Powered by Q1Group LLC
Education and Decision Support Tools for the Medicare Community

How does the purchase of a Medicare Part D insulin affect my 2023 drug plan's deductible?

Category: Insulin and Diabetic Supplies
Updated: Feb, 28 2023

Insulin products covered by a Medicare Part D plan will always cost $35 or less for a 30-day supply, but, in 2023, when purchased in the initial deductible, the deductible will be reduced by the insulin product's total negotiated retail drug cost.

As background, starting in 2023, the Inflation Reduction Act (IRA) provides that all Medicare drug plans will offer insulin products found on the plan's formulary at a copay of no more than $35 for a 30-day supply – even if the Medicare drug plan has an initial deductible.

The IRA insulin coverage applies to both stand-alone Medicare Part D plans (PDPs) and Medicare Advantage plans that include drug coverage (MAPDs) and keeps the $35 or less cost-sharing throughout all phases of coverage including: the plan's Initial Deductible, Initial Coverage phase, and the Coverage Gap (or Donut Hole).  Even if a Medicare beneficiary has high prescription costs and reaches the final Catastrophic Coverage phase, they will still pay $35 or less for covered insulin for the remainder of the year.

However, since the Inflation Reduction Act was passed so late in 2022 – after Medicare Part D plans had already designed and submitted their 2023 plans – insulin coverage in 2023 will be handled slightly differently than Part D insulin coverage in future years.

Question:  How do low-cost Tier 1 and Tier 2 drugs excluded from the deductible compare to how a 2023 Medicare plan's Insulin products are covered in the deductible?

Many 2023 Medicare Part D prescription drug plans already exclude low-cost Tier 1 and Tier 2 drugs from the plan's deductible, and this means that a plan member has immediate coverage of these low-cost formulary drugs without first meeting the plan's deductible.

For example, if a person's Medicare Part D plan has a $505 deductible and Tier 1 drugs are excluded from the deductible, when the person purchases a Tier 1 generic that has a $20 retail cost and a $2 copay, the person pays just the $2 copay and the plan's $505 deductible remains unchanged.

However, unlike a low-cost Tier 1 or Tier 2 drug excluded from the plan's deductible, in 2023 the purchase of a formulary insulin product will cost no more than a $35 copay for a 30-day supply, but reduce a person's initial deductible by the total retail cost of the insulin product.

As an example, if a Medicare drug plan's negotiated retail cost for insulin is $200 and a person has not yet met the 2023 deductible of $505, the person will pay no more than $35 for the formulary insulin product.  However, the person's initial deductible will be reduced by the $200 retail insulin cost – and so the remaining deductible would now be $305 ($505 - $200).  The $200 retail cost would also count toward the Medicare beneficiary's total out-of-pocket spending.

As noted by Medicare:
"If someone with Medicare fills a prescription for a Part D covered insulin product before meeting the Part D deductible, their cost-sharing amount (up to $35 maximum for a month’s supply) will be applied to their deductible. Under the prescription drug law, a person with Medicare isn’t required to meet the Part D deductible before Medicare will cover a Part D covered insulin product or recommended preventive vaccine, and recommended preventive vaccines have zero cost sharing.

In addition, for plan year 2023, under the prescription drug law, the amount Medicare pays for a covered insulin product or recommended preventive vaccine that would otherwise have been paid by the Medicare enrollee (i.e., if the law’s cost sharing caps did not apply) will also count toward the person’s deductible and total True Out-of-Pocket (TrOOP) costs, and will count toward the person’s progression into the catastrophic phase of the Part D benefit." [emphasis added]

Important:  What if you paid more than $35 per month for your covered insulin product?

If you paid more than $35 for a 30-day supply of a covered insulin, contact your 2023 Medicare plan and ask about reimbursement – the toll-free telephone number for your plan's Member Services department can be found on your Member ID card and most of your plan's printed information.

Again, since many 2023 Medicare Part D plans may need time to update their internal systems to accommodate the new insulin law, Medicare will allow plans a 3-month grace period to correct their systems and reimburse their plan members for any over-payment.

As noted by Medicare in guidance to Medicare Part D plans:
"Section 1860D-2(b)(9) of the Social Security Act (the Act), as added by section 11406 of the [Inflation Reduction Act], imposes a $35 monthly limit on cost sharing for covered insulin products throughout all phases of the Part D benefit.

Subparagraph (E) of new section 1860D-2(b)(9) provides a three-month period (January 1, 2023 through March 31, 2023) during which a Part D sponsor may retroactively reimburse beneficiaries within 30 days for amounts paid in excess of the $35 cost sharing maximum in the event that the Part D sponsor has not yet adjusted its claims adjudication systems to implement the new insulin benefit at the point of sale. During this time, a beneficiary may pay the higher plan cost sharing at the point of sale, and the plan must refund the difference between that higher amount and $35 to the beneficiary within 30 days."

(Frequently Asked Questions about Medicare Insulin Cost-Sharing Changes in the Prescription Drug Law
(Updated January 2023), CMS Product No. 12173, January 2023)
and also: https://www.cms.gov/files/document/irasapdeguidance508g.pdf

Medicare Supplements
fill the gaps in your
Original Medicare
1. Enter Your ZIP Code:
» Medicare Supplement FAQs

Browse FAQ Categories

Tips & Disclaimers
  • Q1Medicare®, Q1Rx®, and Q1Group® are registered Service Marks of Q1Group LLC and may not be used in any advertising, publicity, or for commercial purposes without the express authorization of Q1Group.
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
  • We are an independent education, research, and technology company. We are not affiliated with any Medicare plan, plan carrier, healthcare provider, or insurance company. We are not compensated for Medicare plan enrollments. We do not sell leads or share your personal information.
  • Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year. Our PDP-Compare.com and MA-Compare.com provide highlights of annual plan benefit changes.
  • The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
    Statement required by Medicare:
    "We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options."
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
  • Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
  • A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.