Over 7.5 million Americans are insulin-dependent diabetics, and therefore must budget the cost of insulin into their daily lives. Many of them have reported rationing their insulin due to the high cost of the medication, and this practice can be dangerous and life-threating. (https://www.npr.org/2019/05/24/726817332/colorado-caps-insulin-co-pays-at-100-for-insured-residents).

Colorado is the first state to pass legislation (https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_1216_enr.pdf) of this sort. We reached out to a few of our industry contacts and carriers to find out more about how this affects your company and your employees:

• The cap applies to all group health plan situs in Colorado, regardless of where the employee lives. This means that members living outside Colorado on a plan that is sitused in Colorado will benefit from this law.

• Although this law does not directly apply to self-funded plans, some self-funded administrators like Anthem are planning on building the cap into their Anthem Balanced Funding plans.

• The program rolls out in 2020, most likely upon the company’s renewal date.

You may also be wondering how this affects members on High Deductible Health Plans. We blogged in August about the roll out of a new list of medications for certain conditions that will now be considered “preventive,” and insulin for diabetics is included. (https://www.irs.gov/newsroom/irs-expands-list-of-preventive-care-for-hsa-participants-to-include-certain-care-for-chronic-conditions) This means that members on an HDHP do not have to meet their deductible in order to benefit from the insulin price cap. The full list of medications that will be considered preventive can be found here.

Critics of Polis’s move say that while it makes insulin more affordable for diabetics, it may increase premiums as insurance companies are left to pick up the tab. (https://www.cnn.com/2019/05/23/health/colorado-insulin-price-cap-trnd/index.html) With the average cost of insulin tripling in the last decade,  this is certainly a reasonable expectation, but the carriers filing fully insured rate increases for the small groups market this summer with the Colorado Division of Insurance indicated they saw the impact as “de minimus,” according to The Colorado Sun. (https://www.vaildaily.com/news/colorado/critics-worried-colorados-new-law-capping-insulin-costs-would-raise-insurance-rates-it-hasnt/)

In addition to the Colorado law which will apply across carriers, Express Scripts, one of the Nation’s largest Pharmacy Benefit Managers, and Cigna are rolling out their “Patient Assurance Program”. This program will cap the cost of a 30-day supply of insulin at $25. (https://www.npr.org/sections/health-shots/2019/04/03/709212404/express-scripts-takes-steps-to-cut-insulins-price-to-patients). This program will apply regardless of funding arrangement. 

If you have further questions or would like more details regarding your group’s specific carrier provisions and the new Colorado Insulin Price Cap law please reach out to your Fall River Client Manager.