Hi there -
So listen. First thing, I'm not a doctor. I can't diagnose you, okay?
First thing, it looks like maybe you have genital warts, which is caused by the HPV virus. Don't freak - this is not a big deal. It's estimated that about 88% of people who are sexually active will get HPV in their lifetimes, at least once.
Now, the next steps - please do not do anything else to self-treat this. Even if it isn't warts, you need to leave it alone and get a doctor to see it (and I'm going to tell you how in a minute). Please, like really please, please please, don't ever take any kind of sander to your penis again. Not only does it not cure what is causing these bumps, you are seriously irritating your skin (as you know now), and it has to hurt like hell.
To see a doctor, find a free clinic. Most areas have them. I'm guessing you are in the US since you mention insurance. Google your town and state and "STD Clinic" - like "New York City STD clinics". You can also google "New York City free clinics". Since your diabetes is likely needing some management, a free clinic that does more than just STDs could be a good option. You can also google your county and "health department", like "New York County health department".
You can also try these links -
http://www.ashasexualhealth.org/stdsstis/get-tested/
https://gettested.cdc.gov/
https://yourstdhelp.com/free_clinic_locator.html
Call ahead for any clinic you find - they don't always have the most updated info for addresses, hours, etc.
You can also try Planned Parenthood. They have a sliding fee scale.
All clinics should be able to help you find free or seriously reduced health care as well.
Best of luck.