1. Introduction

Politicians, economists and medical executives have worked for years to provide an affordable and cost-effective healthcare system for all Americans. President Obama was the first U.S. President, with the help of a Democratic Congress, to pass a comprehensive healthcare bill called the Patient Protection and Affordable Care Act of 2010 (ACA), also known as Obamacare. As President Trump and a Republican Congress pursue revamps to the legislation, I offer them my research regarding the healthcare needs associated with a significant population, Type 1 and Type 2 diabetics, who constitute 29.1 million (9.3%) of the U.S. population. (CDC 2014).

In the United States, we spend $3 trillion, or 20 percent of the GDP, on healthcare, which is 2 or 3 times more than what other countries spend without getting better results (Solman 2017). The average medical expenditures among U.S. diabetic patients are 2.3 times higher than for people without diabetes (CDC 2014). Of diabetic patients, those who experience secondary symptoms of the disease incur the greatest expense – not only economically but in quality of life. With proper maintenance, these symptoms can be significantly delayed until later in life, resulting in fewer direct and indirect costs over time (Minshall et al. 2005).

Dall et al. (2009) reported that in 2007, of the $116.3 billion annual medical and pharmaceutical costs associated with diabetes in the United States, $58.3 billion (50.1%) are attributed to hospital inpatient costs. Another $7 billion (6%) can be attributed to diabetes-related emergency room visits and hospital outpatient costs. Inpatient and emergency room costs for diabetics involve medical treatment and procedures that are largely in response to uncontrolled diabetes.

1.1  Link Between Poverty and Diabetes

The metabolic disease diabetes mellitus is an expensive illness, especially for the impoverished. Unfortunately, there is a link between poverty and the onset of Type 2 diabetes. Although both Type 1 and Type 2 diabetics come from all socioeconomic groups, Type 2 diabetics are more likely to be poor in the United States, where there is a link between poverty and the consumption of cheaper sugary foods as a regular substitute to fruits and vegetables (Levine 2011), which leads to the disease over time. This phenomenon does not occur internationally, where impoverished populations have less access to sugary foods and rely on food staples such as corn, rice and beans. In addition to a poor diet, Type 2 diabetics are also less active, and genetics and other factors also play a role. The impoverished have had less access to healthcare and less education that would assist them in adjusting their diets to better meet their health needs.

1.2   Type 1 Diabetes Is Unique

It is unknown what causes Type 1 diabetes, which makes up 5-10% of all diabetics (CDC 2014). One current theory as to the cause of Type 1 diabetes is that certain identified genes cause an autoimmune response to turn on when a patient experiences a significant stress event, and this can occur at any time in their life (Atkinson, et al. 2014). Different human leukocyte antigens (HLA) class II haplotypes have been linked to Type 1 diabetes that develops in childhood (HLA DRB1*04–DQB1*0302, but also HLA DRB1*03–DQB1*0201) versus latent autoimmune diabetes (HLA- DQB1*0201/0302 [DR3/DR4]) whose onset is later in life (Cerna 2007). Others suggest that the condition is triggered by a virus or environmental factors (Eringsmark Regnéll & Lernmark 2013).  Based on what researchers presently know about Type 1 diabetes, the condition develops regardless of patient lifestyle or health habits.

Type 1 diabetics, who are often diagnosed as children or young adults, have traditionally lived with the disease for a longer portion of their lives than Type 2 diabetics, who commonly experience the onset of the disease later in life. In recent years, a fraction of Type 2 diabetics has been diagnosed in the prime of life as a result of the obesity epidemic. Conversely, more cases of Type 1 diabetes with an onset later in life are being diagnosed as researchers learn more about the disease (Tao, et al. 2010).  Over the course of their lifetimes, Type 1 diabetics will spend more out of pocket for medical expenses than Type 2 diabetics. As a result, it is important to track expenses of both diseases separately from each other.

Both Type 1 and Type 2 diabetes are on the rise. In the last two decades, the incidence of the disease has more than tripled, from 8 million in 1995 to 29.1 million in 2014 (CDC 2015-1). Tracking the disease and finding ways to cut costs will reduce its impact on patients with disease, healthcare providers and the economy.

1.3  The Impact of Secondary Symptoms

As the disease advances, both Type 1 and Type 2 diabetics will present with secondary symptoms, such as neuropathy, which can lead to the amputation of lower limbs, and retinopathy, which causes blindness. These conditions occur when elevated glucose levels in the circulatory system destroy capillaries over time. The prevalence of cardiovascular disease, another secondary symptom in diabetic patients, is similar to nondiabetic individuals who are 10 to 20 years older, both in cardiovascular events and in measures of atherosclerosis, or hardening and narrowing of the arteries (Polak et al. 2011). Renal failure, stroke, high cholesterol and high blood pressure are also conditions associated with diabetes. Out-of-pocket expenses associated with ambulatory care, emergency treatment, inpatient surgery, ICU stays, and hospice recovery will exasperate household budgets (Secrest et al. 2011), and the inability to work will further necessitate the need for patients to rely on disability insurance and social security. By delaying the onset of secondary symptoms until later in life, patients can provide for their families longer, purchase long term disability insurance, and prepare for the increased medical expenses as part of their retirement savings.

Access to affordable healthcare is essential to diabetics, who need regular doctor’s visits to properly monitor the disease. When co-pays, lab expenses and prescriptions become cost prohibitive to patients, they are less likely to go to the doctor and take their medications properly.

1.4  Tests for Secondary Symptoms

It is recommended that patients receive quarterly hemoglobin A1C tests, that identify a three-month average of plasma glucose concentration. A person with a fully functioning pancreas will have an A1C level below 5.7% (Mayo Clinic 2017-1). An acceptable target for a diabetic is less than 7%. An elevated A1C is a warning sign for patients to make changes to diet, exercise, and how frequently they are testing their blood sugar. If blood glucose levels are not monitored as recommended, the onset of secondary symptoms can accelerate.

Other tests that the American Diabetes Association recommends on an annual basis are a foot exam to check for signs of neuropathy and a dilated eye exam to measure the presence of retinopathy. Neuropathy tests may be performed by a family physician or endocrinologist, and retinopathy tests may be given by an optometrist or ophthalmologist. Some states, including Utah, require that diabetics provide the results of the retinopathy test to maintain an active driver’s license. Diabetics should also receive blood chemistry tests, such as a cholesterol test.

1.5  Affordable Medications

In addition to affordable doctor visits and monthly premiums, diabetics need access to affordable medications and supplies, which also make up a significant percentage of diabetes costs. Dall et al. (2009) reports that $27.7 billion (15.9%) was spent in 2007 on outpatient medications and supplies for diabetics. Although expensive, they help diabetics maintain healthy A1C levels, which will reduce overall expenses and ultimately help them live a longer and better quality life.

The United States has the highest drug prices in the world. There is presently no price control mechanism for drug prices in the United States. When one drug manufacturer puts a price at a new high level, other drug manufactures follow suite. Drug advertising, which is only allowed in one other country in the world (New Zealand), has increased 62% since 2012. In other countries such as Japan, prices must go down in the medical industry as technology gets older, but in the United States, that is not happening. For example, the MRI became available in the 1960s, but the cost for them is still in the thousands, where in Japan the cost is about $150 (Solman 2017).

The out-of-pocket costs for certain insulins have skyrocketed in the last few years, but market pressures may drive prices back down to affordable levels. For example, the cost of Sanofi SA’s Lantus insulin increased 90% in last five years (Loftus 2016-1). In response to the public outcry, competitors Eli Lilly and Boehringer Ingelheim GmbH have announced that they will soon begin to offer lower-cost versions of Lantus, which has prompted CVS Health Corp. to stop paying for Sanofi’s name brand product.

Medicare has faced several policy challenges this year. The Obama administration proposed a policy change in 2016 designed to curb Medicare spending on prescription drugs by requiring doctors to prescribe less expensive medications when possible, but the policy was never finalized (Loftus 2016-2). The Trump Administration has expressed its disapproval of pharmaceutical prices.

1.6  Adjustments to Current Legislation

The Trump Administration, after a failed bill in the House to repeal the Affordable Care Act, intends to pursue changes to the legislation through a Congressional act or through policy (Armour 2017). It has proposed to end the healthcare mandate that required Americans to enroll in an insurance policy, which would lead to an increase in premiums of an estimated 15-20% (Mathews 2017). It has also proposed to repeal the Medicaid expansion starting in 2020. More than 30 states have participated in the expansion of the joint federal and state insurance program designed for children, low-income individuals and those with disabilities, and the program has grown 16-25% since 2014 through the Affordable Care Act. Governors whose states have been participating oppose the rollback (Grant 2017).

The Trump administration has an opportunity to improve upon Obama’s legislation with the benefit of hindsight. If policy changes can provide diabetics with more focused care, affordable premiums, doctor visits and medications, it will move us closer to the goal of reducing the immediate and long-term costs of the disease.

1.7  Prior to the Affordable Care Act

This thesis utilizes the 2009 Medical Expenditure Panel Survey (MEPS; Agency for Healthcare Research and Quality 2011), a study of self-reported and doctor-reported medical data, to study the economic and medical situations of diabetics. The year 2009 provides an interesting snapshot of patients’ access to healthcare prior to the Affordable Care Act and allows us to assess in which areas we have excelled and where we still need improvement. I will compare insurance types to identify which is the most affordable and provides the most effective coverage to diabetic patients.

1.8  Statement of the Problem

In comparing private insurance, Medicaid, Medicare, and Tricare/Champ VA among diabetic patients, which type is more likely to:

  1. Facilitate the recommended A1C blood tests and exams that measure the presence of neuropathy and retinopathy?
  2. Reduce the likelihood of the presence of secondary symptoms?

1.9  Hypotheses Statements

Improving patients’ access to healthcare, despite their socioeconomic status, is one important method that can assist in delaying the onset of the secondary symptoms of diabetes which are costly for individuals, medical providers and the national economy. The following is a further description and the null and alternative hypotheses for the each of the three research questions.

  1. The American Diabetes Association recommends that diabetics receive an A1C test each quarter. It also recommends an annual eye test that measures the presence of retinopathy, and a foot test to measure the presence of neuropathy. These tests indicate over time how well a patient is managing their diabetes and can encourage changes in patient habits. The following are null and alternative hypotheses for the first question:

H0:        A patient’s insurance type has no impact on whether they receive the recommended tests.

H1:        In analyzing private insurance, Medicaid, Medicare and Tricare/ Champ VA, at least one type of insurance will be statistically significant in facilitating the recommended tests.


  1. The 2009 MEPS study represents only one point in time. It will provide the basis of comparison of insurance types’ diabetes coverage in 2009. Effective care involves providing the recommended diabetes tests that can lead to better self-maintenance of the disease.

H0:        A patient’s insurance type does not impact the likelihood of secondary symptoms.

H1:        In evaluating private insurance, Tricare/ Champ VA, Medicaid and Medicare, at least one type of insurance analyzed will reduce the likelihood of secondary symptoms.