How and Why a $35 Insulin Price Cap Failed in the Senate

Days ago, the United States Senate voted to reject a new law that would limit what many Americans pay for insulin. But on the same day, it approved a related measure that should considerably reduce insulin costs for people with diabetes on Medicare.

Here’s what you need to know:

What Happened

On Aug. 7, the United States Senate passed the Inflation Reduction Act of 2022. It’s a huge bill, affecting tax, energy, climate, and healthcare policies. It is expected to be approved in the House as soon as today.

The Act is essentially an update of the failed Build Back Better Act, which originally faltered due to opposition from Democratic Sens. Joe Manchin and Kyrsten Sinema. Manchin helped rework the failed bill quietly, and its resurrection was considered a major surprise and a political win for Democrats.

The text of the bill that Democrats brought to the floor included provisions to cap insulin copays at $35 for two patient groups: those on Medicare, and those with private insurance. But after voting, only the first of these provisions made it into the final version.

In summary:

Medicare recipients will pay a maximum of $35 per month for insulin, beginning in 2023.
A proposal to similarly limit copays for patients on private insurance was defeated.

A Victory for Medicare Recipients

Make no mistake: The new bill is a win for Medicare recipients that require insulin.

Medicare, the national health insurance program primarily for Americans over the age of 65, covers about 60 million people. A lot of them need help. An analysis by Yale academics found that nearly 20 percent of Medicare recipients that use insulin reach “catastrophic” levels of spending to pay for their medicine. The majority of American insulin users that are burdened by catastrophic spending, 61 percent, are on Medicare.

According to data from KFF, the average Medicare user spent $54 out of pocket per prescription in 2020, for a total of $572 per year. But a minority of users pay well over $1,000 annually and should enjoy huge savings from the changes enacted by the new bill.

The legislation will also limit annual out-of-pocket spending on prescription drugs to $2,000. The average American adult with diabetes uses 5.9 different medications, a number that may be even higher among the elderly. It will also allow the federal health secretary to negotiate the price of a small number of important, expensive drugs.

One detail: Individual Medicare insurance plans may only cap a limited number of insulin products at $35, so it’s possible that Medicare users will need to switch medications or insurance plans to enjoy the new discounts.

Defeat for the Private Insurance Copay Cap

Why did the measure capping monthly copayments for insulin users on private insurance fail?

The new legislation was passed using the Senate’s “budget reconciliation process.” That process allows a bill such as this one to pass with a mere 51 votes (50 senators plus the vice president’s tie-breaking vote), and it cannot be prevented with a filibuster. The process, however, also restricts the scope of what a bill is allowed to address to matters of federal spending and revenue.

Copay caps for Medicare recipients directly impact government spending, so that element of the act needed only 51 votes to pass. But copay caps for patients on private insurance are not a federal budget issue, and so the Democrats needed 60 votes for that element of the bill to pass.

Seven Republicans voted in favor of the insulin proposal for patients on private insurance, and 43 voted against it, defeating the measure. Those 43 have since met with “vehement backlash” and plenty of social media shaming.

Why did 43 Republican senators vote against it? As far as we’re aware, no major American politician is on record as stating that the high cost of insulin isn’t a problem worth solving. Several of the Republican senators described their nay votes as a rebuke to Democrats for inappropriately including the measure in the bill in the first place, while also stating that they preferred different solutions to the insulin affordability crisis.

A Silver Lining?

The truth is that the failed insulin proposal wasn’t quite everything that some said it would be.

The bill would not have actually reduced insulin list prices, just copays. That means that the uninsured would have continued to pay immense prices for their life-saving medication. There are about 30 million Americans without health insurance, nearly 10 percent of the nation. These are the unfortunate minority that need the most help, and the original proposal in front of the Senate did nothing to address their issues.

An analysis by Peterson-KFF suggests that only about 25 percent of people with private or employer insurance would save money under a $35 copay cap, suggesting that a majority of the people directly covered by the failed proposal didn’t really need the help.

Some progressive insulin affordability advocates, echoing Republican senators, even accused Democrats of trying to score points and ignoring the plight of the uninsured.

Meanwhile, conservative voices such as the National Review and The Wall Street Journal have argued that copay limits only make the root cause of spiraling insulin prices even worse.

Writer Annalisa Merelli suggested that the measure would have actually done more harm than good, by “[hiding] the actual price of insulin from privileged patients with private insurance,” thereby diluting support for legislation that could meaningfully help those without insurance. In this reading, the defeat of the measure could have actually been a good outcome, if it makes it more likely that a more comprehensive federal solution — one that addresses insulin prices, and not just copayments — is eventually passed.

Looking Forward to New Insulin Legislation

Senate Majority Leader Charles Schumer has promised that Democrats will bring the $35 non-Medicare cap back for another vote.

It is possible that a new vote could have a different outcome. The fact that as many as seven Republican senators have already supported the measure suggests that senators were not directed (or “whipped”) to defeat the measure by Senate Minority Leader Mitch McConnell. Perhaps the outrage and enhanced scrutiny can convince three or more senators to change their stances. Sen. Chuck Grassley, one of the 47 Republicans to vote against the insulin provision, has already thrown his support behind bipartisan insulin legislation brought forth by Sens. Susan Collins and Jeanne Shaheen.

Americans across the board, no matter the affiliation, support limits on insulin prices. Fifteen states have already passed their own copay caps, in blue states and red states alike. It would seem that bipartisan cooperation should be possible, but the history of national efforts is not encouraging.

It’s unclear what will happen next. Schumer previously indicated that he wants to take up even more comprehensive legislation that would reduce costs for the uninsured as well as the insured. That effort should sound commendable to the diabetes community and insulin affordability advocates, but it would probably be less likely to win bipartisan support.




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