Healthcare law has saved seniors $460M on drugs, HHS says

Seniors have saved more than $460 million on prescription drugs because of healthcare reform, the Health and Human Services Department said Thursday.

As part of the reform law, the pharmaceutical industry agreed to offer a 50 percent discount for brand-name prescription drugs in the Medicare “doughnut hole” — the coverage gap in which seniors pay for their drugs out of pocket.

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Nearly 900,000 seniors have received that discount, at a total savings of $461 million, according to HHS. 

The department also said premiums for prescription drug coverage will decrease slightly next year. The average premium will fall roughly $1, holding steady at around $30, according to an HHS release.

The insurance industry touted the success of Medicare’s prescription drug program — which many conservative policy experts see as a good model for other parts of the healthcare system. 


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“Medicare beneficiaries will have more affordable prescription drug coverage next year as a result of vigorous competition in the Part D program and Medicare drug plans’ efforts to encourage seniors to choose the most affordable medicines,” America’s Health Insurance Plans said in a statement.

Seniors can chose from a variety of Part D plans, and Medicare chief Don Berwick said competition “clearly helps” keep premiums from rising. But he warned against overextending the lessons of Part D.

Rep. Paul Ryan (R-Wis.) has made comparisons to the drug program in his push to transform Medicare into a sort of voucher system. His plan would phase out the existing program and move seniors to private insurance plans, similar to the range of Part D policies from which seniors can choose.

Berwick, however, said Thursday’s figures show that the existing structure is working.

“Remember that the Ryan plan is very draconian,” he said on a conference call with reporters.

Separately, HHS said 17 million seniors have received at least one preventive healthcare service without a co-pay. The healthcare law eliminated co-pays for many preventive services under Medicare and will ultimately do the same for private insurance.