Donut hole sweetens for Medicare beneficiaries via ACA prescription drug provisions


As far as holes go, the “donut hole” certainly isn’t the worst divot to be down in, for reasons far more practical than just the obviously sweet, according to Health and Human Services (HHS) Secretary Kathleen Sebelius.  

On August 20, the HHS spokeswoman announced that seniors as well as citizens with disabilities saved more than $4.1 billion on prescription drugs already in 2012; individually, those seniors ensnared in the Medicare prescription drug coverage chasm (so dubbed the “donut hole”) have each saved an average of $768. These newfound Medicare reserves have resulted directly from the Affordable Care Act (ACA), Sebelius claimed.

“The healthcare law has saved people with Medicare over $4.1 billion on prescription drugs, and given millions of beneficiaries access to cancer screenings, mammograms and other preventive services for free,” Sebelius said in a press release.  “Medicare is stronger thanks to the healthcare law, saving people money and offering new benefits at no cost to seniors.”

Approximately 18 million people have benefited from the ACA’s shifted stance on prescription drugs, receiving at least one preventative service with no cost to them during the first seven months of 2012. The new healthcare law of the land includes provisions that make Medicare prescription drugs more affordable — whereas a donut hole stay in 2010 only sanctioned a $250 rebate, and in 2011 HHS began implementing a 50 percent discount on covered brand-name drugs and another discount on generic drugs. These discounts will continue to ramp up until 2020, at which point the donut hole will be closed.

As such, HHS argues that the ACA allows for people with Medicare to maintain their health more efficiently. Extra charges for preventative services were common for Medicare cardholders prior to 2011, but now, screenings and other amenities that previously pushed for extra pennies from beneficiaries come free of charge with no deductibles or co-pays. Therefore, cost is no longer a barrier for Medicare constituents to seek the procedures they need.

“In 2012 alone, 18 million people with traditional Medicare have received at least one preventive service at no cost to them.  This includes 1.65 million who have taken advantage of the Annual Wellness Visit provided by the Affordable Care Act – over 500,000 more than had used this service by this point in the year in 2011.  In 2011, an estimated 32.5 million people with traditional Medicare or Medicare Advantage received one or more preventive benefits free of charge,” HHS noted in a statement.

Find state-by-state information on savings in the donut hole here.

Find state-by-state information on utilization of free preventive services here.

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