In 2019, Caitlin Block has paid as much as $552 a month to buy insulin, a drug she needs to stay alive.

The 30-year-old Coon Rapids professional says her life isn’t limited by the physical side effects of her type 1 diabetes, but the financial toll can be overwhelming. Earlier this year, her blood glucose level spiked as her finances hit bottom, even though she had insurance the entire time.

“I lose hope that I will ever be financially stable,” Block said.

Block is the kind of consumer Minnesota insurers had in mind when they announced huge cuts in out-of-pocket spending in 2020 on insulin. Such changes are about to get a lot of public scrutiny, with enrollment for MNsure plans beginning Nov. 1.

People who buy individual or family coverage through MNsure or directly from Medica and UCare will have their out-of-pocket spending on each insulin prescription capped at $25 per month, regardless of yearly deductibles. Blue Cross Blue Shield of Minnesota announced covered insulin would be available at no charge at the pharmacy counter for MNsure and commercially insured members. HealthPartners already offers some plans that cap insulin costs at $25, and there are plans to expand that soon.

“For an insurance company it makes sense, because you only make money off of living customers,” said Ini Augustine, an insurance broker with in Minneapolis. “Also, if you have customers who need insulin, but are not getting their regular dosage, that is going to lead to more complex health outcomes. And that is going to cost you more as an insurer.”

There are no changes in store for Medicare and Medicaid recipients who buy insulin. The changes also don’t apply to self-insured health plans, which includes most larger employers, unless the companies include that benefit in their 2020 plans.

Industry observers speculate that insurance companies are reacting to the rhetoric coming out of the Minnesota Legislature about the unaffordability of insulin in recent years.

In response to public anger over the fast-rising cost of insulin, Democrats and Republicans have crafted competing legislative proposals to reduce costs for people who are struggling. Minnesota lawmakers failed to pass an insulin cost-relief bill this year after closed-door negotiations collapsed, but advocates have kept up the pressure to convene a special legislative session.

The insurance companies “watch the Legislature as close as anybody does, and I think they can read the political tea leaves,” said Allan Baumgarten, an independent health care analyst in St. Louis Park. “I think they’re saying, we’re going to be on the right side of this issue.”

Insurance companies don’t talk about their motives in those terms. Instead, they point to a little-noticed amendment in the state’s most recent omnibus health care spending law offered by Senate Deputy Majority Leader Michelle Benson.

The amendment — known to insurers as the “state mandate” on insulin — says it’s illegal in Minnesota for insurers to take in more cash from members’ out-of-pocket payments for insulin than the net price for that medicine negotiated by the insurer. In other words, insurers in Minnesota can no longer profit from selling insulin.

The mandate is a recognition of secretive price-inflation schemes behind widely used drugs such as insulin.

As former Attorney General Lori Swanson explained last year, drug manufacturers have financial incentives to provide large rebates to pharmacy benefit managers (PBMs), which play a major role in deciding which drugs will be covered by insurance. Swanson said drugmakers raise their list prices to inflate the sizes of their rebates to PBMs, and the PBMs in turn pass along part of their rebate profits to the insurers. People on high-deductible insurance or Medicare may pay higher prices, but not share in the rebates.

Benson said strong government incentives also drive the rebate system, because drugmakers are required to provide rebates to the federal government in order to sell drugs into military health programs. Benson said those programs deserve as much scrutiny as PBM incentives because they create the same “perverse incentive” to increase list prices.

“The consumer cost-sharing for insulin is based on that list price,” said Roger Feldman, University of Minnesota emeritus professor in economics and health care. “So when the list prices are rising by leaps and bounds, consumers’ out-of-pocket costs are going up proportionally.”

Regardless of the state spending controls on insulin, insurers say just changing the copays on insurance in Minnesota is not going to change the underlying economics.

“We are taking a [financial] risk with very thin margins,” said Lisa Boysen, director pharmacy operations and specialty drug management for Minnesota Blue Cross. “This is not really a permanent solution. It is not sustainable. This burden of rising drug costs, it falls on everyone, including employers and taxpayers and consumers. And we just really still need to address the high cost of drugs set by the pharmaceutical companies.”

Consumers note that insulin is just one of many medical expenses imposed on diabetics. Block said she pays hundreds of dollars each month to use an insulin pump to treat her type 1 diabetes, plus she has to pay for disposable glucose monitors, test strips and related equipment. Her insurance premiums and diabetes supplies for the first half of the year averaged $956 per month — more than her rent and car payment combined.

“Obviously insulin is the most important part. I mean, if I don’t have it, I die,” Block said. “I try hard to be positive and think about [spending caps for 2020] as forward movement, because it is. It just doesn’t feel that awesome, knowing how much all of this stuff is around that that I needed in order to effectively use the insulin. I will still pay hundreds of dollars a month.”