Abstract
OBJECTIVE: The Medicare Part D Senior Savings Model (SSM) took effect on 1 January 2021. In this study we estimated the number of beneficiaries who would benefit from SSM and the long-term health and economic consequences of implementing this new policy. RESEARCH DESIGN AND METHODS: Data for Medicare beneficiaries with diabetes treated with insulin were extracted from the 2018 Medical Expenditure Panel Survey. A validated diabetes microsimulation model estimated health and economic impacts of the new policy for the 5-year initial implementation period and a 20-year extended policy horizon. Costs were estimated from a health system perspective. RESULTS: Of 4.2 million eligible Medicare beneficiaries, 1.6 million (38.3%) would benefit from the policy, and out-of-pocket (OOP) costs per year per beneficiary would decrease by 61% or $500 on average. Compared with non-White subgroups, the White population subgroups would have a higher proportion of SSM enrollees (29.6% vs. 43.7%) and a higher annual OOP cost reduction (reduction of $424 vs. $531). Among the SSM enrollees, one-third (605,125) were predicted to have improved insulin adherence due to lower cost sharing and improved health outcomes. In 5 years, the SSM would 1) avert 2,014 strokes, 935 heart attacks, 315 heart failure cases, and 344 end-stage renal disease cases; 2) gain 3,220 life-years and 3,381 quality-adjusted life-years (QALY); and 3) increase insulin cost and total medical cost by $3.5 billion and $2.8 billion. In 20 years, the number of avoided clinical outcomes, number of life-years and QALY gained, and the total and insulin cost would be larger. CONCLUSIONS: The Medicare SSM may reduce the OOP costs for approximately one-third of the Medicare beneficiaries treated with insulin, improving health outcomes via increased insulin adherence. However, the SSM will also increase overall Medicare spending for insulin and overall medical costs, which may impact future premiums and benefits. Our findings can inform policy makers about the potential impact of the new Medicare SSM.