President Obama’s healthcare reform law will save the Medicare program roughly $200 billion by 2016, according to an analysis from the program’s actuaries.
The report, released by the Centers for Medicare and Medicaid Services (CMS), said the law will produce savings for the Medicare trust fund while also saving seniors nearly $60 billion in out-of-pocket costs.
The biggest Medicare savings come from cuts to doctors, hospitals and other healthcare providers, as well as private insurance companies. Together, those two categories of cuts save Medicare more than $150 billion, according to the CMS report.
CMS said the policies in the healthcare law also have the potential to produce more significant long-term savings, in part by shifting the healthcare system to pay more for quality than quantity of treatments.
The healthcare law is also saving seniors money, CMS said — about $59 billion by 2016, and more than $200 billion through 2021.
The law gradually closes the “doughnut hole” in which seniors have to pay for all of their prescription drugs, and it makes certain preventive services available without a co-pay.
“In the short term, both taxpayers and beneficiaries will save billions thanks to the health care law,” acting CMS Administrator Marilyn Tavenner said in a statement. “Over the long run, the Affordable Care Act will allow us to invest in new models of providing care that will save money and deliver higher quality care.”