Over 45 percent of Americans have diabetes or prediabetes and roughly halfof US adults receive health insurance through their employer. Unfortunately, not all employer-sponsored health plans meet the needs of people with diabetes. According to a study of 65,000 people with type 1 diabetes on employer-sponsored health insurance, the average annual out-of-pocket cost of diabetes care was $2,500. Eight percent of study participants had annual costs well over $5,000. Since diabetes is most prevalent in low- and middle-income households, these costs, in addition to paying for premiums and non-diabetes healthcare, are unaffordable for many people.

If your health insurance does not cover a component of your diabetes healthcare, or if your diabetes care is covered but still unaffordable, you can work with your employer to get better coverage. Here is an overview of the different types of health insurance, who to go to for help, and how to advocate for better diabetes health coverage.

What are the different types of health insurance? 

You will have expenses no matter what health insurance you have, but some plans can be more affordable for diabetes care. These are the expenses you will typically encounter with your health insurance plan:

• Premium - Similar to paying rent, a premium is a fixed amount that you pay every month to keep your health insurance active. It’s common for employers to pay about half of your monthly premium, and sometimes more. In 2019, people with employer-sponsored insurance paid an annual average of $1,242 for health insurance premiums.

• Deductible - The deductible is the amount you pay out-of-pocket before your insurance provider covers expenses. For example, if you have a $1,000 deductible, your insurance coverage will not kick in until you’ve paid $1,000 in healthcare expenses for that year.

• Copays - Copays are a fixed amount that you pay for a health service or medication, and your insurance provider covers the rest of the cost. Copays are a helpful way to pay for diabetes care because they are fixed, predictable costs that people can plan for.  

• Coinsurance - Unlike fixed-price copays, coinsurance costs are a percentage of the total price of a health service or medication. These expenses are less predictable because medication prices can fluctuate.

There are three main types of health insurance - health maintenance organizations (HMO), preferred provider organizations (PPO), and high deductible health plans (HDHP). Here is an overview of the different types of health plans and what they might cost:

• HMO - Health maintenance organizations have high premiums and low deductibles. An HMO plan covers healthcare within a network of hospitals and healthcare professionals. Your providers must be in-network in order to get your diabetes care covered. If your diabetes care professionals are in-network, this is often the most cost-effective healthcare option for people with diabetes.

• PPO - Preferred provider organizations also have high premiums and low deductibles than HDHPs. PPOs are more flexible than HMOs because you are able to see providers out-of-network and you can see specialists without a referral. Because of this, PPOs typically have higher premiums and out-of-pocket costs than HMO plans.

• HDHP - High deductible health plans typically have low monthly premiums and high deductibles. In 2020, the IRS defined a HDHP as any plan with a deductible of at least $1,400 for an individual and $2,800 for a family. If you have a high deductible health plan, you can open a health savings accountwhere you set aside money to pay for medical expenses tax-free. These health plans are good for people who don’t anticipate needing regular healthcare; paying for diabetes care can be difficult with this type of plan because you will have high out-of-pocket costs upfront before you meet your deductible.

Keeping these different types of health insurance and related expenses in mind, here are some things people with diabetes should think about when reviewing an employer-sponsored health plan:

• What are my diabetes-related costs? Make a list of your diabetes healthcare costs including medications, devices, supplies, healthcare visits, and lab tests.

• What are the health insurance costs? Look at the premium, deductible, and whatever cost sharing method (copay or coinsurance) is used for the health plan.

• Are my medications and devices covered? Refer to your health plan’s Summary of Benefits and Coverage to see what is included in your insurance coverage. If a therapy or device is not covered, you may have to switch to one that is or submit a request to get it covered. Getting a new medication or device covered under your health plan can be a challenging and time-consuming process.

• Is insulin covered pre-deductible? Some health plans cover insulin before you reach your deductible because it is considered preventive medicine. This can make insulin considerably more affordable, especially for people on high deductible health plans.

• Are my healthcare professionals in-network? Accessing in-network healthcare is more affordable than out-of-network care. You should choose a health plan where your current providers are in-network or one that has good in-network options.

• Can I access a flexible spending account (FSA) or health savings account (HSA) to save money? FSAs and HSAs are used to put aside money that is not taxed to help pay for medical expenses. HSAs are paired with high deductible health plans. FSAs can be used for any kind of health insurance and all FSA funds must be used in the same calendar year. Learn more about FSAs and HSAs here.

If I have a problem with my insurance, who do I go to for help?

Your employer’s human resources (HR) department should be able to address many of your insurance-related questions, since it likely helped select the health plan(s) available to you. Your HR department is your first resource for health insurance questions. If you need help selecting an insurance plan, want to see if your diabetes care is covered, need to file a claim, or are having trouble navigating your plan and understanding the costs, the HR department will support you.

For further questions, your HR department can refer you to a representative with the health insurance company or to a third-party administrator. A third-party administrator will help you understand your health plan, file health insurance claims, and navigate the appeals process if your insurance company denies coverage for a diabetes treatment. You can also apply for an exception to get treatments, medications, and devices covered if recommended by your doctor. A third-party administrator will guide you through these steps for getting important diabetes treatments covered.

How can I make my employer-sponsored health insurance better for people with diabetes?

People with diabetes typically require expensive medications, devices, and regular visits with healthcare professionals to stay healthy. Robust employer-sponsored health insurance plans should make these expenses affordable and predictable. If you are trying to make permanent changes to your employer-sponsored health plan, your HR department can help you advocate for future health plans that better support diabetes needs. Employers have the power to make changes to their health coverage options every year. Here are some changes you can advocate for:

• Add insulin and other diabetes care to the preventive medicine list. In 2019, the IRS ruled that expenses for chronic disease management can be covered before you meet your deductible under a high deductible health plan. HMOs and PPOs also have preventive medicine lists. Diabetes care such as insulin, A1C testing, blood glucose meters, and eye screening – which are all considered preventive medicine – can be added to the preventive medicine list to reduce the copay or coinsurance costs for diabetes care. This saves employees money instead of paying full price before meeting their deductible.

• Request to get a medication or device covered under your health plan. If a device or medication you currently use (or want to try) is not covered under your health plan, you can ask for coverage in next year’s health plan. Diabetes devices, such as continuous glucose monitors (CGM) and insulin pumps, can help people with diabetes manage their glucose levels and increase their Time in Range, but are expensive without insurance coverage. Employers can typically negotiate to cover essential diabetes care, so request coverage for your medications and devices. Your diabetes treatment should be determined by your healthcare professional, not by what’s included in your health plan.

• Share discounts and rebates with employees. While list prices for diabetes medications may be high, your employer’s pharmacy benefit manager (PBM) can negotiate discounts and rebates on drug prices on behalf of the insurance plan and employer. The list price minus the negotiated discounts is called the net price. Sometimes PBMs and employers will keep the money saved; however, employers can pass discounts on to their employees to lower their out-of-pocket costs.

• Use copayments for cost sharing instead of unpredictable coinsurance. Coinsurance costs are unpredictable because they fluctuate as a drug’s net price changes. You can advocate for your employer to choose health plans that use copayments for healthcare cost sharing, instead of coinsurance.

More resources for accessing diabetes healthcare with your employer-sponsored health plan:

• Top-Tier Health Plans and Wellness Programs for People with Diabetes – an Employer’s Handbook (diaTribe)

• When Insurance Gets Turned Down – Appeals Explained (diaTribe)

• Choosing The Right Health Insurance Plan When You Have Diabetes (ADA)

• Health Insurance Guide for T1D (Beyond Type 1)

• How to Choose The Best Health Insurance Plan for People with Type 1 Diabetes (JDRF)

• Insurance video series (College Diabetes Network)

Feel free to share this article with your employer or your HR department. All people with diabetes deserve access to affordable, high-quality care. To learn more about health insurance and affording diabetes treatment, visit diaTribe.org/access.