When Colorado earlier this year became the first state in the country to cap the price that some people will pay for insulin starting next year, skeptics questioned whether the change would raise insurance prices for everybody else.
The answer, according to regulatory filings from insurance companies, is no.
The Colorado Sun reviewed the documents that 21 health plans submitted to the state Division of Insurance to justify their proposed 2020 rates for the individual and small-group markets. Most plans didn’t mention the insulin caps at all as being a factor in their calculations. When they did, they used words like “negligible” and “de minimus.”
“It is expected that the cost sharing caps will have a de minimus impact on rates,” Kaiser Permanente wrote in the filings for its plans.
Insurers do have some concerns about the new law — mostly with how the Division of Insurance has proposed to implement it. And some advocates for people with diabetes warn that it doesn’t reach everyone. In fact, it’s still unclear exactly how many people will benefit.
But, of all the ambitious health care bills passed at the legislature this year, the insulin caps are receiving perhaps the most national attention as an idea that could be implemented elsewhere. Rep. Dylan Roberts, an Avon Democrat whose brother died following a diabetic seizure and who sponsored the bill, said lawmakers in four other states have already introduced versions of the idea in their legislatures.
Leaders from more than 20 other states have also called him looking to learn more, he said. And a regulatory change from the Trump administration this summer has opened the door for such policies to benefit more people.
People like Anne Karcich.
“A wonderful thing”
Karcich has been living with diabetes for 48 years, she said.
“If I don’t take insulin, give me a week and I’ll be dead,” she said.
But the costs add up. One bottle of insulin for her costs about $230, and she needs two and a half bottles a month, pushing the monthly total above $500. Costs related to her insulin pump add on more. And, as someone who buys insurance on her own, she already pays $670 a month in premiums.
“Fortunately, my husband and I are in good shape, and we can afford to do it,” she said. “But there are a lot of people who aren’t, and it’s awful.”
The new law will cap her out-of-pocket costs at $100 for a 30-day supply of insulin starting in 2020. The law will save her more than $400 per month, she said.
“I was absolutely thrilled about it,” she said. “I think it’s a wonderful thing.”
Concerns about implementation
The new law doesn’t apply to everyone with diabetes, though. The law only covers people with private health insurance — so those on government programs like Medicare won’t benefit. People whose insurance comes through employers that use a self-funding model, so-called ERISA plans, also may not benefit.
That has caused some advocates for people with diabetes to caution that the Colorado approach can’t be the only solution to helping patients struggling under high insulin prices.
In comments on proposed rules for implementing the new law, the group T1International wrote to the Division of Insurance that people not covered by the law “will still be subject to paying the unconscionable prices for the insulin they need to survive.”
“This law does not sufficiently cover all people with diabetes or using insulin in Colorado,” the group’s letter stated.
Until this summer, it looked like the law also wouldn’t benefit another big swath of Coloradans — people on so-called high-deductible health plans that come with health savings accounts.
The Internal Revenue Service has rules for those plans that require people in them to pay full cost for most medical treatment up to a minimum annual deductible amount. For that reason, insurers had asked Colorado regulators to exempt the high-deductible plans from the insulin caps.
But, in July, the IRS classified insulin as a preventative treatment, exempting it from the deductible requirement. A spokesman for the state Division of Insurance said regulators now expect people with high-deductible plans to benefit from the caps.
That leaves implementation as the main concern for insurance companies.
When regulators sought public comment on their proposed rules that go along with the law, insurers zeroed in on a section where the rules talk about a $100 limit on charges during a 30-day period, not just for a 30-day supply. Patients who refill a prescription early to make sure they don’t run out could then force insurers to eat the whole cost of that second prescription, they argued.
“The Division is effectively adding language to the statute that the General Assembly did not include,” a lawyer for the Colorado Association of Health Plans wrote in a letter to regulators.
But other comments struck a different tone.
“Amazing progress for the state of Colorado,” Christine Fallabel, with the American Diabetes Association, wrote in an email to the state. “First, but very important, step.”