Affordable Care Act expected to deliver big savings to Medicare recipients

WASHINGTON Under the Affordable Care Act, the average savings for those enrolled in traditional Medicare is expected to amount to more than $3,500 over the next 10 years — and will be even higher for seniors and people with diabetes who have high drug costs — according to the U.S. Department of Health and Human Services.

"The Affordable Care Act makes Medicare stronger and reduces the burden of healthcare costs on some of our most vulnerable citizens," stated HHS 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."

While the average savings is pegged at more than $3,500 over the next 10 years, the 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, released by the Office of the Assistant Secretary for Planning and Evaluation, shows that the Affordable Care Act helps lower costs for those on Medicare by slowing the growth of cost-sharing in Medicare.

Closing the Part D coverage gap known as the "doughnut hole" will produce the greatest cost savings. Already, more than 1.8 million seniors and people with disabilities who have reached the doughnut hole in 2010 received a one-time $250 rebate check, and checks will continue to be distributed to those who enter the doughnut hole this year. Next year, people in the doughnut hole will receive 50% discounts on covered brand-name Part D prescription drugs. Also starting next year, seniors and people with disabilities on Medicare will have access to a number of recommended preventive services and annual wellness visits at no additional cost.

Although all seniors and people with disabilities in Medicare are likely to see savings, the savings will be greatest for those with costly medical conditions or high prescription drug costs. 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 doughnut hole, estimated savings increased from $553 in 2011 to $2,217 in 2020.