What is the Part D Senior Savings Model?

Starting in January of 2021, the Centers of Medicare & Medicaid Services adopted the Medicare Part D Senior Savings Model. This was put in place to help safeguard seniors from certain high-cost prescriptions in the coverage gap and beyond.

Unfortunately, many Medicare beneficiaries have difficult financial decisions to make monthly due to rising inflation coupled with drug prices that seem to be ever-increasing. In 2021 a new Senior Savings Model kicked in to start combating the costs. The new model was created with the objective to offset the ever-rising costs of insulin for Medicare beneficiaries.

Throughout this article, we’ll discuss Medicare coverage for insulin and give a brief overview of how Medicare Part D prescription drug plans work. After that, we‘ll cover the new Part D Senior Savings Model. Then we’ll talk about participating plans and pharmaceutical manufacturers that are involved. Finally, we’ll discuss other ways to lower the out-of-pocket costs of your insulin.

RELATED: Diabetes statistics

How do people with Medicare afford insulin?

According to the CDC, more than 37 million Americans are living with diabetes. That is a staggering 11% of the population. As far as Medicare is concerned nearly 32% of beneficiaries are affected by diabetes.

In many cases, these individuals are reliant on taking insulin to control their diabetes. Over the years the cost of insulin has increased steadily. Today it is so high that it’s not uncommon for beneficiaries to choose between their meals or their medication.

The cost of insulin increased by more than 1,000% between 1999 and 2019. Part of the reason for the increase is that there are not that many suppliers of insulin in the United States.

High demand coupled with the complexity of formulation allows pharmaceutical manufacturers to raise prices without much of a repercussion.

The rising costs haven’t slowed down, with out-of-control inflation creeping into every aspect of our lives. But at least with the new Part D Senior Savings Model, there is at least a glimmer of hope on the horizon.

Medicare coverage for insulin

For most Medicare beneficiaries insulin is covered under Medicare Part D. Medicare Part D is coverage for prescription drugs. Most insulins come in a vial and are loaded into a syringe or a preloaded injectable pen.

For beneficiaries that use an insulin pump, their insulin can be covered under Medicare Part B. An insulin pump is covered as durable medical equipment, and the insulin could be covered under Medicare Part B.

Before the Senior Savings Model took effect the insulin costs would vary for beneficiaries based on several factors. One factor is which stage of their drug coverage they are in. In some phases, the cost may be a $35 to $100 copay. In other phases, they would have to pay a percentage of the full cost of the drug. Many times insulin is $300 to $1000 a month, so 25% of the cost is often prohibitive for many people. 

With Part D coverage, regardless of whether you enroll in a standalone Part D plan or receive your drug coverage from a Medicare Advantage plan, you could be responsible for premiums, deductibles, copays, or coinsurance.

Medicare Part D coverage

As mentioned above Medicare Part D consists of several phases of coverage. Each plan has a different formulary, or list of what drugs are covered. All plans are required to cover at least one prescription drug in each therapeutic class. This Medicare Part D coverage phases are:

1. Deductible Phase: You pay the total amount of the prescription until the deductible is met.
2. Initial Coverage Phase: Your plan will help you pay for covered prescription drugs. The plan pays some cost, and you pay a copay or coinsurance.
3. Coverage Gap Phase: The coverage gap phase is also called the donut hole. In this phase, you’ll be responsible for paying 25% of the cost of the drug, and some plans will have coverage for specific prescriptions during this phase.
4. Catastrophic Coverage Phase: The catastrophic phase is where you’ll either pay 5% of the cost for each of your drugs or $3.95 for generics and $9.85 for brand name drugs. You will be charged whichever is greater between the 5% and the standard copay. 

Plans that offer Medicare prescription drug coverage must cover at least as well as the standard coverage outlined by the Centers for Medicare and Medicaid Services.

Since plans can have coverage that’s better than the standard model, some plans don’t require a deductible at all.

The Medicare prescription drug plan you choose to enroll in will determine how much you pay for your insulin copays. Part D plans (PDPs) are provided by qualified insurance sponsors such as SilverScript, Humana, or UnitedHealthcare.

These private insurance companies will administer the prescription drug coverage, including determining which drugs will be covered by the plan’s formulary. Part D plans have an average monthly premium of $33 per month in 2022.

Medicare Advantage drug coverage

Medicare Advantage plans are otherwise known as Part C of Medicare and are an alternative way of receiving your Medicare coverage. These private plans cover the same benefits as Original Medicare and sometimes offer additional benefits not covered by Medicare Parts A or B. The majority of these plans also include drug coverage. The drug coverage on these plans works in the same manner as standalone Part D prescription drug coverage.

Similar to the standalone Part D plans, Medicare Advantage plans are required to follow the standard model and have their own drug formularies.

There are some Medicare Advantage plans that are specifically designed for beneficiaries who have diabetes. These plans are called Special Needs Plans and may provide enhanced coverage for services and medications that are required to treat diabetes.

What is the Part D Senior Savings Model?

The Part D Savings Model is designed to provide Medicare beneficiaries with more choices and the benefit of buying insulin at a cost of $35 or less per 30-day supply. It’s designed to include the same pricing ceiling during all phases of prescription drug coverage.

This Part D Senior Savings Model will keep select insulin costs affordable and predictable. Both Medicare prescription drug plan sponsors and insulin manufacturers have volunteered to participate in the Part D Senior Savings Model.

Beneficiaries then will have plan options that provide insulin price protection. The prediction is that Medicare beneficiaries will save an average of just under $500 per year on this program. To take advantage of the savings, enroll in a Medicare Part D or Medicare Advantage plan that participates in the program.

Which plans are eligible for the Part D Senior Savings Model?

Medicare Advantage plans and Medicare Part D prescription plans allow you to take advantage of the Part D Senior Savings Model.

To find out if your prescription drug plan or Medicare Advantage plan participates in the program you can use the Medicare Plan Finder on Medicare’s website. 

Currently, the rule spells out $35 for a month‘s supply, but there is no listed number of units covered under the model.

Medicare Part D Senior Savings Models FAQs

Which Medicare Part D plans have $35 insulin?

As of 2022, the following 2022 Part D prescription drug plans participate in all 50 states. Each area may have other options available. You can verify the plans participating by going to Medicare’s website and using the Medicare Plan Finder tool.

• SilverScript Plus
• Cigna Extra Rx
• Humana Premier Rx Plan
• Mutual of Omaha Rx Premier
• AARP MedicareRx Preferred
• Wellcare Medicare Rx Value Plus
• WellCare Value Script

Can you use Extra Help with the Senior Savings Model?

Extra Help is another name for the Part D Low-Income Subsidy (LIS) program. This program helps lower the cost of prescription drugs for Medicare beneficiaries with lower incomes and assets. There are several levels of Extra Help that you can qualify for based on your income level.

Partial Extra Help will lower a portion of the drug plan premium and will also have you pay less of your plan’s copay or coinsurance, as well as a reduced deductible if applicable. If the cost of insulin on a participating plan is less than the coinsurance with Partial Extra Help, you’ll pay the Part D Senior Savings Model copay instead.

Full Extra Help reduces the drug plan premium to $0 per month for most plans, and copays will be no more than $4 for generic drugs and $10 for brand-name prescriptions.

Some drug plans have higher premiums. For many people who qualify for the Extra Help program, it’s easy to find a plan that will have a 100% premium reduction.

Since Medicare beneficiaries who qualify for full Extra Help will pay a lower amount than outlined in the Part D Senior Savings Model they won’t really benefit from the model unless they lose their Extra Help.

Will step therapy apply to the Senior Savings Model?

Step therapy is a process that‘s used by drug companies where you must try a less expensive drug before you can get a more expensive drug on the formulary. If the insulin you want is on the formulary but requires step therapy, you’ll need to complete the step therapy process before it’s covered unless an exception is granted. If it’s insulin from a pharmaceutical manufacturer that is participating in the model, the copay should be no more than $35.

Keep in mind that if step therapy is required for the more expensive insulin it doesn’t mean that you will have a $35 copay. This would apply only if both your plan and the pharmaceutical manufacturer are participating in the Part D Senior Savings Model.

Senior Savings Model insulin list

Not all brands of insulin or drug manufacturers have agreed to participate in the model. Below is a list of the participating drug companies. This list is based on the 2022 participating manufacturers. The participating providers for the current year could be different.

• Eli Lilly and Company
• MannKind Corporation
• Mylan Specialty L.P., a Viatris Company
• Novo Nordisk, Inc. and Novo Nordisk Pharma, Inc.
• Sanofi-Aventis U.S. LLC

Remember that not all plans are participating. Use the Medicare Plan Finder found on Medicare.gov to verify if your plan is participating. Part D plans that are available and participating are listed above.

Other ways to save on insulin

Insulin is an important component of managing diabetes. Even though the Part D Senior Savings Model is a step in the right direction, there are still insulins that aren’t available through it, and not all Medicare prescription drug plans are participating.

There are several types of insulin available, and everyone‘s body reacts differently. If you are needing help with insulin savings and your particular insulin or plan doesn’t participate in the new program, there are a few things you can do.

1. If you qualify, apply for the Extra Help program on the Social Security website.
2. Check SingleCare for a free prescription coupon. 

SingleCare discount programs can give you considerable savings on prescription drugs.