The Affordable Care Act Saved Seniors $5B in 2012

While the most controversial provisions of the Affordable Care Act will not go into effect until 2014, one provision has already resulted in significant savings for seniors.  USA Today reports that seniors have saved at least $2.5 billion on prescription medications because of provisions that have narrowed, and will eventually close, the “doughnut hole.”

The savings are the result of pharmaceutical companies giving the government a substantial discount on drugs purchased by seniors in that window when they are not covered by their Part D plans. The Department of Health and Human Services (“HHS”) estimates that this resulted in a savings of $2.3B in 2011, and $2.5B in 2012, which works out to about $700 per person on Medicare.

In 2013, seniors will not fall into the doughnut hole (when they are required to pay the  full cost – after the discount – for their prescription drugs) until their spending has reached $2,970.  By 2020, the gap will be completely closed.

Seniors have saved an additonal $2.5B under the ACA as the result of the requirement that Medicare cover the full cost of certain preventative services, such as an annual physical, mammagrams and colorectal screenings.  Previously, the co-pays for such services were as high as $160.  HHS estimates that at least 34 million Medicare beneficiaries took advantage of this provision in 2012.  This figure does not take into account that the treatment for the conditions that might have been discovered by these screenings is less expensive when the conditions are caught early.

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