Feb.
7, 2013 – A detailed report of the savings and benefits enjoyed by
senior citizens in Medicare, since the passage of the Affordable Care
Act (Obamacare), was released today by the Centers for Medicare and
Medicaid Services. It highlights the $5.7 billion seniors saved by the
shrinkage of the drug programs “donut hole,” the 34 million older
Americans who have used a free preventive health service, program costs
control and fight against fraud.
This report goes into detail on how the savings and
benefits were used and include state-by-state figures on savings and
usage.
Since the law’s enactment, 6.1 million Americans
with Medicare who reached the Part D coverage gap also known as the
“donut hole,” have saved over $5.7 billion on prescription drugs. Drug
savings of $2.5 billion in 2012 are higher than the $2.3 billion in
savings for 2011.
In 2012, people with Medicare in the “donut hole”
received a 50 percent discount on covered brand name drugs and 14
percent discount on generic drugs. As a result of the Affordable Care
Act, coverage for both brand name and generic drugs will continue to
increase over time until the coverage gap is closed.
The Affordable Care Act also removed barriers for
people with Medicare to get preventive services, many of which
previously required cost-sharing for patients. In 2012, many
recommended preventive services were offered to people with Medicare,
with no deductibles or co-pays, meaning that cost is no longer a barrier
for seniors and people with disabilities who want to stay healthy by
detecting and treating health problems early. Use of preventive
services has expanded among people with Medicare.
In 2012 alone, an estimated 34.1 million people
with Medicare benefited from Medicare’s coverage of preventive services
with no cost-sharing.
Under the Affordable Care Act, the report says,
Medicare program also performed well in several other areas in 2012:
• Compared to 2011, people with Medicare
continued to pay moderate premiums for Medicare Part B benefits, which
cover outpatient care, doctors' services, lab tests, durable medical
supplies, and other services.
• Those who enrolled in Medicare Advantage and
prescription drug plans paid average premiums lower than what they paid
in 2010, and they had access to a wide range of plan choices.
• New techniques were implemented to detect,
prevent and fight health care fraud.
Big savings for millions of seniors in donut hold
The Affordable Care Act makes prescription drug
coverage (Part D) for people with Medicare more affordable by gradually
closing the gap in drug coverage known as the "donut hole." For many
people enrolled in Medicare Part D, the “donut hole” occurs after they
and their plan spend a certain amount of money for covered drugs, but
before they hit catastrophic coverage in which they are only responsible
for a small percent of their drug costs. Prior to the Affordable Care
Act, an individual in the “donut hole” had to pay the full costs of
prescription drugs.
The Affordable Care Act is closing the “donut hole”
over time, by first providing a one-time $250 check for those that
reached the “donut hole” in 2010, then by providing discounts on
brand-name drugs for those in the “donut hole” beginning in 2011, and
additional savings each year until the coverage gap is closed in 2020.
People with Medicare in the “donut hole” receive
the discounts when they purchase prescription drugs at a pharmacy or
order them through the mail, until they reach the catastrophic coverage
phase. Since its enactment in 2010, the law has saved 6.1 million
seniors and people with disabilities more than $5.7 billion on
brand-name prescription drugs.
The HHS Assistant Secretary for Planning and
Evaluation projected average savings per Medicare beneficiary to be
approximately $5,000 from enactment through 2022, while those with high
prescription drug spending are projected to save much more – over
$18,000. These projections, in addition to prescription drug plan data
on 2012 spending, demonstrate that those with high drug costs are seeing
considerable savings thanks to the Affordable Care Act.
Savings in both brand-name and generic drugs
In 2012, more than 3.5 million seniors and people
with disabilities who reached the Medicare Part D coverage gap received
discounts on brand- name prescription drugs. These individuals with
Medicare received more than $2.5 billion in discounts, or an average of
$706 per beneficiary. Savings for covered generic drugs while in the
“donut hole” in 2012 totaled $105 million for 2.8 million
beneficiaries.
In 2012, coverage gap discounts allowed seniors and
people with disabilities to save money on a wide variety of drugs,
including:
• Blood Sugar Lowering Drugs: $435,794,413
• Asthma and Other Lung Related (non-cancer)
Disease Drugs: $297,234,514
• Triglyceride and Cholesterol Lowering Drugs:
$240,495,663
• Drugs Used to Lower Blood Pressure:
$138,497,053
Most of the savings are on drugs for chronic
conditions, suggesting that people with Medicare who must continuously
take medications are benefitting most from the help provided by the
Affordable Care Act.
Drugs managing chronic conditions such as high
blood sugar, high blood pressure and high cholesterol accounted for
almost 33 percent of savings and may have helped patients avoid
hospitalization. About 11 percent of the savings were for drugs treating
mental illness, which were designed to help people with Medicare
maintain healthy and active lives.
In 2013, people with Medicare in the coverage gap
are saving 52.5 percent on brand‐names
drugs and 21 percent on generics. These savings will increase each year
until the coverage gap is closed in 2020.
The schedule below illustrates how the coverage gap
will be closed, with information on drug savings for those in the
coverage gap.
Percentage Medicare Part D Enrollees will Save
Brand‐names
Drugs
Generic Drugs
2014
52.5 percent
28 percent
2015
55 percent
35 percent
2016
55 percent
42 percent
2017
60 percent
49 percent
2018
65 percent
56 percent
2019
70 percent
63 percent
2020
75 percent
75 percent
State-by-state
savings from discounts in Donut Hole
*Totals may not sum due to missing codes for some data and
rounding
*The "Overall Total Savings" discount column also includes
amounts for those beneficiaries that received a $250 check
in 2010
*2010 data is as of June 2012; 2011 and 2012 data is as of
December 2012
*Each "Total " column above is based upon independent
analyses and cannot be intermingled
Preventive Services help 34.1 million keep close
tabs on their health
By making certain preventive services available
with no cost-sharing obligations, the Affordable Care Act is helping
Americans take charge of their own health. Americans can now better
afford to work with health care professionals to prevent disease, detect
problems early when treatment works best, and monitor health
conditions.
In the Medicare program, the Affordable Care Act
eliminated coinsurance and the Part B deductible for recommended
preventive services, including many cancer screenings and other
important benefits.
For example, before the law’s passage, a person
with Medicare could pay as much as $160 in cost-sharing for some
colorectal cancer screenings. In addition to covering these preventive
services with no out-of-pocket costs for people with Medicare, the law
also added another important new preventive service — an Annual Wellness
Visit with a health professional.
This Visit complements the "Welcome to Medicare"
Visit which allows people joining Medicare to evaluate their current
health conditions, prescriptions, medical and family history and risk
factors, and make a plan for appropriate preventive care with their
primary care professional.
In addition to the Annual Wellness Visit, Medicare
has added coverage of new preventive services through its National
Coverage Determination process which are exempt from both the Part B
deductible and coinsurance/copayment since enactment of the Affordable
Care Act including, for example, annual depression screenings.
Traditional Medicare
Since becoming available without cost-sharing in
2011, over 30.5 million people with traditional Medicare (79.5 percent)
have taken advantage of one or more free preventive services. That
includes 2,951,704 African Americans (73.3 percent), 638,512 Hispanic
persons (73.9 percent), 135,803 American Indians (69.7 percent), and
583,540 Asian‐Americans
(80.9 percent). Last year alone, nearly 26.1 million seniors and people
with disabilities with traditional Medicare (about 73.5 percent), used
at least one free preventive service.
The tables below present the cumulative number of
unique enrollees in traditional (Part B) Medicare who used free
preventive services in 2011 and 2012.
Medicare Advantage (Part C) Program
In 2012, all Medicare contracting health insurance
plans (or “Medicare Advantage” plans) that serve people with Medicare
offered recommended preventive services without cost-sharing. In 2012,
about 10.9 million Americans were enrolled in a non-employer Medicare
Advantage plan that waived cost‐sharing
for recommended preventive services. Assuming that in 2012, people in
these plans utilized preventive services at the same rate as those in
traditional Medicare, an estimated 8 million people in a non-employer
Medicare Advantage plans benefited from Medicare’s coverage of
preventive services with no cost-sharing.
Free Preventive Services use by state
State or Territory
Overall
2011
2012
Total Savings
Total Gap Discount Amount
Total Gap Discount Amount
Total Number of Beneficiaries
Average Discount per Beneficiary
Nation
$5,760,182,946
$2,311,220,975
$2,502,799,722
3,547,246
$706
Alabama
$77,248,493
$31,807,551
$31,020,512
48,264
$643
Alaska
$4,059,730
$1,685,133
$ 1,794,910
2,278
$788
Arizona
$102,237,394
$39,489,954
$44,963,599
65,267
$689
Arkansas
$50,287,595
$21,076,421
$20,151,382
32,420
$622
California
$453,865,739
$182,381,722
$182,776,196
299,896
$609
Colorado
$59,645,855
$24,459,701
$24,339,969
37,733
$645
Connecticut
$78,759,336
$26,238,636
$41,932,782
47,677
$880
Delaware
$23,199,385
$10,010,926
$9,945,279
12,134
$820
District Of Columbia
$3,877,623
$1,638,772
$1,554,101
2,319
$670
Florida
$378,403,475
$152,489,277
$160,882,589
237,344
$678
Georgia
$161,956,926
$62,484,234
$72,511,462
99,057
$732
Guam
$396,918
$193,400
$151,268
242
$625
Hawaii
$20,299,348
$7,266,854
$6,931,057
18,474
$375
Idaho
$22,498,985
$9,225,783
$9,076,120
14,584
$622
Illinois
$235,327,301
$101,529,128
$95,923,083
133,889
$716
Indiana
$144,142,629
$61,466,902
$60,251,646
85,784
$ 702
Iowa
$64,928,785
$27,600,109
$25,848,452
39,260
$ 658
Kansas
$59,331,172
$24,968,485
$24,040,920
36,383
$661
Kentucky
$111,548,906
$43,289,351
$50,916,143
72,391
$703
Louisiana
$88,538,619
$32,316,242
$42,280,622
60,016
$ 704
Maine
$16,777,237
$6,775,456
$6,738,800
11,413
$590
Maryland
$84,167,415
$32,760,447
$37,572,535
48,949
$768
Massachusetts
$96,478,961
$39,363,887
$39,401,173
59,062
$667
Michigan
$153,484,151
$51,330,931
$79,375,077
106,707
$744
Minnesota
$88,256,958
$36,587,311
$34,886,726
54,175
$644
Mississippi
$50,711,580
$21,440,317
$20,640,606
32,649
$632
Missouri
$119,340,191
$49,676,876
$48,850,222
75,201
$650
Montana
$16,312,364
$6,873,650
$6,554,211
9,992
$656
Nebraska
$37,869,126
$16,129,674
$15,237,679
23,049
$661
Nevada
$32,957,815
$13,138,217
$13,511,767
22,122
$611
New Hampshire
$20,592,230
$8,764,923
$8,261,770
12,400
$666
New Jersey
$298,658,849
$100,215,225
$165,432,302
169,373
$977
New Mexico
$28,824,261
$9,785,022
$14,035,655
18,867
$744
New York
$407,663,891
$174,321,559
$170,460,384
226,569
$752
North Carolina
$168,022,642
$69,004,496
$70,173,968
106,207
$661
North Dakota
$14,605,374
$6,324,593
$5,576,642
9,069
$615
Northern Marianas
$20,778
$7,400
$11,628
14
$831
Ohio
$278,731,176
$103,052,894
$138,548,148
178,931
$ 774
Oklahoma
$73,501,520
$30,231,254
$29,036,648
50,306
$577
Oregon
$62,104,279
$25,284,269
$24,228,337
41,787
$580
Pennsylvania
$392,036,508
$162,464,895
$167,692,364
222,703
$753
Puerto Rico
$138,997,203
$60,344,237
$56,178,122
85,781
$655
Rhode Island
$20,564,235
$8,599,052
$8,006,683
13,834
$579
South Carolina
$84,380,387
$34,834,645
$35,663,279
52,686
$677
South Dakota
$16,514,484
$7,131,754
$6,415,501
9,997
$642
Tennessee
$124,281,720
$52,445,394
$49,981,151
80,991
$617
Texas
$338,487,681
$142,557,143
$140,233,380
206,304
$680
Utah
$33,522,667
$13,125,156
$14,767,407
20,994
$703
Vermont
$11,778,974
$5,103,378
$4,890,789
6,390
$765
Virgin Islands
$1,111,261
$465,126
$447,678
717
$624
Virginia
$131,746,125
$52,691,826
$57,675,792
80,522
$716
Washington
$94,903,807
$38,175,084
$40,929,219
56,996
$718
West Virginia
$69,376,641
$25,993,424
$33,655,461
37,752
$891
Wisconsin
$103,180,245
$40,549,410
$46,472,971
63,553
$731
Wyoming
$8,938,778
$3,745,183
$3,710,847
5,421
$685
*Totals may not sum due to missing codes for some data and
rounding
*The "Overall Total Savings" discount column also includes
amounts for those beneficiaries that received a $250 check
in 2010
*2010 data is as of June 2012; 2011 and 2012 data is as of
December 2012
*Each "Total " column above is based upon independent
analyses and cannot be intermingled
Premiums remain steady for people with Medicare
People with Medicare can be assured they are part
of a program that strives to deliver better benefits while curbing
costs. Most seniors and people with disabilities will pay the standard
Medicare Part B premium of $104.90 per month in 2013, approximately $4
lower than the amount projected in early 2012. Part B benefits include
certain doctors’ services, outpatient care, medical supplies, and
preventive services. Premiums for Part B have gone up slowly over the
past five years – an average of less than 2 percent per year.
For the few people with Medicare who are affected,
the 2013 Part A premium is $441, down from $451 in 2012. Approximately
1.3 percent of people with Medicare pay a premium for Medicare Part A
services. Beneficiaries who do not qualify for premium-free Part A
services include those who have not paid Medicare payroll taxes for 40
quarters of employment or who are not are married to a person who
qualifies for premium-free Part A services. Individuals who have worked
between 30 and 39 quarters of coverage are eligible to pay a reduced
premium. The Part A benefit covers inpatient hospital stays, care in a
skilled nursing facility, hospice care, and some home health care.
Using authority granted by the Affordable Care Act,
CMS continues to protect people enrolled in Medicare Advantage plans
from significant increases in costs or cuts in benefits. Access to
supplemental benefits remains steady, and beneficiaries’ average
out-of-pocket spending remains constant. The average projected premium
for 2013 increased by only $1.47 from last year, averaging to $32.59;
2013 projected premiums are 10 percent below 2010 premiums.
Not only does access to Medicare Advantage remain
strong, as 99.6 percent of Medicare beneficiaries have access to a
Medicare Advantage plan in 2013, people with Medicare have access to a
wide range of high-quality plan choices, with more four and five star
plans than were previously available. On average, there are 28
non-employer Medicare Advantage plans to choose from in nearly every
county across the country.
The average premium for prescription drug plans
will remain nearly the same in 2013. Based on plans’ projections, the
average 2013 monthly premium for basic prescription drug coverage is
expected to be $30, while average premium for 2012 was $29.67. New
tools from the health reform law and slow growth in Medicare drug
spending have kept the cost of prescription drug coverage from growing.
Obamacare helping crack down on fraud
Seniors and people with disabilities in Medicare
are benefitting from a more secure program. The Affordable Care Act
contains new tools and enhanced authority to crack down on criminals who
are looking to defraud Medicare. These provisions, many of which have
been in effect since 2010, are protecting seniors and taxpayers from
fraudsters. As a result of those efforts, we recovered record amounts of
fraudulent payments, totaling $10.7 billion from 2009 to 2011.
In 2012, the Affordable Care Act continued to make
a significant impact in the fight against fraud by:
• Increasing the federal sentencing guidelines
for health care fraud offenses by 20‐50
percent for crimes that involve more than $1 million in losses. The law
establishes penalties for obstructing a fraud investigation and makes it
easier for the government to recapture any funds acquired through
fraudulent practices.
• Stopping bad actors from entering the system,
by making categories of providers and suppliers who have historically
posed a higher risk of fraud or abuse undergo a higher level of scrutiny
than others before enrolling or re‐enrolling
in the Medicare, Medicaid, or the Children’s Health Insurance Program
(CHIP). From March 2011 through the end of 2012, over 400,000 providers
and suppliers have been subject to the new screening requirements.
Almost 150,000 providers and suppliers lost the ability to bill the
Medicare program due to the Affordable Care Act requirements and other
proactive initiatives.
• Fostering better coordination among states,
CMS, and law enforcement partners at the Office of Inspector General and
Department of Justice. New rules authorize CMS to suspend Medicare
payments to providers or suppliers during the investigation of a
credible allegation of fraud. CMS suspended or took other administrative
actions against 160 providers in three coordinated takedowns.
• Providing an additional $350 million over 10
years to ramp up anti‐fraud
efforts, including increasing scrutiny of claims before they are paid,
investments in sophisticated data analytics, and more “feet on the
street” law enforcement agents and others to fight fraud in the health
care system.
• Expanded funding for Senior Medicare Patrols –
groups of senior citizen volunteers who educate and empower their peers
to identify, prevent and report health care fraud. Additionally, to make
spotting fraud easier for seniors, CMS redesigned the statement that
informs beneficiaries about their claims for Medicare services, making
it clearer which information to check and how to report potential fraud.
President Obama has made fraud prevention a
cabinet-level priority with the creation of the Health Care Fraud
Prevention and Enforcement Action Team (HEAT) in 2009. This is a joint
effort between HHS and DOJ to fight health care fraud by increasing
coordination, intelligence sharing and training among investigators,
agents, prosecutors, analysts, and policymakers.
A key component of HEAT are the Medicare Strike
Force teams which are comprised of interagency teams of analysts,
investigators, and prosecutors who can target emerging or migrating
fraud schemes, including fraud by criminals masquerading as health care
providers or suppliers.
This effort received a boost in 2012 with the
formation of a ground-breaking new Healthcare Fraud Prevention
Partnership between HHS, DOJ and private organizations designed to find
and stop scams that cut across public and private payers. This
partnership will help those on the front lines of industry anti-fraud
efforts share their insights with investigators, prosecutors,
policymakers, and others.
The Medicare Strike Force coordinated three major
takedowns in 2012. The largest action was in May 2012 when 107
individuals, including doctors, nurses and other licensed medical
professionals, were charged in seven cities for their alleged
participation in Medicare fraud schemes involving more than $452 million
in alleged false billing. This coordinated takedown involved the highest
amount of false Medicare billings in a single takedown in Strike Force
history. HHS also suspended or took other administrative action against
52 providers, using authority under the Affordable Care Act to suspend
payments until an investigation is complete.
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