Affordable Care Act Drives Cost Savings Of $3,500 for Medicare Beneficiaries in Next Decade

A new report released by the  U.S. Department of Health and Human Services estimates that under the Affordable Care Act, average savings for those enrolled in traditional Medicare will amount to more than $3,500 over the next 10 years.  The report cites that savings with the new program maybe even higher for those who have high prescription drug costs.  The report, authored by the Office of the Assistant Secretary for Planning and Evaluation (ASPE), shows that the Affordable Care Act helps lower costs for those on Medicare by slowing the growth of cost-sharing in Medicare. 

"The Affordable Care Act makes Medicare stronger and reduces the burden of health care costs on some of our most vulnerable citizens," said Secretary Kathleen Sebelius.  "The law improves benefits for seniors and people with beneficiaries who rely on Medicare and ensures that Medicare will be there for current and future generations by extending the life of the Medicare Trust Fund.  These benefits and savings are only possible with the continued implementation of the Affordable Care Act."

According to the ASPE, the progress made to close the Part D coverage gap known as the "donut hole" will produce the greatest cost savings as next year people in the donut hole will receive 50 percent discounts on covered brand name Part D prescription drugs and have access to a number of recommended preventive services and annual wellness visits at no additional cost.  Total savings per beneficiary enrolled in traditional Medicare are estimated to 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.


"The savings that seniors and people with disabilities on Medicare are seeing are due to critical improvements the Affordable Care Act makes to Medicare," said Assistant Secretary for Planning and Evaluation, Sherry Glied.  "Reducing waste, fraud and abuse, improving the quality of care beneficiaries receive, and making the program more efficient all contribute to lower cost increases across the system."

The see the full analysis:  Medicare Beneficiary Savings and the Affordable Care Act