Out-of-pocket insulin costs for some New Yorkers could drop to zero under a plan Gov. Kathy Hochul will propose at next week’s State of the State address. But the plan is expected to face pushback from health insurers.
“This would be the most expansive insulin cost-sharing prohibition in the nation,” Hochul said at a press conference Tuesday morning previewing some of her agenda for the 2025 fiscal year, which begins July 1. Her office said she’d ban co-pays for insulin on health plans under the state’s purview.
About one in 10 New Yorkers have diabetes, which disproportionately affects Black and low-income residents, according to the state health department. And an estimated 464,000 New Yorkers rely on insulin daily, the state attorney general’s office said earlier this year.
But it’s still unclear exactly how many New Yorkers would benefit under the governor’s proposal.
Hochul said she aims to apply the copay ban to all individual and group health plans that are regulated under state law, said Justin Henry, a spokesperson for the governor. But many large, employer-sponsored health plans are regulated by the federal government instead. Low-income New Yorkers on Medicaid already pay little or nothing out of pocket.
The move comes as the Biden administration and major drug manufacturers are also taking steps to reduce patient spending on insulin.
A New York state law capping the copay for a 30-day supply of insulin at $100 took effect in 2021. But a bill seeking to drive down consumer costs further by limiting copays to $30 for a month’s supply stalled in the Legislature. Meanwhile, older patients on Medicare, which is regulated by the federal government, had their copays capped at $35 a month for each insulin prescription last year (many diabetes patients require more than one type of insulin).
When the governor proposes something, there’s more momentum behind it, said Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York.
“It really makes a big difference that she’s taking this on,” Benjamin said. “It’s huge.”
Benjamin added that it would be even better if Hochul applied the copay ban to all diabetes medications, but said this is a good start.
Although insulin has been a major focus of debates over high pharmaceutical prices, not all diabetics use the drug, which helps regulate the body’s blood-sugar levels. Insulin is necessary for Type 1 diabetics, whose bodies produce little or none of the hormone. But the overwhelming majority of New Yorkers with diabetes have Type 2, according to the state health department, and only some Type 2 diabetics use insulin as part of their treatment regimen. Other classes of drugs and devices can also drive up the total costs to patients, according to doctors who treat diabetes.
Advocates for price caps argue that patients who pay more out of pocket for insulin may end up rationing their supplies. Some studies have found that can lead to expensive medical complications down the line.
Hochul’s office said in a press release Tuesday that her proposal would ultimately save New Yorkers millions of dollars.
But health insurers are already pushing back.
“While well-intentioned, limiting or eliminating copays on insulin fails to address the major driver of skyrocketing prescription drug costs: the increasing escalation and exorbitant prices drug companies charge,” Eric Linzer, president of the New York Health Plan Association, said in a statement on Hochul’s proposal.
Linzer added that the governor’s proposal would “shift costs to others through higher insurance premiums and copays and allow Big Pharma to continue to raise insulin prices.”
Hochul also announced other upcoming efforts to address medical spending in the state budget. She said she aims to reduce the burden of medical debt by strengthening hospital financial assistance programs and by preventing hospitals from suing patients with low incomes — a practice for which hospitals have come under fire in recent years.
The governor is expected to release more details on her initial budget proposals next week.
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