Affordable Care Act Savings Do Not ‘Cut’ Medicare Benefits

Affordable Care Act Reduces Future Medicare Spending, But “Does Not Cut That Money From The Program.” According to PolitiFact: “The legislation aims to slow projected spending on Medicare by more than $500 billion over a 10-year period, but it does not cut that money from the program. Medicare spending will increase over that time frame.”  [PolitiFact.com, 6/28/12]

GOP Plan Kept Most Of The Savings In The Affordable Care Act. According to the Washington Post’s Glenn Kessler: “First of all, under the health care bill, Medicare spending continues to go up year after year. The health care bill tries to identify ways to save money, and so the $500 billion figure comes from the difference over 10 years between anticipated Medicare spending (what is known as ‘the baseline’) and the changes the law makes to reduce spending. […] The savings actually are wrung from health-care providers, not Medicare beneficiaries. These spending reductions presumably would be a good thing, since virtually everyone agrees that Medicare spending is out of control. In the House Republican budget, lawmakers repealed the Obama health care law but retained all but $10 billion of the nearly  $500 billion in Medicare savings, suggesting the actual policies enacted to achieve these spending reductions were not that objectionable to GOP lawmakers.” [WashingtonPost.com, 6/15/11, emphasis added]

• Campaign Won’t Say Whether Jesse Kelly Supports GOP Budget That Retains Savings. According to the New York Times’ blog “The Caucus”: “John Ellinwood, a spokesman for Mr. Kelly, would not say whether the candidate supports the Ryan budget or the House Republican decision to maintain the Medicare cuts he is decrying.” [NYTimes.com, 5/3/12]

Affordable Care Act Ends “Overpayments” To Private Medicare Advantage Plans

Medicare Advantage Is A Private Alternative To Traditional Medicare. According to the Kaiser Family Foundation: “Since the 1970s, Medicare beneficiaries have had the option to receive their Medicare benefits through private health plans, mainly health maintenance organizations (HMOs), as an alternative to the federally administered fee-for-service Medicare program.  The Balanced Budget Act (BBA) of 1997 named Medicare’s managed care program ‘Medicare+Choice’ and the Medicare Modernization Act (MMA) of 2003 renamed it ‘Medicare Advantage.’” [KFF.org, November 2011]

New England Journal Of Medicine: Affordable Care Act Eliminates “Substantial Overpayments” To Medicare Advantage Plans. From an article by Robert A. Berenson in The New England Journal of Medicine: “[T]he currently projected savings come from two main sources: reduced payments to private Medicare Advantage plans and reduced payment updates for hospitals and most other providers. A phased elimination of the substantial overpayments to Medicare Advantage plans, which now enroll nearly 25% of Medicare beneficiaries, will produce an estimated $132 billion in savings over 10 years… The Medicare Payment Advisory Commission (MedPAC) has been calling for such fee reductions for years, to keep Medicare Advantage from undermining traditional Medicare. The ACA also produces nearly $200 billion in savings by assuming that providers can improve their productivity as firms in other industries have done. On the basis of this presumed improvement, the law reduces Medicare’s annual “market basket” updates for most types of providers — a provision that has generated controversy. [The New England Journal of Medicine, 7/8/10]

“Overpayments” To Medicare Advantage Drive Up Premiums For Medicare Beneficiaries. According to the Center on Budget and Policy Priorities: “In 2010, Medicare is estimated to pay private Medicare Advantage health plans between 9 and 13 percent more per enrollee than it costs to cover the same person under traditional Medicare. These overpayments, which average more than $1,100 for each Medicare Advantage beneficiary, cost Medicare nearly $44 billion between 2004 and 2009. Despite insurers’ claims, a large portion of the overpayments benefit insurers rather than provide additional benefits to enrollees. For example, the Medicare Payment Advisory Commission (MedPAC) has found that among private fee-for-service plans — one type of Medicare Advantage plan — less than one-fourth of overpayments go toward additional benefits, on average. […] By increasing Medicare costs, these overpayments also drive up premiums for the 31 million seniors and people with disabilities enrolled in traditional Medicare — by $86 for a couple in 2009. In addition, the overpayments weaken Medicare’s long-term finances. [CBPP.org, 7/27/10, internal citations removed]

Affordable Care Act Reduces “Heftier Payments” To Private Medicare Advantage Plans. From FactCheck.org: “Whatever you want to call them, it’s a $500 billion reduction in the growth of future spending over 10 years, not a slashing of the current Medicare budget or benefits. It’s true that those who get their coverage through Medicare Advantage’s private plans (about 22 percent of Medicare enrollees) would see fewer add-on benefits; the bill aims to reduce the heftier payments made by the government to Medicare Advantage plans, compared with regular fee-for-service Medicare.” [FactCheck.org, 3/19/10]

Benefits For Seniors In The Afforadable Care Act

Closing The Donut Hole

“Donut Hole” Is Gap In Drug Coverage For Annual Costs From $2,830-6,440. From CNNMoney: “What’s the donut hole? In addition to a $310 deductible, Medicare beneficiaries pay 25% of their drug costs until the total reaches $2,830 for the year. Then, they fall into a coverage gap. At that point, enrollees must pay all costs out of pocket until their annual expenses exceed $6,440. After that, seniors pay 5% of drug costs for the rest of the year. [CNNMoney, 6/7/10]

Affordable Care Act Eliminates Coverage Gap By 2020. The Kaiser Family Foundation explains how the Affordable Care Act closes the “donut hole”:

• In 2010, Part D enrollees with spending in the coverage gap will receive a $250 rebate.

• Beginning in 2011, Part D enrollees who reach the coverage gap will receive a 50 percent discount on the total cost of their brand-name drugs in the gap, as agreed to by pharmaceutical manufacturers.

• Over time, Medicare will gradually phase in additional subsidies in the coverage gap for brand-name drugs (beginning in 2013) and generic drugs (beginning in 2011), reducing the beneficiary coinsurance rate in the gap from 100 percent to 25 percent by 2020. [KFF.org, March 2010]

The Donut Hole Got “Noticeably Smaller” In 2011, Benefitting Over 2 Million Seniors. As the Associated Press reported: “Medicare’s prescription coverage gap is getting noticeably smaller and easier to manage this year for millions of older and disabled people with high drug costs. […] The average beneficiary who falls into the coverage gap would have spent $1,504 this year on prescriptions. But thanks to discounts and other provisions in President Barack Obama’s health care overhaul law, that cost fell to $901, according to Medicare’s Office of the Actuary, which handles economic estimates. […] More than 2 million beneficiaries already have gotten some help, discounts that have gone largely to middle-class seniors, because the poor are covered in the gap at taxpayer expense. [Associated Press, 11/27/11]

Expanding Preventive Care

Medicare Beneficiaries Receive Free Preventive Services, Annual Wellness Visits Under Health Care Law. As Kaiser Health News reported: “[T]he new health-care law will make it easier and cheaper for seniors to get preventive care. Medicare beneficiaries will be able to receive for free all preventive services and screenings that receive an A or B recommendation for seniors from the U.S. Preventive Services Task Force. That includes mammograms and colorectal cancer screening, bone mass measurement and nutritional counseling for people at risk for diet-related chronic diseases such as diabetes. Medicare beneficiaries will also get a free annual wellness visit under the new law. The visit will cover a number of services, including a health risk assessment and a review of the person’s functional and cognitive abilities. […] Currently, seniors in traditional Medicare pay 20 percent of the cost for most covered preventive services. [KaiserHealthNews.org, 8/10/10]

• More Than 25 Million Seniors Have Received Free Preventive Services. The Centers for Medicare and Medicaid Services reports: “According to preliminary numbers, at least 25,720,996 million Americans took advantage of at least one free preventive benefit in Medicare in 2011, including the new Annual Wellness Visit.  This represents 73.3% of Medicare fee-for-service beneficiaries.” [CMS.gov, 2/15/12]

GOP Argument That ObamaCare Will “Kill Jobs” Has Been Debunked

FactCheck.org: “Job-Killing” Claim Is “Health-Care Hooey.” From FactCheck.org: “The exaggerated Republican claim that the new health care law ‘kills jobs’ was high on our list of the ‘Whoppers of 2011.’ But the facts haven’t stopped Republicans and their allies from making the ‘job-killing’ claim a major theme of their campaign 2012 TV ads. […]All of this is health-care hooey, aimed at exploiting public concern over continuing high unemployment, with little basis in fact. As we’ve said before (a few times), experts project that the law will cause a small loss of low-wage jobs — and also some gains in better-paid jobs in the health care and insurance industries. It’s also expected that more workers will decide to retire earlier, or work fewer hours, when they no longer need employer-sponsored insurance and can obtain it on their own with help from federal subsidies. But that just means fewer people willing to work — and it will free up jobs for those who want them. If anything, that could reduce the jobless rate.” [FactCheck.org, 2/21/12]

• AP: Republicans Misuse CBO Statistics To Support “Job-Killing” Claim About Health Care Overhaul. From the Associated Press:  “A recent report by House GOP leaders says ‘independent analyses have determined that the health care law will cause significant job losses for the U.S. economy.’ It cites 650,000 lost jobs as Exhibit A, and the nonpartisan Congressional Budget Office as the source of the analysis behind that estimate. But the budget office, which referees the costs and consequences of legislation, never produced that number. What CBO actually said is that the impact of the health care law on supply and demand for labor would be small. Most of the lost jobs would come from people who no longer have to work, or can downshift to less demanding employment, because insurance will be available outside the job. ‘The legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent— primarily by reducing the amount of labor that workers choose to supply,’ budget office number crunchers said in a report last year.” [Associated Press via USA Today, 1/24/10]

Affordable Care Act Reduces The Deficit

CBO: The Affordable Care Act Will Reduce Deficits By Over $200 Billion From 2012-2021. According to Congressional Budget Office Director Douglas Elmendorf’s testimony before the House on March 30, 2011: “CBO and JCT’s most recent comprehensive estimate of the budgetary impact of PPACA and the Reconciliation Act was in relation to an estimate prepared for H.R. 2, the Repealing the Job-Killing Health Care Law Act, as passed by the House of Representatives on January 19, 2011. H.R. 2 would repeal the health care provisions of those laws. CBO and JCT estimated that repealing PPACA and the health-related provisions of the Reconciliation Act would produce a net increase in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues. Reversing the sign of the estimate released in February provides an approximate estimate of the impact over that period of enacting those provisions. Therefore, CBO and JCT effectively estimated in February that PPACA and the health-related provisions of the Reconciliation Act will produce a net decrease in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues.” [“CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010,” CBO.gov, 3/30/11]

• July 2012 Report Affirmed Projection That ACA Will Reduce Deficits. According to a Congressional Budget Office Report titled “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision”: “CBO and JCT have not updated their estimate of the overall budgetary impact of the ACA; previously, they estimated that the law would, on net, reduce budget deficits.” [CBO.gov, July 2012]

Repeal Would Have Negative Consequences For Millions

Up To 6.6 Million Young Adults Would Lose Health Care Coverage Through Their Parents’ Plans. From the Los Angeles Times: “President Obama’s healthcare law helped as many as 6.6 million young adults stay on or get on their parents’ health plans in the first year and a half after the law was signed, a new survey indicates. […] Earlier surveys by the federal government found that the number of people ages 19 to 25 without insurance declined after the law was signed, reversing years of erosion in health coverage for young adults.” [Los Angeles Times, 6/8/12]

70,000 Americans With Pre-Existing Conditions Would Lose Insurance Coverage. According to the Department of Health and Human Services, as of May 31, 2012, 73,333 people were enrolled in the Pre-Existing Condition Insurance Plan (PCIP) created by the Affordable Care Act. [HealthCare.gov, 7/13/12]

5.2 Million People Would Have To Pay More For Prescription Drugs. From the Centers for Medicare and Medicaid: “As a result of the Affordable Care Act, over 5.2 million seniors and people with disabilities have saved over $3.9 billion on prescription drugs since the law was enacted.  The Centers for Medicare & Medicaid Services (CMS) also released data today showing that in the first half of 2012, over 1 million people with Medicare saved a total of $687 million on prescription drugs in ‘donut hole’ coverage gap for an average of $629 in savings this year. […] Coverage for both brand name and generic drugs in the gap will continue to increase over time until 2020, when the coverage gap will be closed.” [CMS.gov, 7/25/12]

Over 35 Million Seniors Would Lose Access To Free Preventive Services. The Centers for Medicare and Medicaid Services [CMS] report that 35,106,598 people were enrolled in Medicare Part B in 2011. CMS also reports:

Beginning January 1, 2011, the Affordable Care Act eliminated Part B coinsurance and deductibles for recommended preventive services, including many cancer screenings and key immunizations. The law also added an important new service — an Annual Wellness Visit with a health professional — at no cost to beneficiaries.

According to preliminary numbers, at least 25,720,996 million Americans took advantage of at least one free preventive benefit in Medicare in 2011, including the new Annual Wellness Visit.  This represents 73.3% of Medicare fee-for-service beneficiaries, including 2,404,792 African-American beneficiaries, 537,110 Hispanic beneficiaries, 104,393 American Indian beneficiaries, and 508,398 Asian-American beneficiaries. [CMS.gov, 2/15/12]