The True Cost of Diabetes: How Much Do Patients Pay Each Year?

Living with a chronic disease like diabetes isn’t just physically and mentally taxing. It also costs a lot. And the money to pay for it often comes right out of your own pocket.

All told, the average person with diabetes could spend between $3,300 and $4,600 a year managing their condition — even with health insurance. That figure represents about 6% to 8% of the average American’s annual wage.

Things get even more expensive for those with uncontrolled diabetes, with more than one chronic condition, or lacking insurance altogether.

More than 37 million Americans have diabetes, and more than 7 million of those people treat their condition using insulin. These out-of-pocket costs are a significant burden for them, on top of the hardships of monitoring their disease, checking blood glucose (sugar) levels, and injecting insulin regularly.

To get a better understanding of the many costs that diabetes patients face, we’ll break the costs into two categories:

1. The cost of managing diabetes: This includes medications, provider visits, outpatient care, managing blood sugar levels, and indirect costs of missing work.

2. The cost of diabetes-related complications: This includes emergency room visits, inpatient hospitalizations, and home healthcare related to diabetes, as well as medical costs related to chronic complications of diabetes (like heart and kidney disease).

The cost of managing diabetes

To manage diabetes, patients target stable blood sugar levels. While diabetes is a lifelong condition, patients can make complications less likely and stay on top of their disease by:

• Managing their blood sugar levels, blood pressure, and cholesterol

• Making lifestyle changes, such as improving their diet and exercising

• Taking medication

• Going to regular checkups with a provider

Altogether, the cost of diabetes for the average patient who takes their medications, sees their provider regularly, and monitors their blood sugar as recommended can range from over $3,300 to over $4,600 annually.

The following are costs that most patients with diabetes should expect to pay to manage their condition.

Provider visits

An important aspect of diabetes management is checking in with healthcare providers regularly and forming a plan for care. These visits cover everything from making a diagnosis, to discussing changes in diet and exercise, to figuring out the right medications to take. 

Patients should see their provider as often as every 3 months to check their blood sugar, as well as get regular lab tests for cholesterol and kidney function, foot exams, and eye exams.

Based on our analysis, patients with diabetes spend on average less than $66 on office visits and less than $22 on outpatient care for diabetes in a given year.

Medication

Medication is often another critical part of managing diabetes. Diabetes medication prices vary widely, depending on the type of therapy and whether the drug is a brand or generic.

There are two types of diabetes: Type 1 and 2. They are treated with different medication regimens. Type 1 diabetes patients take insulin but generally do not take non-insulin anti-diabetic medications (with the exception of SymlinPen, an injectable that is taken with insulin).

In contrast, not all Type 2 diabetes patients need insulin to manage their condition. The first-line drug therapy for patients with Type 2 diabetes is metformin or glipizide, which are available as relatively affordable generics. 

If a Type 2 patient still finds it hard to manage their blood sugar, their provider may add a GLP-1 agonist like Ozempic or an SGLT2 inhibitor like Jardiance — especially if the patient is at higher risk of cardiovascular or renal disease. Type 2 diabetes patients may also add one or more insulins if they still find it hard to manage their blood sugar levels. 

Patients who need these more intensive medication regimens have fewer generic options and will likely face higher out-of-pocket costs.

Our research shows that on average, Type 2 diabetes patients with insurance who can manage their condition without insulin, GLP-1 agonists, or SGLT2 inhibitors spend about $90 on oral diabetes medications each year. Meanwhile, patients taking at least one insulin and at least one GLP-1 agonist or SGLT2 inhibitor spend about $560 each year on all of their medications. 

If a patient doesn’t have insurance, these medication costs more than quadruple to nearly $425 and $3,000, respectively.

These annual costs can also include prescription medical devices and supplies, like continuous glucose monitors (CGMs) and syringes. According to our analysis, the average patient who uses a CGM spends about $80 each year on prescription medical devices and supplies. While affordable access to CGMs usually depends on insurance, patients without coverage can still get discounts on CGMs like Dexcom G7 through GoodRx.

Finally, it’s important to keep in mind that patients with insurance are paying premiums on top of their out-of-pocket costs. So even if diabetes patients have great insurance coverage for their medication, they may be paying hefty premiums to maintain that coverage.

Over-the-counter supplies

The cost of managing diabetes not only includes the cost of prescription medications, but also the cost of medical supplies used to check blood sugar levels.

The recommended practice for testing blood sugar is once in the morning and once at night, as well as once before and after every meal. Ideally, diabetes patients should test twice each time to confirm the blood sugar level. In order to limit infection and minimize pain, it is also best practice to change lancets with each test.

The supplies to check blood sugar are generally available over the counter (OTC). With or without insurance, patients can face costs of over $2,700 annually to self-monitor their blood sugar as recommended.

Patients who take insulin can expect to pay additional costs to safely store their medications.  An insulin cooling case averages nearly $24 per year.

We note that the OTC prices above represent the high end for these costs. With insurance, medical supplies may be cheaper, but they may be less convenient to access since a prescription is required to use insurance. Patients may also have less flexibility on the brands and quantity they can get with insurance, depending on their plan.

Diabetes self-management not only costs money but also time. Patients often dedicate portions of their day to things like self-testing, foot care, exercise, and food planning. One study found that, on average, diabetes patients spend about an hour on self-management each day.

The (indirect) cost of absenteeism

On top of paying for medications and supplies, provider appointments, and hospital visits, some people with diabetes may need to take time off work due to illness. This is known as absenteeism. Studies have shown that people with diabetes have higher rates of absenteeism than people without diabetes.

Missing work due to diabetes and related complications results in lost wages for the patient. Overall, we estimate that the average employed person with diabetes misses nearly 5.5 days of work each year due to illness, which translates to roughly $650 in lost wages annually.

Absenteeism can also lead to other problems beyond lost wages. If people with diabetes are unable to work because of their illness and lose their job, they may risk losing employer-sponsored health insurance, which can be critical to affording diabetes medications and regular provider visits.

Besides absenteeism, patients may also experience diabetes-related financial losses stemming from reduced productivity at work and at home, unemployment, long-term disability, and premature death. These indirect costs can be prevented by managing diabetes.

The cost of diabetes-related complications

As we’ve just seen, the costs of managing diabetes can be high. But they can be even higher for someone with diabetes-related complications, which can require more healthcare and more out-of-pocket spending.

The cost of diabetes complications

People with diabetes have a higher risk for certain complications, and some can be very serious. Complications that often send people with diabetes to the hospital include hyperglycemia and hypoglycemia (high and low blood sugar, respectively), ulcers, infections, heart attack, and acute kidney failure.

These are the annual costs for people with diabetes complications who go to the emergency room (ER), are admitted to the hospital, or use home health services:

• Emergency room visits: People with diabetes complications spend about $72 in a year, on average, to visit the ER.

• Inpatient hospital visits: Inpatient hospitalizations for people with diabetes complications cost about $100 per year out of pocket.

• Home health: Home health services for diabetes average around $413 in annual out-of-pocket costs. Home health services include visits from home care aides, certified nursing assistants, licensed vocational nurses, dietitians, physical therapists, and lab technicians.

The average cost for all three of these services combined is nearly $590 per year. This becomes even higher if a patient is admitted for a lengthy inpatient stay or needs extra care. Our calculations also do not account for uncompensated care or unmet healthcare needs. So the real cost of diabetes complications may be even greater than what’s reflected here.

The cost of chronic complications

As diabetes progresses, other costly health problems can arise — even if a patient keeps their blood sugar levels stable. There are many conditions that tend to occur alongside diabetes (also known as comorbidities) that can make managing it even more difficult. Over 80% of patients in the nationally representative sample we used for our analysis had at least one chronic diabetes complication, such as heart disease, chronic kidney disease, or high cholesterol.

Generally, preventive care for chronic complications, such as office visits and medication, has lower out-of-pocket costs. More intensive services, such as home healthcare and inpatient hospitalizations, are the most expensive medical services related to chronic complications.

Overall, the cost of chronic complications of diabetes depends on how many other conditions a patient has, how severe their conditions are, and how good their insurance coverage is.

In total, having any chronic complication of diabetes costs patients an average of $470 in additional out-of-pocket spending on prescription medications and provider visits each year. If a patient’s chronic complications cause them to visit the emergency room, be admitted to a hospital, or use home health services, total annual costs can increase by an average of $320 on top of that.

Adding it all up

So how much does diabetes cost patients?

Based on our analysis, patients with diabetes can spend between $3,300 and $4,600 a year on caring for their condition. Losing insurance coverage or developing complications of diabetes drives those costs even higher.

See our in-depth white paper for previous years of data here.

Co-contributor: Diane Li, BA

Methodology

Average annual out-of-pocket spending on diabetes: Average annual out-of-pocket spending for medications, office visits, outpatient and inpatient hospital visits, ER visits, and home health were calculated using the Medical Expenditure Panel Survey (MEPS) for 2021. Specifically, we use the Full Year Consolidated Data, Medical Conditions, Prescribed Medicines, Inpatient and Outpatient Stay, Emergency Department, Office-Based Visit, and Home Health files. We identified diabetes patients as having at least one expenditure with a primary diagnosis of diabetes mellitus, Type 1 or Type 2, using ICD-10 code E10 or E11. Medical events were identified as diabetes related if the diagnosis for the event had a three-digit ICD-10 code of E10 or E11.

To calculate diabetes medication out-of-pocket costs, we placed diabetes patients into five categories: (1) patients who filled at least one prescription for insulin and no prescriptions for non-insulin anti-diabetic medications, with the exception of SymlinPen (categorized as Type 1 patients); (2) patients who filled at least one prescription for non-insulin anti-diabetic medications, excluding GLP-1 agonists and SGLT2 inhibitors, and filled no prescriptions for insulin (categorized as Type 2 non-insulin without GLP-1 agonist or SGLT2 inhibitor patients); (3) patients who filled at least one prescription for non-insulin anti-diabetic medications, including GLP-1 agonists and SGLT2 inhibitors, and filled no prescriptions for insulin (categorized as Type 2 non-insulin with GLP-1 agonist and/or SGLT2 inhibitor patients); (4) patients who filled at least one prescription for non-insulin anti-diabetic medications, excluding GLP-1 agonists and SGLT2 inhibitors, and filled at least one prescription for insulin (categorized as Type 2 insulin without GLP-1 agonist or SGLT2 inhibitor patients); and (4) patients who had at least one prescription for non-insulin anti-diabetic medications, including GLP-1 agonists and SGLT2 inhibitors, and filled at least one prescription for insulin (categorized as Type 2 insulin with GLP-1 agonist and/or SGLT2 inhibitor patients). Medication classes were identified based on name and/or NDC provided in the MEPS data, supplemented by information from the GoodRx drug database as of October 24, 2023.

For each medical event category, we calculated the annual out-of-pocket cost per diabetes patient by summing all relevant self- or family-funded expenditures in each year for each patient. We then calculated the average annual out-of-pocket cost per diabetes patient, weighted by the patient’s survey weight. Patient insurance status is based on whether or not a patient had any insurance during the year.

Average cost of OTC diabetes medical supplies: This analysis is based on prices for the top 10 most popular items in each category, across five online diabetes medical supplies sources: Amazon, Walgreens, CVS, Walmart, and Diabetic Warehouse.

Average annual out-of-pocket spending on chronic complications: This analysis is based on the 2021 MEPS data for diabetes patients. Medical events were identified as related to a diabetes chronic complication if the primary diagnosis for the event had a three-digit ICD-10 code listed in Appendix 2 of the American Diabetes Association’s Supplementary Data to the Economic Costs of Diabetes in 2017.

Estimated average lost wages due to absenteeism: This analysis is based on the 2021 MEPS data for diabetes patients. An average daily wage for diabetes patients was estimated using the wage income variable. Estimated average lost wages were calculated as the daily wage multiplied by the number of days of work missed due to illness for diabetes patients. This is likely a conservative estimate, as the wage income variable is top-coded for confidentiality and may include diabetes patients who are not working.

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Written by:

Amanda Nguyen, PhD

Dr. Nguyen is a health economist with a passion for creating actionable knowledge out of data. An expert in economic modeling and econometrics, she works to investigate and demystify pressing issues in healthcare.

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