(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, and the State Health Plan (Plan) announced today that beginning Jan. 1, 2021, members of the Plan who take insulin will not be responsible for any costs for their preferred or non-preferred prescriptions. The new policy will save members $5 million and is designed to increase adherence to the drug most commonly prescribed to treat diabetes.
“Over the past 20 years, diabetes has become one of the most serious and expensive diseases that our members are facing,” said Treasurer Folwell. “Because of the rapid rise in the cost of diabetes drugs, especially insulin, we wanted to take an action that will help our members afford this critical medicine. Not only will the zero cost of insulin help our members financially, it will also help them stay healthy and decrease overall health care costs for the plan.”
About 10% of the population or more than 34 million Americans have diabetes, with more than 1 million North Carolinians afflicted with the disease. Nationwide, diabetes is the seventh leading cause of death in the United States, costing an estimated $327 billion. Some estimate that diabetes could cost government and private insurers in North Carolina around $17 billion by 2025. The Plan has approximately 12,000 members who are currently using insulin.
Earlier in the year, the State Health Plan Board of Trustees voted to eliminate the cost of insulin for both the 80/20 and 70/30 plans. Part of the board’s strategy is to increase medication adherence when addressing diabetes treatment. Studies consistently show that medication nonadherence increases medical costs. This nonadherence is often driven by the high costs of medication.
In fact, the list price of insulin has nearly tripled since 2002, and the average price of insulin has increased by 64% since 2014. A member who uses brand antidiabetic medication spends an average of $467 out-of-pocket yearly with nearly 12% spending $1,000 or more. Additionally, diabetes has a disproportionate impact on racial and ethnic minorities, who experience a 50-100% higher burden of illness and mortality from the disease than white Americans.
“People need to stay healthy by eating well, exercising, and not smoking,” said Treasurer Folwell. “Members taking prescribed medications will help manage their health. By eliminating financial barriers, I’m confident that the actions of the board will help improve our members’ health and lower the long-term costs to the Plan. It was the right thing to do.”
The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to more than 727,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.