Diabetes, a chronic disease, was the sixth leading cause of death in the United States in 2000, contributing to the loss of more than 200,000 lives, according to CDC. Type 1 diabetes, in which the body fails to produce insulin, is usually diagnosed in children and young adults. Type 2 diabetes, in which the body fails to use insulin properly, is associated with aging, a family history of diabetes, physical inactivity, and obesity and accounts for 90 to 95 percent of all diabetes cases. Although type 2 diabetes occurs most often among adults, it is increasingly being diagnosed in children and adolescents. One study found that, on average in 2002, individuals with diabetes incurred about $13,243 in health care expenditures, compared with about $2,560 in expenditures for individuals without diabetes. These estimates include costs attributed to complications of diabetes, such as cardiovascular disease, neurological symptoms, and kidney disease. Federal health agencies and national organizations concerned with diabetes patient care have identified a number of services and supplies that individuals with diabetes often need to help manage their disease. Table 1 lists services considered important for diabetes patient care by the American Association of Diabetes Educators; the American Dietetic Association; and the National Diabetes Quality Improvement Alliance (Alliance), a consortium of 13 private-sector organizations and government agencies, including the American Diabetes Association (ADA), CDC, and the Centers for Medicare & Medicaid Services. In addition to such services, according to federal agencies and organizations concerned with diabetes patient care, individuals with diabetes often need certain supplies to manage their disease. Needed supplies may include blood glucose monitors, glucose control solutions (used to check the accuracy of testing equipment and test strips), test strips, lancets and lancet devices (used to prick the skin for a blood sample to self-test blood glucose levels), insulin (when necessary), insulin pumps (to administer insulin), disposable needles and syringes (also to administer insulin), alcohol swabs, and therapeutic shoes (for individuals with severe diabetic foot disease). Health coverage may be provided through the purchase of insurance policies that are subject to state laws and regulations or through means other than insurance. Health coverage provided through the purchase of insurance in a given state, whether purchased by individuals or by employers, is subject to insurance requirements in that state, including requirements to cover specified illnesses, services, or supplies. For example, states often require coverage of cancer-screening services such as mammography or tests for colorectal cancer. These state requirements are in addition to coverage requirements established by federal law. In 2001, two-thirds of Americans younger than 65 (the age at which people generally become eligible for Medicare), received health coverage through their own employer or that of a family member. Large private employers often self-fund their health plans, and coverage provided by these plans is not subject to state insurance regulation, although it is generally subject to federal requirements. Health coverage provided by the federal government is also not subject to state insurance regulation. For FEHBP, OPM is responsible for contracting with private health insurance carriers to offer health benefit plans to federal employees. By federal law, the terms of any FEHBP contract negotiated by OPM that relate to coverage or benefits preempt any inconsistent state or local law or regulation. OPM routinely preempts state requirements to ensure a consistent set of benefits among nationwide FEHBP plans, according to an OPM official. In 2004, 47 states had laws or regulations related to coverage of diabetes services or supplies, although specific requirements varied by state (see fig. 1 and app. II). Forty-five states required insurance policies to cover specific services or supplies for diabetes. Two more states, Mississippi and Missouri, required “mandated offerings”; that is, these states required insurance policies to provide coverage for diabetes at the option of purchasers. Some states’ requirements applied only in narrow circumstances. For example, Arizona and Wisconsin required coverage of diabetes supplies only when a health insurance policy covered the treatment of diabetes. The services most frequently specified in state requirements were diabetes education and medical nutrition therapy: 45 states required that insurance policies cover diabetes education, and 27 states required coverage of medical nutrition therapy. State requirements may have focused more often on these two services in part because national organizations concerned with diabetes patient care—including ADA, the American Dietetic Association, and the American Association of Diabetes Educators—have supported “model” legislation centered on these two services. According to ADA and the American Dietetic Association, the organizations focused on these two services in particular because others, such as eye and foot exams, were thought to be covered by most policies as general medical services. The model legislation also includes coverage of “diabetes equipment and supplies,” and 47 states required such coverage. Twenty-eight states identified which supplies must be covered, although their specific requirements varied. Some states had specific requirements regarding the coverage of certain services, such as diabetes education. Forty-two states specified at least some criteria for the training or education that health care professionals must have to provide diabetes education. These criteria varied widely from state to state. To provide diabetes education in Louisiana, for example, health professionals must have demonstrated expertise in diabetes and must have completed an educational program in compliance with the National Standards for Diabetes Self-Management Education established by ADA. In contrast, several states required educators to be licensed professionals with expertise in diabetes but did not define the term expertise. Eight states referred to ADA’s national standards in setting their requirements for diabetes education programs. Some of these states required programs to be consistent with these standards, while others mentioned them as an example of acceptable standards. Among the 47 states whose laws or regulations required coverage of diabetes supplies, specific coverage requirements varied. For example, 19 states did not specify which supplies must be covered; instead, these states typically required coverage of all medically necessary equipment and supplies prescribed by a physician. The remaining 28 states specified covered supplies, either in laws or regulations, but the number of supplies varied among the states. For example, Michigan had requirements related to insulin, blood glucose monitors, test strips, lancets, lancet devices, syringes, and insulin pumps. In contrast, Mississippi required coverage of equipment and supplies, including supplies used in connection with blood glucose monitoring and insulin administration, but did not specify which supplies. Some states that listed covered supplies also prescribed procedures for adding new supplies to the list. For example, in New Jersey, the Commissioner for Insurance, in consultation with the Commissioner of Health, may update the list of supplies. While nearly all states have required some coverage of diabetes services or supplies in the insurance policies they regulate, some states have authorized a class of health insurance policies that are not bound by many of the state coverage requirements, which may include those for coverage of diabetes services and supplies. Known as “flexible health benefit” or “limited-benefit” policies, and typically marketed to small employers or individuals, such policies may, through lower premiums, reduce the cost of coverage. At least two states, Louisiana and Arkansas, have authorized limited-benefit policies that are not bound by requirements related to diabetes services and supplies. Louisiana has authorized such policies for individuals not otherwise able to obtain health coverage and for small employers (3–35 employees), and Arkansas has authorized them for all groups, regardless of size. ADA is concerned that limited-benefit policies may not provide sufficient coverage of the services and supplies that individuals with diabetes need to manage their condition. The 3 largest plans participating in FEHBP—Blue Cross and Blue Shield, Mail Handlers, and Government Employees Hospital Association, Inc.— and the 13 large-employer self-funded plans we contacted covered most of the diabetes services and supplies we reviewed. All 16 plans covered at least 7 of the 10 diabetes services, as well as at least five of nine diabetes supplies. Few of the plans we contacted placed limits on coverage for diabetes services and supplies. The three largest FEHBP plans covered at least 8 of the 10 diabetes services we reviewed (see table 2). Both diabetes education and medical nutrition therapy were covered by two of the three plans, although one plan placed conditions on these services: diabetes education was covered when provided at a hospital and medical nutrition therapy when provided by a physician. The three plans stated that coverage requirements for diabetes services and supplies applied only in cases of medical necessity. The plans generally did not, however, set monetary limits on their coverage for diabetes services. One exception was smoking cessation therapy, for which one plan set $100 lifetime limits per enrollee for both counseling and drug therapy. Another plan set $100 lifetime limits per enrollee for smoking cessation counseling. The three FEHBP plans all covered at least seven of nine diabetes supplies, including blood glucose monitors, glucose control solutions, test strips, lancets and lancet devices, insulin, insulin pumps, and disposable needles and syringes. One plan did not cover alcohol swabs, and two plans did not cover therapeutic shoes. One plan limited its coverage of supplies; specifically, this plan set lifetime durable medical equipment limits of $10,000 per person for specific supplies, including blood glucose monitors and insulin pumps. Each of the 13 large employers’ self-funded health plans we reviewed covered at least 7 of 10 diabetes services, specifically, blood glucose, lipid, and urine tests; eye and foot exams; blood pressure management, and influenza vaccinations. The remaining 3 services were covered by at least 9 plans (see fig. 2). Among these plans, we found limits on coverage only for smoking cessation therapy. One plan, for example, had a lifetime maximum of three drug therapy treatments for smoking cessation, and another plan had a maximum of two smoking-cessation programs per lifetime for each enrollee for both counseling and drug therapy. In a few cases, the plans specified certain conditions for coverage. For example, among the 11 plans offering coverage of diabetes education, 4 did so only if an employee with diabetes was enrolled in the plan’s diabetes management program. Three of the 10 plans offering coverage of medical nutrition therapy did so only as part of their diabetes management program.