Aug 04, 2011

Better Health and Lower Costs for Medicare Beneficiaries

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By Don Berwick, Administrator, Centers for Medicare & Medicaid Services. Cross-post from

It’s been a big summer for the millions of Americans who are benefitting from improved Medicare coverage thanks to the Affordable Care Act. The benefits are clear: More people are getting preventive services to keep them healthy and people with high prescription drug costs are seeing the donut hole coverage gap starting to close – lowering the cost of drugs so that people don’t have to worry about being able to afford the care they need. Take a look at the past few months:


  • June:
    • Through the end of June, 899,000 Americans with Medicare have benefited from the discount on brand name drugs in the Medicare Part D "donut hole" coverage gap -- an increase of over 420,000 individuals in the month of June alone.
    • These discounts have saved seniors and people with disabilities a total of $461 million, including $200 million in June alone!
  • July:
    • Through the end of July, 17.3 million people with traditional Medicare, or 51.5 percent, have received one of more free preventive services. 
    • During the same time period, over 1 million Americans with traditional Medicare have taken advantage of Medicare’s new free Annual Wellness Visit, up from 780,000 in mid-June;

To learn more about these new benefits, check out the Medicare campaign, “Share the News, Share the Health”, to learn about the importance of prevention for people with Medicare.

But the good news doesn’t stop here. Over the coming years, provisions of the Affordable Care Act will help close the donut hole coverage gap completely. Here is a sense of what Medicare beneficiaries can look forward to:

  • 2013: You will pay less and less for your brand-name Part D prescription drugs in the donut hole.
  • 2020: The coverage gap will be closed, meaning there will be no more “donut hole,” and you will only pay 25% of the costs of your drugs until you reach the yearly out-of-pocket spending limit.
The chart below shows Medicare prescription drug savings over time:
  You Will Pay This Percentage for Brand-name Drugs in the Coverage Gap YouWill Pay This Percentage for Generic Drugs in the Coverage Gap
2011 50% 93%
2012 50% 86%
2013 47.5% 79%
2014 47.5% 72%
2015 45% 65%
2016 45% 58%
2017 40% 51%
2018 35% 44%
2019 30% 37%
2020 25% 25%

Source: Centers for Medicare and Medicaid Services

This all amounts to even more examples of how the Affordable Care Act is providing better health care for people covered by Medicare and making a difference in the lives of millions of Americans.