What Happens to Out-of-Pocket Costs When Patients with Type 2 Diabetes Reach the Medicare Age?

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In the United States, most people begin enrollment in Medicare at 65 years of age. Currently, little is known about how this change in health insurance affects out-of-pocket costs and adherence for patients with type 2 diabetes (T2D).

In a study recently published in JAMA Network Open, researchers aimed to discover how aging into Medicare impacts out-of-pocket costs and utilization of T2D medications. Additionally, the study examined what happens to these costs and medication usage when individuals with T2D reach the age of 65 years, which is the age when most people enroll in Medicare.

The researchers of the study analyzed prescription drug claims data from the TriNetX Diamond Network between 2012 and 2020. This included 129,997 people in the United States who were living with T2D, following their medication adherence both before and after they turned 65 years of age. According to the researchers, the study adjusted for changes in medication utilization to accurately assess the impact of Medicare enrollment on out-of-pocket costs. The study took place between October 2022 and September 2023, with a focus on patient costs per quarter, utilization of specific drug classes, and the number of claims for these medications.

Results found that once a patient with T2D reached the age of 65 years, out-of-pocket costs skyrocketed. On average, quarterly out-of-pocket costs increased by $23.04, and an increase of $56.36 at the 95th percentile of spending. Medication utilization experienced a small decrease at 5.3%. An additional sample consisting of patients who spent a considerably larger amount found a 5.6% decrease in the number of utilizations, equaling a decrease from 4.43 claims per quarter to 4.18 claims per quarter.

While the decreases were small, they were considered high enough to effect out-of-pocket costs for those with the highest level of spending. The study authors stated that this is a result of increased insulin use for high spenders after they reached the age of 65 years.¹

“Before age 65 years, the majority of insured people were enrolled in commercial plans that, unlike Medicare Part D, featured OOP maximums and no coverage gap; it is these features that likely caused the observed spending increases at age 65 years, especially at the top end of the spending distribution,” reported the study authors. “The increased patient cost burden at age 65 years and a modest reduction in overall T2D drug utilization suggest that as insured people with T2D reach age 65 years (and most enroll in Medicare), there is potentially an increase in nonadherence and diabetes complications. Increased OOP costs are especially concerning for individuals from racial and ethnic minoritized groups and low-income individuals, all of whom are more likely to experience nonadherence and have increased T2D complications and mortality. It is important to note that these increases in spending were found despite the closing of the Medicare Part D coverage gap during the study period.”

The results suggest that as a result of the increased nonadherence, patients with T2D will fail to properly manage their conditions and eventually experience an increase in complications associated with the condition. Moving forward, the authors suggest that the implementation of measures such as capping out-of-pocket costs for insulin and other medications will continue to improve medication adherence and reduce complications. Last year, this process began with a $35 monthly cap on insulin costs.¹

“This study found that patient cost burden for T2D drugs is high and increases as insured people reach age 65 years and most enroll in Medicare,” stated the study authors. “Our results have important implications for the provisions of the (Inflation Reduction Act [IRA]), many of which aim to reduce these costs. Reduced patient cost burden will improve adherence and the management of T2D, likely leading to reductions in T2D complications. In addition, we expect these policies to increase utilization of expensive classes of drugs, some of which are targeted by upcoming Medicare price negotiations.”

The researchers suggested that future studies properly identify the value of new classes of T2D prescription drugs using data from clinical use as opposed to trials. Further, they stated that the implementation of the IRA on out-of-pocket costs should be measured.¹

Reference

1. Patient Out-of-Pocket Costs for Type 2 Diabetes Medications When Aging Into Medicare. JAMA Network. July 9, 2024. Accessed July 10, 2024. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2820895?utm_source=For_The_Media&utm_medium=referral&utm_campaign=ftm_links&utm_term=0709%0924