Governor’s Proposal to Cancel Insulin Copays is Just What the Doctor Ordered

Governor Kathy Hochul’s call to ban copayments for life-saving insulin represents a marvelous step forward in consumer cost-saving and health equity that puts New York at the vanguard of drug-cost control legislation.

Hochul’s proposal would make New York the only state to eliminate cost-sharing –including copays –for insulin, according to the American Diabetes Association (ADA). The governor also proposes new protections for consumers facing unpaid medical bills. 

More than 10 percent of New Yorkers – about 500,000 people – rely on insulin every day. Many are people of color, seniors, or live in low-income households.  They tend to disproportionately suffer from diabetes complications, including kidney failure, blindness, and loss of limbs.  

Hochul’s insulin initiative, announced in her State of the State speech and included in her budget bill, would ease an important financial burden for New Yorkers buying  insurance regulated by New York State.

Currently, 25 states and the District of Columbia cap insulin copayments between $25 and $100 for a 30-day supply under state-regulated commercial health insurance plans or state employee health plans, according to ADA data. A decade ago, New York was among the original handful of states to limit patient costs for high-priced drugs, capping copays at $100 for a 30-day supply.  

But $100 a month means $1,200 a year.  And these monthly insulin costs force healthcare providers and patients to make difficult choices about life-saving medicine that cut into daily living expenses. The governor wants to do even better by eliminating cost-sharing for other chronic conditions. State lawmakers should support this effort. 

They should also take up the governor’s recommended reforms of the state’s Hospital Financial Assistance Law which would expand protections for patients whose lives are destroyed by unpaid medical bills by limiting the size of monthly payments and interest charged for medical debt. 

But in terms of a high-impact action that immediately advances public health and health equity, the governor’s proposal to eliminate insulin cost-sharing stands out. Diabetes patients typically need a long list of expensive drugs to treat serious conditions that routinely accompany diabetes, such as blood clots, nerve damage, cardiovascular disease, heart failure, autoimmune conditions, foot problems and chronic kidney disease, according to the Centers for Disease Control and Prevention.

Untreated, diabetes is closely tied to strokes and heart disease, which together accounted for 24 percent of all premature deaths (death before age 65) among New York City adults, according to NYC Health+Hospitals Corp. A poll last year by the nonprofit KFF Health News found 31 percent of adults reported not taking their medications as prescribed because of cost. 

Research shows that eliminating cost-sharing for chronic conditions significantly increases patients’ use of prescribed medications, improving their health outcomes and saving the health care system. In 2021, Blue Cross Blue Shield of LA experimented with eliminating co-pays for prescription medications that treat chronic conditions, including insulin. An evaluation found that medical spending decreased by 10 percent, with an average per patient net savings of $63 a month. Naysayers argue that instead of banning copayments for insulin, New York lawmakers should push for more transparency that forces pharmaceutical companies to defend what goes into drug-price calculations.  But efforts along these lines have yielded little concrete results for patients.  

For example, in a congressional hearing last week, three major pharmaceutical companies – Johnson & Johnson, Merck and Bristol Myers Squibb – shamelessly blamed their skyrocketing prices on peculiarities of the American healthcare system.  They didn’t flinch in justifying the eye-popping price difference between the United States and other countries.  For instance, Merck’s diabetes drug Januvia costs about $200 per year in France, versus a list price of $6,900 annually in the U.S. 

The federal government is currently negotiating price reductions with the manufacturers of 10 expensive medications under the Inflation Reduction Act, a signature legislative achievement of President Biden that permits direct price talks with drug makers. At the same time, the pharmaceutical industry is waging an aggressive legal battle to halt the negotiations. Bottomline: Lower prices may not reach American consumers for months, if not years.

For at least a decade, the federal government and states have floated various ideas to cut costs as out-of-pocket healthcare expenses skyrocketed. Congress in recent years considered legislation to lower drug prices and block surprise medical bills, but those efforts took a back seat to the coronavirus pandemic. 

So far, state drug-pricing initiatives that range from studies and copay caps to transparency and price-gouging bans have been the most effective ways to respond to public outcry for prescription price relief.

The governor’s one-two punch of an insulin cost-sharing  ban and an expansion of consumer protections against healthcare-related debt is just what the doctor ordered, and could go a long way in setting a new model for the entire nation. 

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