023, that group will be able to annually negotiate prices for 24 of the costliest name-brand prescription drugs each year. The state board could, in theory, make the results of Medicare’s negotiations available to all Washingtonians.
“Whatever they negotiate with Medicare, you can count on our affordability board insisting on as well,” she said.
Although the state and federal legislation is a good development, Johnson said diabetes advocates are disappointed that Republican senators blocked the $35 insulin price for private insurers. She pointed out that neither the federal nor state policies address insulin prices for uninsured people. As of February 2021, about 6% of Washington residents do not have health insurance.
“It still leaves out the folks who are most likely to be rationing their insulin, which can lead to death,” Johnson said.