The Medicare Part D Senior Savings Model is Working. So Let’s Expand It.

The prevalence of a single, prominent, chronic condition among Medicare beneficiaries is staggering: fully one-third of all Medicare beneficiaries have diabetes. As a result, 3.3 million Medicare beneficiaries take insulin.

While Medicare Part D spending on insulin rose 840% between 2007 and 2017, the cost of insulin has remained stubbornly expensive for the people who rely on it to survive. In fact, a 2015 study conducted by the CDC found that 18 percent of older adults with diabetes rationed their insulin in order to save money.

With an eye toward increasing medicine adherence and improving the health of diabetic seniors, pharmaceutical companies came together with government regulators last year to create the Part D Senior Savings Model. Under this program, which has been widely embraced by many Medicare Advantage plans, the price of a month-long supply of insulin was capped at $35.

But why stop there?

The Senior Savings Model has been a success for Medicare, for pharmaceutical companies, for health plans – and for patients. Knowing this, it’s time to create a more expansive Senior Savings Model that would allow more seniors of all income levels to afford the life-saving medications they rely on.

We can achieve this goal by following a 3-part plan:

Make the existing pilot program permanent.
As with many new CMS initiatives, the Senior Savings Model is time limited, and will expire in five years. Research consistently shows that when people can afford their medications, they take them.

At SCAN Health Plan, the Medicare Advantage plan where I head up the Pharmacy Team, we changed our member benefit in 2020 so that the cost of insulin would be covered even during the Medicare Part D coverage gap. With reduced and more predictable monthly costs, we expected to see a higher percentage of our plan members adhering to their prescription regimens. Our internal data confirmed our expectation. Once we implemented these steps, we saw 8 percent more members continue to fill their insulin than before our program began.

Based on the existing Senior Savings Model’s success, we hope that it will be renewed in 2025. And yet, by holding out the possibility that it might not be renewed, we create anxiety on the part of our diabetic patients and make it harder for pharmaceutical manufacturers, insurers and government policymakers to accurately plan for the future. This doesn’t seem right. Let’s accelerate the timeline for making the Model permanent and use the expected cost-savings ($250 million per year) to advance other health initiatives for Medicare beneficiaries with diabetes.

Expand the existing pilot program to include other diabetes medications. Addressing the cost of just insulin is like filling the gas tank in your car but never changing the oil or inflating the tires. For the same reasons pharmaceutical manufactures and policymakers lowered the cost of insulin, we can level costs for other commonly used, but expensive, diabetes medications, including dipeptidyl peptidase IV (DPP-4) inhibitors, sodium-glucose transport protein 2 (SGLT2) inhibitors, and oral glucagon like peptide 1 (GLP-1) receptor agonists.

Explore using this model with other name-brand medications for other chronic conditions.
It’s no secret that insulin co-pays were capped due to public outrage over the cost of this medicine, upon which seven million Americans are dependent. Yet diabetes is only the fifth most common chronic condition among Medicare beneficiaries. People with other chronic conditions, such as heart conditions, neurological conditions, or auto-immune diseases, will encounter the same financial challenges we see in the diabetes medication scenario. With a successful template in place to manage costs, we have a unique opportunity to reduce prescription costs across the board.

Critics of these ideas might say this is Pollyannaish—while we’re capping co-pays on diabetes medicines, why not cap the co-pays on all medications for all people? But this is the wrong question. A better question to ask is, if pharma and government can come together to reduce the cost of insulin for seniors, to what other medications could it apply this model?

It is incumbent upon us, from CMS to pharmaceutical companies to health plans, to collaborate further and develop additional programs like the Senior Savings Model that lead to better health outcomes. Expanding the Senior Savings Model isn’t simply good policy – it’s good medicine for all.

Sharon K. Jhawar, PharmD, MBA, BCGP, is Chief Pharmacy Officer for SCAN Health Plan.