Due to Affordable Care Act, People with Medicare will Save $5,000 to $18,000 through 2022, HHS Reports

The U.S. Department of Health and Human Services (HHS) released a new report on Friday, September 21, projecting that the average person with traditional Medicare will save $5,000 from 2010 to 2022 because of the Patient Protection and Affordable Care Act, President Obama’s signature health care law (which some call “Obamacare”).

“Beneficiaries who have high prescription drug spending will save much more – more than $18,000 over the same period,” the new report said.

“I am pleased that the health care law is helping so many seniors save money,” HHS Secretary Kathleen Sebelius said in a news release issued Friday. “A $5,000 savings will go a long way for many beneficiaries on fixed incomes and tight budgets.”

According to the new report, an issue brief from the HHS Office of Assistant Secretary for Planning and Evaluation (ASPE), “The Affordable Care Act favorably affects beneficiary expenditures in four ways:”

• “First, premiums for Part B physician and certain other services are expected to increase at a slower rate than would have occurred without the Affordable Care Act, resulting in lower Part B premiums over time.”
• “Second, beneficiary copayments and coinsurance under Parts A and B will increase more slowly because the Affordable Care Act slows the rate of growth in payments to hospitals and other providers.”
• “Third, closing the Medicare prescription drug coverage gap, often called the “donut hole,” will lower costs for beneficiaries who otherwise would have been required to spend thousands of dollars out of their own pockets for their prescription drugs.”
• Fourth, “the Affordable Care Act provides many preventive services to people with Medicare at no additional cost.”

Savings on Prescription Drugs

In the news release issued by HHS on Friday, September 21, HHS announced that, because of the health care law, more than 5.5 million seniors and people with disabilities saved nearly $4.5 billion on prescription drugs since the law was enacted.

Because of the health care law’s provisions closing a previous coverage gap in the Medicare prescription drug program, known as the “donut hole,” seniors on Medicare have saved an average of $641 per person on prescription drugs in the first eight months of 2012 alone. “This includes $195 million in savings on prescriptions for diabetes, over $140 million on drugs to lower cholesterol and blood pressure, and $75 million on cancer drugs so far this year,” HHS announced.

Under the Affordable Care Act, in 2010, seniors with Medicare who reached the prescription drug donut hole coverage gap received a $250 rebate. In 2011, those with Medicare who reached the donut hole coverage gap began receiving a 50 percent discount on covered brand-name drugs and a discount on generic drugs.

The health care law provides that these discounts and Medicare prescription drug coverage will gradually increase, until the donut hole coverage gap will be fully closed and ended in 2020.

Free Preventive Health Care Services

The health care law makes it easier for people with Medicare to stay healthy, HHS said in its news release. In the first eight months of 2012, more than 19 million people with original Medicare received at least one preventive service at no cost to them, HHS reported.

“Prior to 2011, people with Medicare had to pay for many preventive health services. These costs made it difficult for people to get the health care they needed,” HHS said.

“For example, before the health care law passed, a person with Medicare could pay as much as $160 for a colorectal cancer screening.  Because of the Affordable Care Act, many preventive services are now offered free to beneficiaries (with no deductible or co-pay) so the cost is no longer a barrier for seniors who want to stay healthy and treat problems early.”

“In 2012 alone, 19 million people with traditional Medicare have received at least one preventive service at no cost to them.  This includes 1.9 million who have taken advantage of the Annual Wellness Visit provided by the Affordable Care Act – almost 600,000 more than had used this service by this point in the year in 2011,” HHS reported.

In 2011, an estimated 32.5 million people with traditional Medicare or Medicare Advantage received one or more preventive benefits free of charge, according to HHS.

More Information

For State-by-State information on savings on prescription drug costs under the Affordable Care Act’s provisions closing the donut hole coverage gap, see: a Summary Chart provided by the Centers for Medicare and Medicaid Services (CMS).

For State-by-State information on utilization of free preventive services by Medicare beneficiaries, see: Preventive Services Data provided by CMS

For more information on the new report estimating that the average Medicare beneficiary will save $5,000 from 2010 to 2022, and those with high prescription drug costs will save more than $18,000, as a result of the health care law, see: HHS ASPE Issue Brief of September 21, 2012.

For more news and information about the Patient Protection & Affordable Care Act, President Obama’s signature Health Care Law, and about health care reform, see the HelpingYouCare^® resource pages on VoicesForCare™, including:

• News on Health Care Reform;
• Editorials: What Needs Improvement, With Your Comments;
• Advocacy: Proposals for Reform, With Your Comments;
• Legislation: Pending & Recently Adopted; and
• International Health Care Compare: Information on Health Care & Long-Term Care Solutions in Other Countries.

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