What this bill does: HB2636 adds a new cost-sharing standard for insulin products to the Public Health Service Act, covering group health plans and health insurance issuers for enrollees 26 and younger. For those individuals, the plan must cover selected insulin products and may not apply deductibles or cost-sharing above the specified cap.
The cap is the lesser of $35 per 30-day supply or 25 percent of the negotiated price net of all price concessions. The bill defines what counts as a selected insulin product and what qualifies as insulin for purposes of the cap.
It also extends these requirements to ERISA plans, catastrophic plans under ACA, and the Internal Revenue Code, and it calls for implementation by the relevant federal agencies.
Why it matters: The proposal directly targets out-of-pocket costs for a population that includes many children and young adults who rely on insulin. By standardizing cost-sharing and tying it to negotiated prices, the bill aims to reduce price-driven adherence barriers, simplify plan design around insulin benefits, and create uniform protections across private market coverage.
If enacted, it would alter how plans structure insulin benefits and how price concessions flow to enrollees.Implementation and scope: The secures these protections across multiple statutes (PHSA, ERISA, ACA-related provisions, and the IRC) and contemplates administrative guidance to put the rules into practice. It also specifies that the cap applies only to selected insulin products chosen by the plan and clarifies that non-selected insulin products remain subject to otherwise-applicable cost-sharing rules.
At a Glance
What It Does
The bill adds a new cost-sharing rule for insulin under PHSA Section 2799A-11: plans must cover insulin for enrollees 26 and younger and may not apply deductibles or cost-sharing beyond the cap, which is the lesser of $35 or 25% of the negotiated price net of price concessions.
Who It Affects
Group health plans and health insurance issuers offering private coverage must implement the cap for enrollees 26 and younger; the provision applies to the insured population enrolled in such plans.
Why It Matters
Establishes a clear affordability floor for insulin, potentially reducing nonadherence due to cost and harmonizing protections across private plans and self-insured contexts.
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What This Bill Actually Does
The bill creates a specific affordability rule for insulin for people 26 and younger who are in private health plans. It requires group plans and health insurers to cover selected insulin products without charging a deductible or cost-sharing above a fixed cap.
The cap is the lesser of $35 per 30-day supply or 25% of the negotiated price after rebates and concessions, and it applies to the covered insulin products chosen by each plan. The definitions section makes clear what counts as insulin and what products are considered “selected insulin products,” ensuring plans know exactly which drugs fall under the cap.
In addition to the core coverage rule, the legislation adjusts related programs to align incentives with this benefit. It extends these requirements to ERISA-covered plans and to catastrophic ACA plans, and it includes analogous treatment in the Internal Revenue Code.
Cost-sharing paid under the cap counts toward deductibles and out-of-pocket maximums, preserving overall consumer protection in line with existing plan design. Implementation would proceed through guidance from HHS, Labor, and Treasury, with coordination across relevant agencies.The effect is a uniform, predictable cap for a defined subpopulation within private coverage, reducing the risk that insulin costs will drive medical nonadherence or financial hardship while preserving plan flexibility in selecting which insulin products to cover as “selected insulin products.”
The Five Things You Need to Know
The bill caps insulin cost-sharing for enrollees 26 and younger.
Cost-sharing is the lesser of $35 per 30-day supply or 25% of negotiated price, net of concessions.
Insulin products must be designated as “selected insulin products” by each plan.
Cost-sharing paid under the cap counts toward deductibles and out-of-pocket maximums.
The bill extends these protections to ERISA plans, catastrophic ACA plans, and the tax code, with implementation guidance.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Cost-sharing cap for under-26 insulin coverage
Adds a new section to the Public Health Service Act’s Title XXVII. For plan years beginning after January 1, 2026, group health plans and health insurance issuers must provide coverage of selected insulin products for enrollees 26 years of age or younger and may not apply a deductible or cost-sharing above the cap. The cap is the lesser of $35 per 30-day supply or 25 percent of the negotiated price, net of price concessions.
Definitions: selected insulin products and insulin
Defines “selected insulin products” as at least one dosage form of each insulin type, chosen by the plan when available. The term “insulin” covers products licensed under section 351 and marketed under that licensure, including products deemed licensed under 351(a) and marketed under such licensure.
Rule of construction
States that the cost-sharing cap does not force coverage of non-selected insulin or prohibit other cost-sharing to the extent those products are not required by the bill. It preserves plan flexibility to structure coverage beyond the cap for insulin products not described in the new section, subject to existing laws.
Application toward deductibles/out-of-pocket maximums
Specifies that any cost-sharing paid under the cap must be counted toward the plan’s deductible and out-of-pocket maximums, preserving the consumer’s overall protection against excessive health costs.
Catastrophic plan coverage
Amends ACA catastrophic plan provisions to require coverage of selected insulin products for enrollees 26 and younger, consistent with the 2799A-11 cap, prior to the plan year’s cost-sharing limit being reached.
ERISA cost-sharing for insulin products
Adds a new ERISA provision requiring group health plans and health insurance issuers under ERISA to meet the same cost-sharing cap and deductible rules for insulin products described in 2799A-11, with a cross-reference to plan-year implementation and price-concession definitions.
Tax code treatment and cost-sharing definitions
Creates a new section in the Internal Revenue Code recognizing the insulin cost-sharing cap for qualified plans, aligning tax treatment with the cap and the concept of selected insulin products.
Implementation and guidance
Gives HHS, DOL, and Treasury authority to implement the bill’s provisions through sub-regulatory guidance, program instructions, or other guidance as needed to operationalize the cost-sharing caps across plans and markets.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Young individuals 26 and younger with private health coverage who would pay lower out-of-pocket costs for insulin.
- Parents or guardians of insulin-dependent children who rely on private coverage for affordability.
- Group health plans and health insurance issuers that gain a standardized, predictable framework for insulin benefits.
- Pharmacy benefit managers that manage insulin pricing and rebates under a defined cap, reducing variability in reimbursements.
- Diabetes care providers and clinics that may see improved adherence and steady patient engagement due to lower cost barriers.
Who Bears the Cost
- Group health plans and insurers may incur higher upfront costs if negotiated insulin prices yield higher cap-based payments.
- Self-insured (ERISA) plans face administrative costs to implement the cap consistently across multiple benefit designs.
- Pharmacy benefit managers and other plan-affinity vendors may experience changes to pricing rebates and administrative workflows.
- Some plan sponsors might face higher costs if their negotiated prices for insulin lead to higher cap payments, potentially affecting premium pricing or plan design.
Key Issues
The Core Tension
Balancing patient affordability with plan flexibility and price competition: the cap promotes predictable out-of-pocket costs for insulin among under-26s, but reliance on “selected insulin products” and negotiated prices may raise access and formulary-design questions, creating a trade-off between affordability and broad product access.
The bill creates a clear affordability floor for insulin for young enrollees, but the mechanism introduces several policy tensions. First, the reliance on “selected insulin products” gives plans significant latitude to design formulary coverage, which could translate into variability in which products are actually capped for different enrollees.
This could restrict access to non-selected formulations if a patient’s regimen relies on a non-selected insulin form. Second, the cap ties the patient cost-sharing to negotiated prices and price concessions, which could incentivize plans to negotiate rebates or carve-outs in ways that influence which insulin products get chosen as “selected” forms.
Third, extending the rules across PHSA, ERISA, ACA catastrophic provisions, and the IRC creates a broad, multi-asset compliance environment that will require coordination across federal agencies and may create inconsistent consumer experiences during transition.
There is a potential tension between affordability and plan design flexibility. While the cap reduces individual costs, it may affect how plans budget for drug benefits and how aggressively they negotiate insulin pricing.
The implementation will hinge on the quality of sub-regulatory guidance and the degree to which plans harmonize their formularies to minimize disruption for patients who require non-selected insulin products or who need adjustments during treatment. The central question is whether the cap can achieve meaningful affordability without dampening price competition or limiting access to newer insulin therapies.
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