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Bigger health bills for diabetes patients—especially kids

Annual health-care spending on people with diabetes is more than three times higher on average than for those without the disease—and costs for children with diabetes are rising particularly sharply as they are more apt to use pricier versions of insulin, a new study found.

The study also revealed that those with diabetes, on average, pay more than double the out-of-pocket health costs than others who don't have chronically high blood sugar levels.

"We're seeing increased spending on these people, we're seeing increased people, and I think that's going to have an effect on employers, on insurers, and on the health-care spending" of the United States, said Amanda Frost, co-author of the report released by the Health Care Cost Institute on Thursday.

HCCI's report comes two years after the American Diabetes Association found that the total cost of diagnosed diabetes in the U.S. had risen 41 percent over the five-year period from 2007 to 2012, up to $245 billion annually.

A man with diabetes takes a blood sugar level test.
BSIP | UIG | Getty Images
A man with diabetes takes a blood sugar level test.

The new HCCI report analyzed health-care claims of more than 40 million people who were enrolled in employer-sponsored insurance from 2009 through 2013.

In 2013, there were roughly 9 million people with diabetes in employer plans, or about 5.3 percent of the 169 million people in such coverage, Frost said. That was up from 4.7 percent of people in employer plans in 2009 who had diabetes, which is one of the most common chronic conditions in the U.S.

People without diabetes had per-capita health-care costs of $4,305 as of 2013, the study found. But people with diabetes had per-capita spending of $14,999 that year.

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And the costs were higher for children with diabetes up to age 18—$15,456 per capita—and for adults between the age of 55 and 64 years old. That group spent $16,889 per capita on health care.

The price of diabetes-specific medication played a role in the higher-than-average costs. Frost said HCCI would in the future examine how specific health services also affected diabetics' overall costs. She noted that diabetics often have other health issues, which can in turn increase medical costs beyond the national average.

When it comes to out-of-pocket costs—the share of health bills not covered by an insurance plan—people with diabetes were personally paying $1,922 in 2013. That compared to the $738 in per-capita out-of-pocket costs paid by people without the disease.

While overall health-care spending on people with diabetes rose by 4 percent in 2013, compared to 2.2 percent the year before, the level of spending grew much faster for children with the disease than for any other age group, HCCI found.

Per-capita spending on kids with diabetes grew by 7 percent from 2011 to 2012, and by 9.6 percent from 2012 to 2013, according to the report. In dollar terms, spending on children 18 and under grew by $1,361 from 2012, while the increase for adults age 19 to 25 was almost half that, at $753.

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HCCI said that the higher spending for children was partly due to higher spending for the age group on branded insulin, the medication used to control blood-sugar levels.

Some newer versions of the medication, known as insulin analogs, can cost two to three times the price of traditional synthetic insulin. The insulin analogs contain mechanisms that speed up or slow down the effect of the medication.

From 2009 to 2013, the per-capita spending branded insulin for kids rose 70 percent, or $1,037, HCCI's report found..

By 2013 a total of $2,511 was spent on branded insulin per child with diabetes, HCCI found. That was more than four times the amount of spending on branded insulin for middle-age people, which was $589, and the $617 spent per adult age 55 to 64 years old.

"The children's story is something we found quite surprising," Frost said. "The [overall] per-capita spending was nearly as high as the older age group that we studied, and that is rarely something that you find. And not only is it high, it grew very quickly over the past three years."

"There has been extraordinary growth in health-care spending for children with diabetes," she said.

Matt Petersen, managing director of medical information for the American Diabetes Association, said HCCI's report is the first time that he's heard of a disparity in spending on insulin between different age groups.

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"It does interest me, and, I would say, surprise me," said Petersen.

He said that while adults might be more cost-conscious in weighing whether to use insulin analogs for themselves, parents with diabetic children might be more apt to pay for the pricier versions because they don't want to deprive their child of a medication that could make it easier to control their disease. Petersen also noted that "kids are notoriously volatile" in their eating habits, and as a result might benefit from using the newer insulin analogs more than the traditional synthetic form of insulin.

New insulin analogs "have certainly been widely adopted" because they are seen as helping to improve patients' quality of life in many cases, Petersen said. But he also said there is concern in the diabetes community that their adoption might drive less expensive, traditional synthetic insulin out of the market, and insulin analogs may not be worth the price for everyone.

"Patients with diabetes can still do very well" with traditional synthetic insulin, Petersen said.

"Even with the Affordable Care Act, there's still a lot of people that can barely afford their basic insulin requirements," Petersen said.