CMS NEWS RELEASE
This second annual report details how millions of seniors and people with disabilities with Medicare continued to experience lower costs on prescription drugs and improved benefits in 2012 because of the Affordable Care Act.
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 more than $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 Medicare program also performed well in several other areas in 2012:
• Compared with 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.
Shrinking “donut hole”
The Affordable Care Act makes prescription drug coverage (Part D) for people with Medicare more affordable. It does this 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 who 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 more than 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.
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
• Anti-dementia drugs: $120,878,582
• Drugs used to treat ulcers: $101,888,578
• Cancer drugs: $97,263,505
• Anti-depression drugs: $85,047,907
• Autoimmune disease anti-inflammatory drugs: $56,715,485
• Psychiatric drugs: $56,295,844
• All other drug therapeutic uses: $872,688,178
Most of the savings are on drugs for chronic conditions, suggesting that people with Medicare who must continuously take medications are benefiting 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 |
