New Report shows Average Affordable Care Act Savings of $3,500 for Medicare Beneficiaries

by Rebecca Farley on December 6, 2010

A new analysis issued by the U.S. Department of Health and Human Services estimates that under the Affordable Care Act, individuals enrolled in traditional Medicare will see average savings of more than $3,500 over the next 10 years. Savings will be even higher – as much as $12,300 over the next 10 years – for seniors and people with disabilities who have high prescription drug costs.

The analysis indicates that health reform will help lower costs for Medicare beneficiaries by slowing the growth of cost-sharing in Medicare, in particular by closing the Part D coverage gap (or “donut hole”).  So far in 2010, more than 1.8 million individuals who reached the donut hole received a one-time $250 rebate check, and checks will continue to be distributed to those who enter the donut hole this year. Beginning in 2011, beneficiaries who reach the donut hole will receive 50% discounts on covered brand name Part D prescription drugs.

Also in 2011, seniors and people with disabilities on Medicare will be able to access certain preventive services and annual wellness visits without co-pays or other cost-sharing. Additional steps toward closing the donut hole will continue until 2020, when the coverage gap will be completely closed. See this National Council fact sheet for more details on closing the donut hole.

The report estimates that total savings per beneficiary enrolled in traditional Medicare will be $86 in 2011, rising to $649 in 2020.   For a beneficiary with spending in the donut hole, estimated savings increase from $553 in 2011 to $2,217 in 2020.

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