S-4512-119
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Sponsored by John Kennedy (R-LA)
What it does
This bill would require private group and individual health plans to cover at least one insulin product of each dosage form and type without a deductible, and cap patient cost-sharing at the lesser of $35 or 25% of the negotiated price per 30-day supply, starting with plan years on or after January 1, 2027. It would also create a federal program under which the Department of Health and Human Services pays qualifying health care providers and pharmacies the difference between $35 and an uninsured patient's out-of-pocket cost for insulin, so participating providers cannot charge uninsured patients more than $35 per 30-day supply.
Who benefits
Insured individuals who use insulin, particularly those in high-deductible plans who previously paid more than $35 per month; uninsured individuals with diabetes who obtain insulin through participating providers and pharmacies; health care providers and pharmacies that receive federal reimbursement for offering discounted insulin; and patient advocacy groups focused on diabetes care affordability.
Who is hurt
Health insurers and self-funded employer plans, which would absorb costs above the $35/25% cap; pharmacy benefit managers, whose price concession arrangements are directly targeted by the bill's net-price calculation requirement; the federal government, which would bear new spending obligations under the uninsured-reimbursement program with no identified funding offset; and potentially insulin manufacturers, who may face indirect pricing pressure as plans and PBMs adjust negotiated prices in response to the cap.
Supporters argue
Supporters argue that insulin list prices have risen sharply over the past two decades even though the drug has existed for a century, and that surveys have found significant numbers of diabetic patients ration doses because of cost, risking serious health complications. They contend capping cost-sharing at $35 and extending discounted access to uninsured patients directly addresses a well-documented affordability crisis without altering the fundamental structure of private insurance.
Opponents argue
Opponents argue that capping cost-sharing without addressing underlying list prices or PBM rebate practices simply shifts costs onto premiums paid by all enrollees, including those who do not use insulin. They contend the new uninsured reimbursement program creates open-ended federal spending obligations that the bill itself acknowledges may need a future offset, and that mandating specific insulin coverage limits plan design flexibility that insurers use to manage overall costs.
Constitutional context
Congress regulates private insurance markets and PBM pricing arrangements under the Commerce Clause (Art. I, §8, cl. 3), and the federal reimbursement program for uninsured individuals draws on the Spending Clause (Art. I, §8, cl. 1); NFIB v. Sebelius (2012) affirmed broad congressional authority to regulate existing insurance markets, though it limited Congress's power to compel purchases outright, which is not at issue here since this bill regulates existing coverage rather than mandating it.
Checks and balances
Congress sets the statutory cost-sharing caps and appropriates program authority; HHS, the Department of Labor, and Treasury implement and enforce compliance (with express authority to use sub-regulatory guidance, raising some transparency and rulemaking-process questions); courts could review agency implementation, and post-Loper Bright agencies receive no automatic deference on statutory interpretation.
Historical precedent
The Inflation Reduction Act of 2022 capped insulin copays at $35 for Medicare Part D enrollees, and several states have enacted similar copay caps for state-regulated insurance plans; this bill extends a comparable cap to the broader private insurance market not previously covered by federal law.