Stronger Benefits for Seniors, Billions in Savings This Year

By Kathleen Sebelius, Secretary of Health and Human Services
Posted May 24, 2012

Two years ago, President Obama signed the Affordable Care Act and provided important relief to seniors, including a 50% discount on brand-name prescription drugs for those in the coverage gap known as the “donut hole.”

Prior to the passage of the new health care law, people on Medicare also faced paying for preventive benefits like cancer screenings and cholesterol checks out of their own pockets.  Now, these benefits are offered free of charge to beneficiaries.

These new benefits are already making a difference in communities across the nation.  Before 2011, David Lutz, a community pharmacist from Hummelstown, PA, described customers, “splitting pills, taking doses every other day, missing doses, stretching their medications,” noting that not taking their medications as prescribed was not good for their health.  

But, according to David, this has begun to change since the passage of the Affordable Care Act. “People cannot take their medications if they can’t afford them. This [Affordable Care Act] will make them affordable and they’ll take their medications on time, the way they’re supposed to, which will improve their health,” Lutz says. “There’s no question about it.”

In 2010, for example, those who hit the donut hole received a $250 rebate – with almost 4 million seniors and people with disabilities receiving a collective $1 billion.   In 2011, Medicare beneficiaries received more than $2.1 billion in savings – averaging $604 per person last year – from the 50% discount on brand-name drugs in the donut hole.

And today, we have more good news. Even more seniors and people with disabilities on Medicare have benefited from these important measures:

  • In 2010 and 2011, over 5.1 million people on Medicare saved over $3.2 billion on prescription drugs in the donut hole.  In the first four months of 2012 alone, more than 416,000 people have saved $301.5 million – an average of $724 a person so far this year.
  • In the first four months of 2012, 12.1 million beneficiaries on traditional Medicare received at least one free preventive service.  This includes over 856,000 who have taken advantage of the Annual Wellness Visit – a new benefit that allows patients to meet with their doctors once a year to develop and update a personalized prevention plan.  In 2011, over 26 million beneficiaries in traditional Medicare – received one or more preventive benefit free of charge.

These new benefits will increase over time.  In the coming years, the automatic discount on drugs in the donut hole will expand, and by 2020 the donut hole will be closed completely. And Medicare is growing stronger in other ways as well. Doctors and hospitals are beginning to receive new incentives to provide better care to patients –improving patient safety and lowering costs.  The new law also invests more resources in fighting Medicare fraud, to protect the trust fund, and keep Medicare secure for longer.

Thanks to the Affordable Care Act, seniors and people with disabilities are enjoying a Medicare program that is stronger and working better for David’s community and others all across the country.