Premium and Prescription Savings are Good News for People with Medicare
By Jonathan Blum, CMS Principal Deputy Administrator
The Centers for Medicare & Medicaid Services (CMS) has announced the 2014 Part B premiums in original Medicare and most seniors and people with disabilities will not increase next year, staying at $104.90 a month for Part B premiums.
For the third year in a row Medicare premium costs are meeting or beating expectations. Monthly Medicare premiums in 2013 are lower than the $109.10 they were projected to be. The year before, premium costs came in six dollars lower than the experts predicted. The last five years have been among the slowest periods of average Part B premium growth in the program’s history.
Lower original Medicare costs are just one of the positive changes we’ve seen in Medicare since the Affordable Care Act was signed into law.
Since 2010, more than 7.1 million seniors and people with disabilities who reached the donut hole have saved $8.3 billion on their prescription drugs, an average of $1,167 per person. In 2014, people with Medicare who have entered the donut hole will receive discounts and coverage of about 53 percent on the cost of brand name drugs and 28 percent coverage for the cost of generic drugs. Prescription drug savings and Medicare coverage will gradually increase until 2020, when the donut hole will be closed.
Medicare Advantage plan benefits and prices continue to improve thanks to a new Affordable Care Act star-rating system that pays plans based on quality. Since passage of the Affordable Care Act, average Medicare Advantage premiums are down by 9.8 percent. More beneficiaries are able to access and choose high quality plans – more than half are in four or five-star plans for 2014, up from 37 percent this year.
Other Affordable Care Act changes that pay hospitals and doctors based on the quality of care they deliver for patients—like reducing hospital readmissions, which have started to drop after being stuck for the past five years—are beginning to have an effect. Programs like Hospital Value-Based Purchasing and Accountable Care Organizations are making sure that improved quality of care for patients is at the center of efforts to reduce cost growth. Over the last four years, the stronger anti-fraud measures instituted by the Affordable Care Act has enabled the Obama administration to recover over $14.9 billion for taxpayers.
And health care spending has grown more slowly in the past few years than it has since the 1960s. We’re working hard to make sure these gains continue. Meanwhile, lower costs and better care is great news for the Trust Funds, great news for taxpayers, and really great news for people with Medicare.