Celebrating Its 48th Year, Data Shows Medicare Program is Strong

Celebrating Its 48th Year, Data Shows Medicare Program is Strong

A day before Medicare’s 48th birthday, the Department of Health and Human Services (HHS) released new information confirming a strong Medicare program. Over 6.6 million people with Medicare have saved over $7 billion on prescription drugs as a result of the Affordable Care Act (ACA). These savings average $1,061 per beneficiary in drug costs while a beneficiary is in the “donut hole” coverage gap that the law closes over time.

In addition, 16.5 million people with traditional Medicare took advantage of at least one free preventive service in the first six months of 2013.

This news also comes at a time of historically low levels of growth in Medicare spending. From 2010 to 2012, Medicare spending per beneficiary grew at 1.7% annually, more slowly than the average rate of growth in the Consumer Price Index, and substantially more slowly than the per capita rate of growth in the economy. All of this good news is a direct result of the the health care reform law.

Savings on Prescription Drugs

Because of the Affordable Care Act, beneficiaries’ out-of-pocket savings on medications continue to grow. As mentioned, over 6.6 million beneficiaries have saved over $7 billion on prescription drugs in the Medicare Part D donut hole since the law was enacted, for an average of $1,061.

People with Medicare in the donut hole now receive discounts and some coverage when they purchase prescription drugs at a pharmacy or order them through the mail, until they reach the catastrophic coverage phase. The Affordable Care Act gave those who reached the donut hole in 2010 a one-time $250 check, then began phasing in discounts and coverage for brand-name and generic prescription drugs beginning in 2011. The law will provide additional savings each year until the coverage gap is closed in 2020.

For more information on how the Affordable Care Act closes the donut hole, see our article: What’s New for Part D in 2013? Lowered Costs, New Covered Drugs, Appeal Changes.

Preventive Services

By making certain preventive services available with no cost-sharing obligations, the ACA also helps Americans take charge of their own health.  People can now better afford to work with health care professionals to prevent disease, detect problems early when treatment works best, and monitor health conditions.

In Medicare, the ACA eliminated coinsurance and the Part B deductible for recommended preventive services, including many cancer screenings and other important benefits. For example, before the law’s passage, a person with Medicare could pay as much as $160 in cost-sharing for some colorectal cancer screenings. Today, that screening is free.

In the first 6 months of 2013, 16.5 million people with traditional Medicare took advantage of at least 1 free preventive service. For more information on the additional coverage for preventive services, see our article: Heath Care Reform Brings Changes to Medicare.

For more information on the health care reform law, visit: healthcare.gov.

This article was edited from a press release from the Department of Health and Human Services.

Karen Fletcher
Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.