Massachusetts Medicare subscribers save $36.9 million



A total of nearly 63,000 Massachusetts residents enrolled in the Medicare Part D drug program saved $36.9 million in 2011 in lowered drug costs because of provisions in the Affordable Care Act.

The savings were attributable to the health reform law that shrinks the so-called ‘donut hole’ in the Medicare Part D drug program. Massachusetts ranked 18th in the nation for the number of Medicare members helped by the plan, according to Mass Home Care.

When the Medicare Part D program was created, there was a gap in coverage, where most beneficiaries would pay 100 percent of their drug costs while still paying their premiums.  This gap — which occurs after the plan pays a certain amount, but before beneficiaries hit catastrophic coverage — is called the “donut hole.”

The Affordable Care Act is closing the donut hole over time, and according to the federal government, has already saved seniors and people with disabilities over $3 billion on prescription drugs since the law was enacted in March 2010.

In 2011, seniors and people with disabilities who reached the coverage gap in Medicare Part D coverage automatically received a 50 percent discount on covered brand-name drugs and a 7 percent discount on generic drugs.  These discounts will continue to grow over time until the donut hole is closed.

The average beneficiary in Massachusetts saved $587. Of the total Medicare members who saved money on lowered drug costs, 58 percent (36,289) were women.

The Federal Department of Health & Human Services (HHS) estimates that nationally nearly 3.6 million people with Medicare saved $2.1 billion on their prescription drugs in 2011 thanks to the Affordable Care Act.

In 2011, the 3.6 million Americans who hit the donut hole saved an average of $604 on the cost of their prescription drugs. The savings average in Massachusetts was slightly lower, at $587 per beneficiary. National data also show that women especially benefitted from the law’s provision with 2.05 million women saving $1.2 billion on their prescription drugs.

By 2020, the donut hole will be closed completely.  Typical Medicare beneficiaries will save an average of nearly $4,200 from 2011 to 2021. People with high prescription drug costs could save as much as $16,000.

According to HHS, the savings are a product of provisions in the Affordable Care Act and other cost trends that:

•Decrease prescription drug costs for seniors;

•Make preventive services like mammograms free for everyone in Medicare;

•Reduce growth in Part B premiums (for physician services);

•Reduce growth in cost-sharing under both Parts A (hospital care) and Part B.