Diabetes is a prevalent disease. However, it can still take many by surprise and leave them struggling to pay medical bills.
With the complexities of the condition and the wide range of costs involved with treatment, having a financial plan is necessary. Health insurance is obviously one of the primary methods of assistance. However, not everyone has adequate coverage to cover the costs — let alone the out-of-pocket cash required to pay deductibles.
The good news is there are several programs and accounts that can help — like opening a high-interest savings account or applying for a patient assistance program (PAP). Here's a deeper look at the current state of diabetes in the United States and the different ways to manage the costs of treatment.
Diabetes at a glance
Type 1 Diabetes
A condition that keeps the body from producing enough insulin. Insulin shots are used to control blood glucose levels. Most diagnoses occur among children and young adults, which is why it is also referred to as juvenile diabetes.
Type 2 Diabetes
The most common form of diabetes, wherein the body doesn’t properly use insulin to convert sugar, starches and other food into energy.
Gestational diabetes occurs when women experience high blood glucose levels during pregnancy. It’s usually easily managed and goes away after pregnancy.
Prediabetes occurs when blood glucose levels have risen above normal levels, but have not yet reached the levels of type 2 diabetes. A large number of Americans are living with prediabetes (1 in 3 adults). However, taking early action to manage glucose levels can prevent diabetes from forming.
People who have any type of diabetes are at higher risk of developing the following health conditions:
- Heart disease
- Kidney failure
- Loss of lower appendages (toes, feet, or legs)
Keep in mind that these conditions occur in the case of severe complications with the disease. With consistent attention to diet and other medical treatments (like most living with type 1 or type 2 diabetes undergo), progression to these conditions is avoidable.
Diabetes by the numbers
According to the most recent report from the Centers for Disease Control and Prevention, more than 100 million U.S. adults are living with diabetes or prediabetes. Of the 100 million, 30.3 million Americans have diabetes although 7.2 million remain undiagnosed. An additional 84.1 million Americans over the age of 18 have prediabetes. With approximately 1.5 million new cases of the condition being diagnosed every year, the need for education and financial support is clear.
Rates of diagnosis for the following ethnic groups
- 7.4% of non-Hispanic whites
- 8.0% of Asian Americans
- 12.1% of Hispanics
- 12.7% of non-Hispanic blacks
- 15.1% of American Indians/Alaskan Natives
Breakdown among Asian Americans:
- 4.3% diagnosed were Chinese
- 8.9% diagnosed were Filipinos
- 11.2% diagnosed were Asian Indians
- 8.5% diagnosed were identified as other Asian Americans
Breakdown among Hispanic adults:
- 8.5% diagnosed were Central and South Americans
- 9.0% diagnosed were Cubans
- 13.8% diagnosed were Mexican Americans
- 12.0% diagnosed were Puerto Ricans
Underreported deaths due to diabetes
Diabetes is one of the leading causes of death in the United States - placing seventh as of 2017. However, studies have found that it is also among the most underreported. According to the American Diabetes Association, only 35% to 40% of people who died with diabetes had the disease listed on their death certificate. Furthermore, of that number, only 10% to 20% had diabetes identified as the cause of death.
There are a number of possible reasons for the underreported rate. But evidence points to the inability of patients to pay for an adequate diagnosis and proper medical treatment.
What specific costs will someone with diabetes have to address?
If you, a family member, or your child is diagnosed with diabetes or prediabetes, management and prevention take center stage. While much of it involves diet and exercise, medication and medical care will inevitably have an effect on your finances as well.
“About one in five dollars spent on healthcare is spent on diabetes mellitus. Patients with diabetes not only have to spend money on anti-diabetes medications, glucose strips, lancets, glucometer, diabetes shoes, a healthy diet, and exercise, there is also the added expense of medications for associated conditions and complications like neuropathy, coronary artery disease, chronic kidney disease, and retinopathy,” explains Dr. Vishnu Garla, assistant professor of Endocrinology, Diabetes, and Metabolism at the University of Mississippi Medical Center.
According to the American Diabetes Association (ADA), the medical costs for a person with diabetes averages out to $16,750 per year (a total of $327 billion nationwide in 2017) which is more than twice the costs for people without diabetes. Of that amount, $9,601 is attributed to the direct treatment for diabetes.
Of the $327 billion nationally, $237 billion was attributed to direct diabetes medical costs and $90 billion was attributed to indirect costs including absenteeism and reduced productivity at work. Understanding the different forms of diabetes treatments, as well as the direct and indirect costs, is important to effectively plan a financial strategy.
|Type 1 Diabetes||
|Type 2 Diabetes||
|Direct Medical Costs ($9,601/year)||Indirect Medical Costs ($90 billion nationally)|
|Prescription medication (30% of total cost)||Loss of productivity due to mortality ($20 billion nationally)|
|Hospital care (30% of total cost)||Inability to work as a result of diabetes ($40 billion nationally)|
|Routine doctor’s office visits (15% of total cost)||Reduced productivity while at work ($30 billion)|
|Other medications and supplies (25% of total cost)||Reduced productivity due to increased absences and loss of employment from diabetes ($6 billion)|
Insulin injections are one of the primary forms of medical treatment used to manage diabetes. These types of injections are vital for survival, especially for those living with type 1 diabetes, because they can’t produce insulin of their own. Sadly, the cost of insulin has skyrocketed in recent years, leaving many having to choose between going into debt or cutting back on medication.
The average price of insulin increased from $0.13/unit in 2012 to $0.25/unit in 2016. With the average patient using 60 units per day that increase boosted the daily cost from $7.80 to $15. Now, in 2019, the price per unit of insulin has surpassed the $0.30 per unit mark.
“Insulin costs are an epidemic right now. There is even a hashtag called #insulin4all to help support the cause and grow awareness about the high cost of insulin which can range from $300 per month to $800 per month," says Danielle K. Roberts, Medicare expert, personal finance writer, and co-founder of the insurance firm Boomer Benefits.
|WIDELY USED INSULIN BRANDS AND INSULIN INJECTION TOOLS|
|Insulin||Apidra, Humulin, Lantuo, Lente, Levemin, Novolog, Novolin, NPH Insulin, Regular Iletin, Regular Insulin, Velosulin|
|Insulin Syringes||BD Ultrafine, Levemir®, Monoject, NovoFine®, Ulticare, UniFine, UltiGaurd|
|Insulin Pumps||Animas, Deltec, Medtronic|
Diabetes screenings and other medications
Along with regular doctor’s visits, diabetes screenings are important for identifying and managing the disease. If you have been diagnosed, testing your blood glucose levels becomes a regular part of life. The majority of the costs for the medications involved should be covered by your health insurance. Additionally, there are a number of home testing devices you can invest in to help make the process more convenient and cost-effective.
|WIDELY USED DIABETES TESTING BRANDS AND OTHER MEDICATIONS|
|Blood Glucose Test Meters and Test Strips||Abbott Freestyle®, Abbott Flash, Accu-Chek Compact®, Ascensia Elite, Ascencia Breeze, Ascensia Contour, Lifescan One-Touch©, Prestige|
|Injectable Medications||Byetta (Exenatide) injection and Symlin (Pramlintide Acetate) injection, Victoza (lLiraglutide- rDNA origin) injection|
|Oral Medications||Acarbose, Avandia, Chlorpropamide, Diabinese, Glipizide, Glucophage, Glucotrol, Gylset, Meglitol, Metformin, Prandin, Precose, Repaglinide, Rosiglitazone (These drugs act in different ways to lower blood glucose levels and may be prescribed in combination with other medication.)|
Diabetes health expenditures according to group
Depending on whether someone has type 1 or type 2 diabetes, total expenditures can vary. Those who manage their condition at home, through diet, exercise and home testing will have different averages than those needing regular appointments with specialists. According to the American Diabetes Association, the average total healthcare expenditures for diabetes treatment differ according to gender, race, and states with the highest populations of people diagnosed.
Non-hispanic Blacks: $10,470
Non-hispanic Whites: $9,800
States with highest population of people with diabetes
New York: $21 billion in healthcare expenditures
Florida: $24 billion in healthcare expenditures
Texas $25 billion in healthcare expenditures
California: $39 billion in healthcare expenditures
Options for diabetes treatment financing
In a recent online survey of 500 adults with diabetes, more than half of the participants acknowledged that the medical costs involved with treatment have had a negative impact on their finances. Many also admitted they’ve had to go to “extreme lengths” to cover the costs. These lengths include accruing credit card debt, borrowing money from family or friends and tapping into a savings or retirement account. Many may feel the need to take some extra financial risks because they don’t feel as supported as they’d like. Understanding all of your options may help to provide some relief.
How to pay for diabetes treatment and management
Here are the various ways you may be able to get help paying for diabetes treatment.
Government insurance, such as Medicare, Medicaid, and the military, provides most of the financial assistance for diabetes care (67.3%). The remainder is covered by private insurance (30.7%) or out-of-pocket cash (2%).
According to the National Conference of State Legislatures, 46 states and the District of Columbia mandate that diabetes is covered under state insurance.
These states require coverage for diabetes treatment as well as equipment and supplies for home use (insulin, pumps, syringes, test meters). Four states do not have that same insurance mandate, however: Ohio, Alabama, North Dakota, and Idaho. Anyone with diabetes who lives in those four states will most likely need to work with a private insurer or explore other methods of financing.
Coverage from private insurers usually comes through employer-sponsored group plans or individual health plans. Employer-sponsored plans are advantageous because they offer higher protections due to being subsidized. As for individual health plans, the upside is you can no longer be charged more or denied coverage inside or outside the marketplace for having diabetes.
“Medicare doesn't cover everything at 100%, so seniors with diabetes entering retirement need to be aware of their health conditions and potential associated healthcare costs so they can pick a Medicare supplement plan to alleviate the financial burden of what Original Medicare won't cover,” Roberts explains.
But how much of an impact can the various supplement insurance plans have on your insulin costs?
"If you use a pump and are on original Medicare (not Medicare Advantage) with a Medicare Supplement Insurance Plan (Medigap), you can get the cost of your insulin covered under Part B of Medicare, instead of Part D," says Kathe Kline, Founder of MedicareQuick.com. She adds, "Additionally, those using a pump who are on Medicare Supplement Plan F, will also have their insulin covered in full."
Conversely, Kline explains that with Medicare Supplement Plan G, insulin is only covered after the Part B deductible ($198 in 2020). Furthermore, if you are on a Medicare Advantage Plan, insulin is often covered under the Part D portion, which costs a lot more. So it's very important to speak with your insurance agent about all of your options and how they will impact your ongoing treatment costs.
A health savings account (HSA) is a tax-advantaged account for individuals who have a qualified high-deductible health plan (HDHP), are not enrolled in Medicare, are not dependent on anyone else’s tax return and do not have any other health-care coverage. This can include the self-employed or unemployed. HSAs enable you to set aside a set amount each year, pre-tax and use it for your medical expenses. In 2019, the HSA limits are $3,500 for individuals and $7,000 for families. In 2020, those will increase to $3,550 and $7,100, respectively. HSAs are usually paired with HDHPs and offered by health insurance providers. One big benefit of an HSA is that you take the money with you. There’s no “use it or lose it” policy like some other savings plans. Being able to set aside pre-taxed dollars to help pay for medical expenses can go along way when trying to manage diabetes.
Another way to set aside money for medical expenses is through a flexible spending account (FSA). An FSA is an account available to employees who have health plans through their employers. It allows you to deposit a set amount of tax-free earnings which can then be used to pay for the medical expenses of you, your spouse, and your dependents. For 2020, you can deposit up to $2,750 into an FSA, up from $2,700 in 2019. The limits for singles and families are the same.
However, one thing to keep in mind is that FSAs do have an expiration period. You’re generally required to use the funds within your plan year. But your employer may offer extensions if they choose. The benefit is, it can be used with any type of health plan and diabetic supplies are eligible to be paid through FSAs.
Patient assistance programs (PAPs)
Next, patient assistance programs may also be able to help you cover the costs of diabetes treatment.
“There are usually programs with drug manufacturers to help cover people's insulin. If you qualify, you could get your insulin for as little as $0," Roberts says.
The PAPs generally have income cutoffs but the limits can vary greatly from one manufacturer to the next. Furthermore, some will require proof of income while others won’t. Most also require that applicants are not enrolled in Medicare and don’t have private insurance. However, a common exception is made if an applicant only receives Medicare part D benefits.
PAPs are organized by the manufacturer rather than by the drug so you can potentially get help with multiple drugs from one manufacturer. Additionally, being enrolled in one PAP doesn’t prevent you from being eligible for others as long as you have a prescription for the drug. The general rule is you can’t use a PAP for a drug if you are also receiving government reimbursement or another form of assistance for it.
High interest savings account
If you’re not interested in or eligible for a flexible spending account, a high-interest savings account is a good option to explore. It’s just like any other savings account, only with fewer restrictions. Not only are you saving for your medical needs, but your money is also making money in the meantime. High-interest savings accounts are available through online banks. Due to their reduced overhead, they can offer you higher interest rates with the benefit of accessing your money whenever you want.
Unlike an HSA, a high-interest savings account isn’t tied to a high deductible health plan with a dollar limit. And unlike an FSA, there’s no expiration date on when you can use your money. It removes the stress-inducing restrictions so you can concentrate on managing what’s important: managing your condition properly.
The bottom line
Diabetes can be a challenging condition to stay on top of, especially with the increasing costs in recent years, but it’s not insurmountable. The good news is there are many resources, organizations and programs in place to help you get the care you need when you need it.