Does Medicare Pay for Insulin and at What Cost?

According to the Centers for Disease Control and Prevention (CDC), more than 37 million American adults have diabetes. Thankfully, insulin has been used to treat it for nearly a century. The problem is that the cost of insulin is skyrocketing. This can make it challenging for people to afford it.

Certain insulins are covered by Medicare Part B and others by Part D. That does not mean they are free. Each plan has their own out-of-pocket costs, from deductibles to copays to coinsurance. According to a recent Yale study, as many as 9.4% of Medicare beneficiaries who use insulin spent more than 40% of their yearly income on the drug!

It's important to find ways to decrease insulin costs so that you can get the care you need. This could mean changing to a different kind of insulin or choosing a plan that provides lower cost options. This is what you need to know.

Medicare covers insulin
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A Brief History of Insulin

When Canadian physician Frederick Banting and his team discovered insulin in 1921 and patented it in 1923, their life-saving treatment changed the world. They sold the patent to the University of Toronto for $1, hoping this would prevent people from profiteering off a condition that was once a death sentence.

Unfortunately, the University of Toronto gave pharmaceutical companies the right to produce insulin royalty-free. It was assumed that not having to pay royalties would allow them to produce the drug without restrictions and that would result in lower costs for patients. That's not how it turned out.

Instead, each company made their own version of insulin and patented it. Then came the era of price-fixing. Because there was limited competition, the few companies that made insulin kept driving up the price for profit. The Health Care Cost Institute reported a doubling of insulin costs between 2012 and 2016. According to the American Diabetes Association, the price of insulin also rose by 55% between 2014 and 2019.

The Different Types of Insulin

Not all insulins are created equal. There are traditional human insulins and then there are analog insulins. Analog insulins are a type of human insulin that has been genetically altered. These changes affect the pharmacokinetic properties of the drug. These properties can include how fast a type of insulin takes effect, how long it acts in the body, and how steady it remains in the bloodstream.

Packaging of the insulin also comes into play. Some insulins come in vials and require that patients draw up their insulin into syringes. For those who may not have the dexterity to draw up their own insulin, for those who have impaired vision that could affect their ability to draw up an accurate dose, or for those who prefer the convenience, insulin pens are available. In these cases, pens have the insulin already drawn in them. The patient need only to set the desired amount to inject and administer the drug.

Costs vary with each of these options. Vials of insulin cost considerably less than insulin pens. On average, traditional insulins cost a fraction of the cost of analog insulins because their patents expired in 2000 and generic options are now available. That is not to say that they are inexpensive.

Less Expensive Insulin Options

Noting the cost difference between traditional and analog insulins, one insurance company decided to take action. CareMore, a subsidiary of Anthem Inc., is one of the insurers that offer Medicare Advantage and Part D plans. They pursued a healthcare intervention across four states (Arizona, California, Nevada, and Virginia) that spanned three years. Their results were published in the Journal of the American Medical Association in January 2019.

More than 14,000 patients who took insulin were included in their intervention. Specifically, the goal was to transition people on analog insulin to traditional human insulin and to do so with the fewest number of insulin injections per day. This would not only offer convenience, but it would also decrease overall costs and reduce the risk a beneficiary would get caught in the Part D coverage gap known as the donut hole.

The biggest question was how a change in insulin would affect a patient's health. In theory, the pharmacokinetics of the newer analog insulins make them less likely to cause severe swings in their blood sugars, either too low (hypoglycemia) or too high (hyperglycemia). Changing to a less effective insulin option could, in theory, cause their diabetes to be more poorly controlled.

As it turns out, the hemoglobin A1C (HbA1C) level (a laboratory estimate of your blood sugar levels over two to three months) did not change all that much. Patients who switched to human insulin had comparable HbA1C to those on analog insulin. Of note, there were not more episodes of hypoglycemia or hyperglycemia in the intervention group. This study suggests that changing to older types of insulin can decrease costs and provide similar glucose control without increasing the risk of side effects.

The Part D Senior Savings Model

In March 2020, the Centers for Medicare and Medicaid Services made a proposal to decrease insulin costs. It was referred to as the Part D Senior Savings Model and it would require participation from private insurers and pharmaceutical companies. Insurers would decrease insulin copays to $35 per month, saving an estimated 66% or more off current prices and pharmaceutical companies would adjust costs and contribute more towards the coverage gap known as the donut hole.

Medicare Advantage and Part D plans could choose to participate in the program. In return, those plans could offer plans with higher monthly premiums. Unfortunately, many beneficiaries still did not have access to these savings options. In 2022, only 38% of Medicare Advantage plans and 33% of Part D plans chose to participate.

While the Part D Senior Savings Model would save Part D beneficiaries on the cost of insulin, it did little to benefit people who use insulin pumps. That's because insulin used in pumps is covered by Part B, not Part D. A recent analysis reports that under this model insulin pump users could potentially pay 50% more than people who get their insulin through Part D.

The Inflation Reduction Act

The effectiveness of the Part D Senior Savings Model has become a moot point with passage of the Inflation Reduction Act. Starting in January 2023, all Part D plans are required to cap each insulin product at $35 per month, i.e., if you use two different kinds of insulin, you would pay no more than $70 per month.

Starting in July 2023, insulin used in pumps will also see a price reduction. Beneficiaries usually pay a 20% Part B coinsurance for insulin used in these pumps. Their monthly costs will now also be capped.

Keep in mind there may also be insulin options that cost less than $35.

Overcharged for Insulin?

Medicare Advantage and Part D plans have until March 2023 to update their systems with the $35 insulin cap. If you are charged more than $35 for your insulin between January and February 2023, your plan is required to reimburse you the difference within 30 days.


The price of insulin continues to rise but Medicare beneficiaries may be able to take advantage of some recent legislative changes. The inflation Reduction Act recently capped the price of insulin products to no more than $35 per month, potentially saving people with diabetes two-thirds or more off current list prices.

Costs could still be high for Medicare beneficiaries who use more than one kind of insulin. The $35 cap applies to each insulin product, not necessarily to all the insulin you need each month. For some people, this could mean $70 per month ($840 per year) for two insulins or $105 per month ($1,260 per year) for three.

With this in mind, it's important to take a look at your insulin regimen. Newer types of insulin, which tend to be more expensive, may not necessarily be more effective than older types of insulin, which may have cheaper generic options available. Studies have shown that transitioning to less expensive options does not necessarily worsen clinical outcomes. You may want to talk to your healthcare provider about your insulin regimen to see if there are more affordable options you could try.

A Word From Verywell

No one should have to decide whether to pay for a medically necessary medication or for life essentials like food and shelter. Unfortunately, many have been forced to do just that. Rising prices have made it harder for people who are uninsured, who have high deductible health plans, and even for people who are on Medicare. Legislative changes are slow in coming but they are coming. The Inflation Reduction Act is a start.

10 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. National Diabetes Statistics Report. Centers for Disease Control and Prevention.

  2. Catastrophic Spending On Insulin In The United States, 2017–18. Health Affairs. July 2022. doi:10.1377/hlthaff.2021.01788

  3. Biniek JF, Johnson W. Spending on Individuals with Type 1 Diabetes and the Role of Rapidly Increasing Insulin Prices. Health Care Cost Institute.

  4. Tseng CW, Masuda C, Chen R, Hartung DM. Impact of Higher Insulin Prices on Out-of-Pocket Costs in Medicare Part D. Diabetes Care. 2020;43(4):e50-e51. doi:10.2337/dc19-1294

  5. Luo J, Khan NF, Manetti T, et al. Implementation of a Health Plan Program for Switching From Analogue to Human Insulin and Glycemic Control Among Medicare Beneficiaries With Type 2 Diabetes. JAMA. 2019 Jan 29;321(4):374-384. doi:10.1001/jama.2018.21364

  6. CMS Launches Groundbreaking Model to Lower Out of Pocket Expenses for Insulin. Centers for Medicare and Medicaid Services.

  7. Medicare Part D: A First Look at Medicare Prescription Drug Plans in 2022. KFF. November 2, 2021.

  8. Brown-Georgi J, Chhabra H, Vigersky RA. The Rising Cost of Insulin for Pump Users: How Policy Drives Prices. J Diabetes Sci Technol. Published online August 6, 2020. doi:10.1177/1932296820947100

  9. Saving money with the Inflation Reduction Act.

  10. Insulin Coverage.

Additional Reading

By Tanya Feke, MD
Tanya Feke, MD, is a board-certified family physician, patient advocate and best-selling author of "Medicare Essentials: A Physician Insider Explains the Fine Print."