Updated March 24 at 6:27pm

Rhode Islanders on Medicare saved $9.9M last year under ACA

Rhode Island seniors and disabled persons with Medicare prescription drug plan coverage saved $9.9 million, or an average of $709 per person, on their prescription drugs in 2013 through the Affordable Care Act’s Medicare discount program, the Centers for Medicare & Medicaid Services reported last week.

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Rhode Islanders on Medicare saved $9.9M last year under ACA


PROVIDENCE – Rhode Island seniors and disabled persons with Medicare prescription drug plan coverage saved $9.9 million, or an average of $709 per person, on their prescription drugs in 2013 through the Affordable Care Act’s Medicare discount program, the Centers for Medicare & Medicaid Services reported last week.

In total, 13,998 beneficiaries of Medicare in Rhode Island have saved $31.3 million since passage of the Affordable Care Act in 2010, the CMS said, contributing to $9.9 billion in Medicare savings nationwide.

In Massachusetts, 67,514 Medicare beneficiaries saved $55.6 million, or an average of $823 per person, last year, with total savings of $156.7 million since the Affordable Care Act was enacted.

“Thanks to the Affordable Care Act, we saw a stronger Medicare program in 2013,” said U.S. Health and Human Services Secretary Kathleen Sebelius. “Seniors are saving billions of dollars on their needed medications and continuing to enjoy benefits that will lead to healthier lives and lower costs in the long run.”

Under the Affordable Care Act’s Medicare Coverage Gap Discount Program, companies that manufacture brand-name prescription drugs must sign agreements with Medicare requiring the companies to offer discounts on brand-name drugs to people who have reached the “doughnut hole,” to a gap in the Medicare prescription-drug benefit before catastrophic coverage for prescriptions takes effect.

In 2014, the CMS said, Medicare Part D beneficiaries who fall into the doughnut hole will receive savings of about 53 percent on the cost of brand-name drugs and 28 percent on the cost of generic drugs. The amount beneficiaries pay will decrease each year until the gap is effectively closed in 2020.

“The Medicare doughnut hole hit seniors hard for years,” said U.S. Sen. Sheldon Whitehouse in a release lauding the impact of the Affordable Care Act. “Now they’re saving hundreds of dollars on their prescriptions, and gaining access to free preventive services they used to have to pay for. The Affordable Care Act is making a big difference to Rhode Island seniors.”


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How about doing a story on the " automatic cuts " to Medicare slated

to take affect on April 1st if Congress does not pass legislation in order

to prevent them? (See Congressman Jim Langevin's letter on the subject

that I received the other day below this message; in dark type….)

This is something I think that our older citizenry who are currently on

Medicare would be greatly interested in reading about; Especially if the cuts are

allowed to be implemented and (more) doctors/hospitals decide to no longer

accept Medicare patients as a result….(!!)

How much will Rhode Islanders' on Medicare save then;

in the event of this occurrence, on April 1, 2014 (?)

Jon K. Polis

East Greenwich

at peterjburns2@verizon.net

Dear Mr. Polis:

Thank you for contacting me about physician payment schedule reform. I appreciate your concern about this important issue, and I welcome the opportunity to correspond with you.

Both Medicare and TRICARE physician payments are governed by a formula called the Sustainable Growth Rate (SGR). The SGR replaced an earlier formula, the Medicare Volume Performance Standard (MVPS), as part of the Balanced Budget Act of 1997. Both the MVPS and SGR were intended to help control overall costs to the Medicare program from payments to physicians. While the MVPS lacked a strong enforcement mechanism, the SGR requires that any scheduled physician payment increases be adjusted based on the previous year's Medicare spending in comparison to gross domestic product growth.

When the SGR was created by Congress, medical inflation was much lower than it is today. The expectation was that the SGR would help marginally control costs without overly affecting beneficiaries or providers. In fact, during its first couple of years, the SGR pushed up reimbursements slightly since the economy was growing faster than Medicare expenditures. However, as the economy began to slow down at the turn of the century and medical inflation began to take off, the SGR turned sharply negative. In 2002, Congress allowed the statutory 4.8 percent decrease in physician payments called for by the SGR to take effect. The next year, the SGR dictated an additional 4.4 percent cut before Congress overruled it.

Since then, as Medicare costs have continued to rise, Congress has acted each year to prevent SGR cuts from taking effect, either replacing them with a small increase in fees or leaving the fee schedule unchanged. Unfortunately, Congress has only done so over short time periods: the last correction to the SGR was set to expire on December 31, 2013. However, as part of the bipartisan budget resolution (H.J.Res. 59), which I supported, an anticipated 23.7 percent fee reduction was staved off for another three months and replaced with a 0.5 percent fee increase. This change is extremely important to Rhode Island's 189,000 Medicare beneficiaries, 25,000 TRICARE patients, and thousands of doctors, all of whom would have suffered immensely had the new fee schedule been adopted.

The federal debt has reached the highest proportion of GDP since World War II, and it is imperative that Congress take comprehensive actions to forestall a crisis. However, budget balancing measures must be prudent, and they must emphasize shared sacrifice. To that end, I recently signed a letter to House Speaker John Boehner and Minority Leader Nancy Pelosi expressing the urgency of a permanent fix being developed for the SGR. Because of the ongoing effects of the 2008 fiscal crisis, medical inflation has been held at lower levels the past five years than in the previous decade. This means that the time is perfect for rebasing reimbursement formulae, and committees in both the House and Senate have drafted bipartisan legislation that is well worth exploring.

With yet another SGR cliff facing Congress at the end of March, please know that I will continue to support legislation to permanently repeal the SGR and replace it with a fiscally responsible, fair, and predictable cost control measure. I will also work to ensure that appropriate inducements are developed to encourage best practices that are both medically effective and price conscious. A permanent fix is more fiscally responsible than yearly patches and provides doctors and patients with the certainty they need. Furthermore, by ending the annual SGR crisis, lawmakers will be able to better focus on policies that truly bend the health care cost curve.

Thank you again for contacting me on this timely issue. Please stay in touch on other areas of concern.


Jim Langevin

Member of Congress

Second District

Tuesday, March 25, 2014 | Report this
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