Making Sense of America's Chronic Disease Epidemic
By Michael Mandel, PhD, and Kenneth E. Thorpe, PhD
President Biden and lawmakers in both parties have prioritized slashing Americans' out-of-pocket spending on insulin. And they recently made significant strides by including a $35-a-month co-pay cap for insulin for Medicare beneficiaries in the Inflation Reduction Act.
But as promising as these cost-reduction measures are, they raise a key question: Why limit the co-pay price caps to just insulin? Nearly two million Nevadans live with at least one chronic condition and 693,000 are living with two or more. For seniors on Medicare, chronic disease prevalence is even higher and, for millions with fixed incomes, out-of-pocket costs are increasingly problematic.
If a $35-a-month co-pay cap makes sense for insulin -- and it does -- why not implement the same policies for medicines that treat asthma, hypertension, and other common chronic conditions and focus on Medicare where chronic diseases are so prevalent?
Too many seniors struggle to afford the medications they need to stay healthy. According to the Department of Health and Human Services, more than five million Medicare beneficiaries had difficulty affording prescription medications in 2019. These struggles ultimately impact adherence to doctor-prescribed courses of treatment, health status, and overall wellbeing. Indeed, in Nevada, 31% of adults have failed to fill a prescription or deviated from their treatment regimen because of cost concerns.
When people deviate from their prescribed medication regimen, the health consequences can prove dire. Drug non-adherence is estimated to cause 125,000 deaths each year in the United States and accounts for 10% of all hospitalizations.
Capping the out-of-pocket cost of insulin at $35 is a step in the right direction. But given the scope of the affordability crisis, limiting these types of measures to a single class of medications aimed at treating a single illness undercuts both the human and economic saving potential.
Recognizing this concern, lawmakers -- as part of the Inflation Reduction Act -- passed a $2,000 annual limit on out-of-pocket spending on medicines starting in 2025. Once Medicare beneficiaries spend this amount at the pharmacy, they will not have to pay a penny more for drug costs that year.
But a $2,000 annual cap is still far too high. The most direct, and effective, way to help the millions of Medicare beneficiaries living with chronic conditions afford their medicines is to cap the out-of-pocket cost of common chronic disease drugs.
This approach would save countless lives, while also potentially reducing other healthcare expenditures in Medicare, like hospitalizations. By one estimate, medication non-adherence alone costs our health system as much as $289 billion annually. The policy would also give seniors some much-needed and very visible financial relief at the pharmacy counter during a period of record-high inflation.
More than half of Americans supported making a $35 insulin cap a top priority and passing a strict limit on the cost of insulin for patients is a commendable start. A more expansive version of this policy to help Medicare beneficiaries is likely to garner even broader support. By offering the same assistance to people with Medicare living with diabetes and other common chronic diseases, lawmakers can save even more lives and give seniors and their families the kind of bold action on prescription drugs they seek.
Michael Mandel PhD is Chief Economist and Vice President of the Progressive Policy Institute. Kenneth E. Thorpe PhD is a professor of health policy at Emory University and Chair of the Partnership to Fight Chronic Disease.
