Affordable Care Act to save thousands for Medicare beneficiaries

by Olga Deshchenko, DOTmed News Reporter | November 05, 2010
Traditional Medicare beneficiaries will save an average of more than $3,500 over the next decade under the Affordable Care Act, according to a new analysis released Thursday by the U.S. Department of Health and Human Services.

Seniors and people with disabilities, who have high prescription drug costs, are expected to save even more -- as much as $12,300 over the next 10 years, according to the "Medicare Beneficiary Savings and the Affordable Care Act" report.

Released by the Office of the Assistant Secretary for Planning and Evaluation, the report found that beneficiaries enrolled in traditional Medicare can expect to save $86 in 2011 and look forward to saving $649 in 2020.

According to the analysis, the Affordable Care Act will save Medicare approximately $500 billion over the next decade, "through reduction in extra subsidies paid to Medicare Advantage plans, reductions in the rate of growth in provider payments, and efforts to make the Medicare program more efficient and to reduce waste, fraud and abuse."

Beneficiaries with spending in the "doughnut hole," a gap in coverage, can expect to see an increase in savings from $553 in 2011 to $2,217 in 2020.

"The Affordable Care Act makes Medicare stronger and reduces the burden of health care costs on some of our most vulnerable citizens," said Kathleen Sebelius, secretary of HHS, in prepared remarks. "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."