ACA’s Gradual Closure of Part D “Donut Hole” Saves $1,265 Per Beneficiary

Millions of Medicare beneficiaries have seen lower costs on prescription drugs and the use of preventive services has expanded in 2013 as a result of the enactment of the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) (together referred to as ACA), according a CMS news release. The ACA has made prescription drug coverage (Medicare Part D) more affordable by gradually closing a gap in coverage known as the “donut hole” and has made preventive services available without cost-sharing. The amount of money saved on prescription drugs in 2013 and the number Medicare beneficiaries receiving of preventive services have increased substantially compared to the 2012 numbers. 

Prescription Drugs

Sections 3301, 3314 of PPACA and section 1101 of HERA changed prescription drug coverage by gradually closing the gap in coverage when beneficiaries had to pay the full cost of their prescriptions out of pocket before catastrophic coverage for prescriptions took effect. The savings provided to Medicare beneficiaries and Medicare coverage will gradually increase until 2020, when the donut hole will be closed. Since enactment of the ACA, CMS has taken the following actions: (1) in 2010, beneficiaries who reached the donut hole received a $250 rebate; (2) in 2011, beneficiaries in the donut hole began receiving discounts on covered brand-name drugs and savings on generic drugs; (3) in 2014, beneficiaries who fall into the donut hole will receive discounts and savings of about 53 percent on the cost of brand name drugs and about 28 percent on the cost of generic drugs.

According information HHS provided to CMS, “7.9 million seniors and people with disabilities who have Medicare coverage have saved $9.9 billion on prescription drugs, or an average of $1,265 per beneficiary.” In 2013, “4.3 million seniors and people with disabilities who have Medicare coverage saved $3.9 billion, or an average of $911 per beneficiary,” while in 2012, “3.5 million beneficiaries saved $2.5 billion, for an average of $706 per beneficiary.”

Preventive Services

Sections 4103 and 4105 of the ACA eliminated coinsurance and the Part B deductible for recommended preventive services, including many screenings for such medical issues as cancer, alcohol misuse, HIV, diabetes, tobacco use, depression, obesity, and sexually transmitted diseases. HHS estimated that in 2013, 37.2 million Medicare beneficiaries took advantage of at least one of these types of preventive services and more than four million took advantage of the Annual Wellness Visit. In 2012, an estimated 34.1 million Medicare beneficiaries received one or more of these preventive services.