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Affordable Care Act Lowered Medicare Beneficiary Costs • Based on an HHS report, “the 2010 health care law will save Medicare beneficiaries $59 billion through 2016 and $208 billion through 2021.” • More than 5.1 million seniors saved an average of $635 per person so far—and will continue to save while the donut hole is closed over the next 10 years. The average person will save nearly $4,200 by 2021, due to the ACA. • Since the Affordable Care Act was enacted, Seniors enrolled in Medicare Advantage plans have seen their monthly premiums decrease by nearly 16 percent while enrollment has increased by 17 percent during this time, surpassing CBO projections. • More than 22.6 million seniors and people with disabilities accessed no-cost-sharing preventive services in 2011. • Millions of women are taking advantage of no-cost sharing preventive health services in 2011, and they will be able to access more comprehensive women’s preventive care beginning August 2012. Wendell Primus, PhD, Senior Policy Advisor, Democratic Leader Nancy Pelosi The Affordable Care Act Improved Medicare’s Solvency • Based on a CMS report, ACA reduced “Medicare costs by $200 billion through 2016,” and ACA improved Medicare solvency by 8 years. CMS Report Health Care Reforms from the Affordable Care Act Savings from the ACA through 2016 Reducing excessive Medicare payments to private insurers in Medicare Advantage $68 billion Reforming provider payments $85 billion Improving patient safety through the Partnership for Patients $10 billion through 2013 Cracking down on fraud and abuse in the Medicare system, and getting the best value for durable medical equipment $7.8 billion Additional provisions, including the net effect of expanded benefits, lowered payments for hospital acquired conditions, readmission reductions, and adjustment to premium subsidies. $41 billion Trustee’s Report Year 2009 Report 2012 Report % Change Change in the 75-Year HI Actuarial Balance 75- Year HI Expenditures (% of Taxable Payroll) Total Medicare Expenditures in 2030 (% of GDP) -3.88 7.34 6.43 -1.35 5.21 5.29 -65% -29% -18% ACA Contributed to Lower Overall Health Spending • Total health spending increasing at slowest rate in 50 years • Through joint efforts by HHS and the Department of Justice, nearly $4.1 billion returned to government in 2011. • Planted many cost control seeds in ACA. Republicans fought these in 2010 election but endorsed them in the Republican budget. Comparative Effective Research Accountable Care Organizations Health Information Technology CMS Center for Innovation Bundling of Payments Reductions in Hospital Readmissions Tax on High Cost Plans Rate Reviews/MLR Follow-on Biologics Patient-Centered Medical Homes Administrative simplification Prevention & Wellness Initiatives Steer people from ER to routine care Create incentives to reduce the number of medical errors Provider Rate Reductions Republican Budget Shifts Costs to Seniors; Causes Medicare to Wither on the Vine and Ends Medicare Guarantee Major Mandatory Health Care Programs Spending Excluding Interest (Percent of GDP) 12 11 10 9 8 7 6 5 4 Actual, 2011 CBO Alternative Fiscal Scenario Republican Budget 2023 CBO Republican Difference Percent Cut Source: CBO 2030 Actual 2011 5 5 0 0% 2040 2050 % of GDP 2023 7 5 2 29% 2030 8.25 5.5 2.75 33% 2040 10.25 6 4.25 41% 2050 11.75 5.75 6 51%