The $35 insulin cap is federal law only for Medicare. Gaps remain.

The widely publicised "$35 insulin" is a federal guarantee for one group of people: those on Medicare. The Inflation Reduction Act caps insulin cost-sharing at $35 for a month's supply for Medicare beneficiaries, effective 1 January 2023 for Part D and 1 July 2023 for Part B [s1]. For everyone else, the $35 price is a voluntary promise from the manufacturers, not a law — and voluntary promises come with conditions and can be withdrawn. That is why insulin can still be expensive for some people even now.

Two different $35 caps, and only one is law

The Medicare cap is statutory. Congress wrote it into the Inflation Reduction Act, and every Medicare Part D plan must apply it [s1]. The version that reaches people with commercial insurance or no insurance is different in kind. An earlier draft of the same law would have extended the $35 cap to private insurance, but that provision was removed before passage — so there is no federal commercial cap.

What filled the gap was a set of voluntary company decisions. In 2023 and into 2024, the three manufacturers that dominate the US insulin market moved to cap out-of-pocket costs at $35 for many patients: the change reached people with private insurance at participating pharmacies, and the companies' patient-assistance programmes extended $35 pricing to some uninsured patients as well [s4]. Those programmes are real and have helped many people. But because they are the manufacturers' own policies rather than a legal requirement, they carry eligibility rules, depend on using specific products and pharmacies, and can be changed by the companies that offer them. A statutory cap and a corporate savings programme are not the same protection, even when the number on them is identical.

Why the underlying price was so high to begin with

The caps sit on top of a pricing system the Senate Finance Committee spent two years dissecting. Its 2021 bipartisan staff report, drawing on more than 100,000 pages of internal documents from manufacturers and pharmacy benefit managers, documented how insulin list prices climbed while the prices actually collected fell — a divergence driven by the rebates manufacturers pay to middlemen to win formulary placement [s3]. Over one five-year span the list price of the insulin Humalog rose 27% while its net price, after rebates, fell 10%; one manufacturer's insulins saw list prices grow 140% over eight years while net prices dropped 41% [s3]. The report found that two manufacturers considered cutting list prices by up to 50% in 2018 and chose not to, because a lower list price meant smaller rebates and worse formulary positioning [s3].

The people most exposed by that gap are the ones whose costs are tied to the list price rather than the net price: the uninsured, and the insured who pay a percentage of list before meeting a deductible. The rebates that pull the net price down do not reach them at the counter.

What the shortfall cost, measured directly

The consequence of high out-of-pocket insulin prices is not abstract. A national survey published in Annals of Internal Medicine in 2022, analysing the federal government's 2021 National Health Interview Survey of 29,482 adults, estimated that 1.3 million American adults with diabetes — 16.5% of those prescribed insulin — had rationed it in the prior year, meaning they skipped doses, took less than prescribed, or delayed a refill to save money [s2]. Rationing was highest among the uninsured, at 29%, but even among people with private insurance, nearly 19% reported rationing [s2]. That last figure matters: private insurance did not immunise people against rationing, which is the population the voluntary $35 caps are meant to protect.

That survey reflects the period just before and as the caps took effect, so it measures the problem the caps were built to solve, not the situation after them. Whether the caps have driven rationing down is a question that will require fresh survey data to answer; the pre-cap baseline is what is firmly established.

Where the gaps remain

Putting the pieces together explains why "insulin is $35 now" is true for some and not others. If you are on Medicare, the $35 cap is law and applies [s1]. If you have commercial insurance, you likely benefit from a manufacturer or plan cap, but that protection depends on your specific insurer, pharmacy and product, and is not federally guaranteed. If you are uninsured, you depend on manufacturer assistance programmes with their own eligibility rules, or you face prices tied to the list price the Senate report described [s3] [s4]. The single number obscures a system in which the same drug costs radically different amounts depending on which of those categories a person falls into — and the caps, real as they are, did not change the list prices underneath.