The HHS (Department of Health and Human Services) says that the Affordable Care Act is bringing about cheaper prescription costs, much less waste and abuse, better care quality, as well as improved efficiency. A new HHS analysis, issued by the Office of the Assistant Secretary for Planning and Evaluation (ASPE), estimates average savings of over $3,500 over the next decade for individuals enrolled in traditional Medicare. Seniors and disabled patients who tend to have higher prescription and medical costs will likely save up to $12,300 over the coming decade.

Secretary Kathleen Sebelius, said:

The Affordable Care Act makes Medicare stronger and reduces the burden of health care costs on some of our most vulnerable citizens. 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.

The new health legislation helps reduce cost for Medicare beneficiaries by slowing down the growth of Medicare cost-sharing. Closing the donut hole - the Part D coverage gap - will bring about the most significant savings, HHS informs. Over 1.8 million elderly and disabled Americans have reached the donut hole this year and were given a one-off $250 rebate - such payments will continue for others who reach the donut hole in 2010.

People reaching the donut hole in 2011 will get 50% discounts on brand names covered in the Part D prescription plan. Several preventive services and yearly wellness visits will also be available to seniors and patients with disabilities in 2011.

Savings will be considerably higher for patients with disabilities and seniors with the highest prescription and medical costs.

Savings per traditional Medicare enrollee in 2011 will be approximately $86, and $649 by the end of that decade. For those with spending in the donut hole, savings of $553 next year should reach $2,217 by the end of 2020.

Assistant Secretary for Planning and Evaluation, Sherry Glied, said:

The savings that seniors and people with disabilities on Medicare are seeing are due to critical improvements the Affordable Care Act makes to Medicare. 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 Donut Hole The Donut Hole also known as the Coverage Gap is when a person on a Medicare Part D prescription plan stops receiving financial help for their prescription - they have to pay the entire cost of their drugs. For example, a person in 2009 may have had an initial limit of $2,700. As soon as they met that limit they would enter the coverage gap (donut hole) and would be responsible for the next $3,000 in medication costs.

"Medicare Beneficiary Savings and the Affordable Care Act Summary"

Source: HHS



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