Diabetics with state-regulated health insurance would pay no more than $50 a month out of pocket for their prescription insulin — saving potentially hundreds of dollars — under a proposal New Jersey lawmakers hope will increase access to the lifesaving medicine and protect patients against financial hardships.
The Senate Commerce Committee unanimously approved a bill Monday that would cap patients’ copay and coinsurance costs for the drug, prohibit insulin coverage from being subject to any annual deductible — meaning patients could access these benefits without first spending on other health care costs — and require insulin manufacturers to submit to state regulators annual reports on their pricing process and strategy.
As drafted, the measure only applies to health insurance plans regulated by the state, including those sold on the Affordable Care Act marketplace it is creating, as well as policies that cover some state and other public workers. In total, this represents approximately 2.2 million out of more than 8 million state residents with health insurance, since most of these policies are actually regulated by federal law, not state.
The bill’s sponsors, who include Senate President Steve Sweeney (D-Camden), said the legislation is needed because prescription insulin — which helps diabetics control blood sugar — doubled in cost between 2012 and 2016 and rose 700% over the past two decades. The disease impacts more than one in 10 New Jersey adults and can lead to blindness, heart disease, kidney failure, limb amputations and more, if untreated.
Drug companies have supported similar efforts to cap consumer costs, like one Gov. Phil Murphy signed earlier this year, which requires insurers to offer plans with low out-of-pocket costs for prescriptions. But some health care stakeholders have raised questions about the bill, suggesting that while it may protect consumers, it fails to address the high prices that are the root of the problem.
Singling out insulin
Business interests and public worker unions — the entities that sponsor insurance for the individuals impacted — worry about the impact a copay cap could have on their costs, which could increase if consumers are paying less for insulin; as drafted, the bill would apply to businesses and individuals in state-regulated insurance plans and some public workers, including teachers. Stakeholders also question why insulin should be singled out for protection, when many drugs are considered lifesaving treatments.
But medical providers like Dr. Jubril Oyeyemi, a Virtua Health physician who runs a free clinic in Cherry Hill, said concerns about paying for insulin are common among the patients treated there. Some brands of insulin cost more than $500 per month, according to recent reports, but even lower-cost options at $100 a month can be out of reach for some families.
“Some folks still can’t afford that,” Oyeyemi said Monday at a separate press conference in Trenton about two other legislative proposals to address rising drug costs. “And when folks don’t have their insulin, they end up in the hospital” with more complex and costly conditions to treat, he explained.
The bill the Senate Commerce Committee approved yesterday, is modeled on a Colorado plan enacted last year that limits patients’ out-of-pocket costs to $100 for a monthly supply of insulin. While the Garden State proposal started with a $100 monthly cap, it was amended to $50 before the hearing. It will require several more votes in the Legislature before Murphy could sign it into law.
Lawmakers in seven other states — including New York and Pennsylvania — are considering similar proposals, according to Bloomberg Law, and legislators in a half-dozen more are drafting legislation. While most call for a $100-a-month cap, Massachusetts is seeking to limit consumer insulin costs to just $25 a month, Bloomberg notes.
Diabetes adds greatly to state’s health care tab
Nationwide more than 7 million individuals with diabetes require insulin injections regularly, according to the American Diabetes Association, including many of the 860,000 estimated diabetics in New Jersey. (Not all cases require the same treatment and nearly one-quarter have not been diagnosed.) Nearly 2.5 million more Garden State residents are considered pre-diabetic, with blood sugar levels that are above normal but not yet high enough to be diagnosed with diabetes.
The disease adds significantly to the state’s health care tab, the association notes. Diabetes cost New Jersey $6.7 billion in direct medical costs in 2017 and another $2.5 billion from lost productivity and other associated expenses, the group found. People with diabetes face medical expenses more than twice as high as those without the diagnosis.
At the commerce committee hearing Monday, a representative for the diabetes association offered support for the bill, but said additional disclosure requirements added as part of the amendment should include pharmacy benefit managers and others in the drug “supply chain,” not just drugmakers. The Medical Society of New Jersey also supported the measure while the New Jersey Education Association was opposed, calling for the measure to be reviewed by a committee that enables union members to weigh in.
“We do recognize there is a cost problem with insulin. The price of insulin has risen dramatically over the past ten years,” said Ward Sanders, president and CEO of the New Jersey Association of Health Plans, which represents insurance companies, testified before the committee; his group had not yet seen the amended bill. “This is an insurance-based solution. We do hope that other solutions get at the underlying cost, which is the driver of this challenge.”
The bill (S-526) — sponsored by Sweeney, health committee chair Sen. Joseph Vitale (D-Middlesex) and commerce committee chair Sen. Nellie Pou (D-Passaic) — would revise a 1995 law requiring state-regulated health insurance plans to cover diabetes testing and treatment supplies so that it would also limit out-of-pocket costs for prescription insulin.