Medicare beneficiaries reach $5 billion in drug savings

Kelly Kennedy, USA Today

December 3. 2012 - Since passage of the health care overhaul two years ago, 5.8 million Medicare patients have saved $5 billion from prescription drug discounts, and the government can now predict lower health care costs based on increased use of these cheaper drugs.

The savings are a continuation of the 2010 health care law's attempt to close the "doughnut hole" — or the prescription drug coverage expenses that kick in once Medicare coverage runs out. The Department of Health and Human Services plans to announce those savings Monday.

"The health care law is saving money for people with Medicare," said HHS Secretary Kathleen Sebelius, before adding that open enrolling begins next week.

In 2012, Medicare coverage ends when total prescription costs top $2,930. Drugmakers participating in Medicare agreed to give the government a 50% discount on premium drugs and 14% on generic drugs as part of the health care law, and to extend those discounts to seniors who have exhausted their coverage and are forced to pay for the drugs themselves.

Because of these discounts, in the first 10 months of 2012, Medicare beneficiaries saved $1.86 billion on prescription drugs, compared with $1.51 billion in the first 10 months of 2011, according to HHS. The last months of the year tend to have higher savings as people run out of coverage and enter the doughnut hole.

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