United States Department of Health and Human Services announced that millions of seniors and Americans with disabilities continued to see savings on prescription drugs and improved benefits in 2015 as a result of the Affordable Care Act.
Discounts of over $20.8 billion in prescription drugs were given to nearly 10.7 million Medicare beneficiaries – resulting in an average discount of $1,945 per beneficiary – since the enactment of the Affordable Care Act. In just 2015 alone, nearly 5.2 million senior citizens and citizens with disabilities received discounts of over $5.4 billion – an average discount of $1,054 per beneficiary. Compared to the 2014 average discount of $941 per beneficiary, the savings have increased. In 2014, 5.1 million Medicare beneficiaries received discounts of $4.8 billion.
Not only does Medicare offer prescription drug rebate benefits, but Medicare beneficiaries benefit from being able to receive certain recommended preventive services with no copay, or coinsurance. In 2015, almost 40 million Medicare beneficiaries (including those enrolled in Medicare Advantage), had at least one preventive service with no copay or deductible, an amount slightly higher than 2014. Additionally, nearly nine million Medicare beneficiaries took advantage of an Annual Wellness Visit in 2015.
According to the Centers for Medicare and Medicaid Services (CMS) Acting Administrator Andy Slavitt, “Medicare consumers are now more engaged and empowered in t heir own health thanks to the Affordable Care Act. Millions are now able to access more affordable prescription medicine for their chronic conditions and millions more are staying healthier by accessing preventive services, especially vital for people living with disabilities or growing older.”
How is this Possible?
Drug Costs
The Affordable Care Act makes Medicare prescription drug coverage more affordable by slowly closing the gap in coverage, known as the donut hole. The donut hole was where beneficiaries had to pay the full amount of their prescriptions out of pocket before the catastrophic coverage for prescriptions came into play. The donut hole is expected to be completely closed by 2020.
The donut hole has slowly started to close since the enactment of the Affordable Care Act in 2010, when anyone with a Medicare prescription drug plan who reached the donut hole received a $250 rebate. In 2011, beneficiaries in the donut hole began to receive discounts and savings on covered brand name and generic drugs. In 2016, Medicare Part D recipients who are in the donut hole will receive discounts and savings of 55% on the cost of brand name drugs and 42% on the cost of generic drugs.
Preventive Services
The Affordable Care Act also added annual wellness visit coverage and eliminated coinsurance and the Part B deductible for certain preventive services, including select cancer screenings, cardiovascular disease screenings, and diabetes screenings. By making these, and other, preventive services available with no cost sharing, the Affordable Care Act removed barriers to prevention, and helped everyday Americans to take charge of their own health and monitor their health conditions.
The Bigger Picture
The announcement by HHS about the Affordable Care Act cost savings brought to Medicare is likely part of a larger strategy, whereby HHS is trying to change the healthcare system by paying physicians based on the quality of care they provide to patients. Last January, HHS announced their goal of tying 30% of Medicare payments to quality and value through alternative payment models by 2016, and to 50% of Medicare payments by 2018.
Additionally, a state by state listing of the number of beneficiaries utilizing free preventive services can be found here, and a state by state listing of donut hole savings can be found here.