June 25, 2018
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Medicare drug savings hit $2.1 billion

By Noam N. Levey, Tribune Washington Bureau

WASHINGTON — In the first full year of the new health care law, 3.6 million people in the government Medicare program saved $2.1 billion on prescription drugs in 2011, the Obama administration announced Thursday.

The savings are one of the first tangible benefits of the sweeping overhaul that President Obama signed in March 2010.

The new law’s biggest changes, including the guarantee that all Americans can get health coverage even if they are sick, do not go into effect until 2014.

Obama and his allies have been laboring to rally support in the face of persistent public skepticism that the law will help millions of beleaguered consumers struggling with rising medical bills.

The Medicare prescription drug provision is designed to phase out a gap in coverage for pharmaceuticals that was included in the Part D program when it was created under President George W. Bush.

In 2010, beneficiaries who hit the so-called doughnut hole in coverage received a $250 rebate check under a provision of the new law.

In 2011, the law provided beneficiaries a 50 percent discount on covered brand name drugs and a 7 percent discount on generics when they hit the doughnut hole.

That worked out to an average of $604 per beneficiary, according to the Department of Health and Human Services.

Women in particular benefited from the discount, saving $1.2 billion on prescription medications in 2011, according to administration data.

The drug discounts are slated to rise to 75 percent for brand name and generic drugs by 2020, when the coverage gap will be eliminated altogether.

“As we move forward, we will close the doughnut hole completely, and save even more money for everyone with Medicare,” Secretary of Health and Human Services Kathleen Sebelius said Thursday.

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