The U.S. government announced that Medicare recipients saved $1.5 billion on prescription drug costs during the past year and a half, The Daily Beast reports. This comes to an average of $569 for each person in the program.
Medicare achieved these savings by closing the so-called “doughnut hole” in its prescription drug benefits. While the program covered most of the costs for drugs priced under $2,800 per year or over $4,550 per year, participants were stuck paying full price for drugs whose annual cost lay in between those two numbers.
The Affordable Care Act—a.k.a. health care reform, pushed through by the Obama administration against Republican opposition—closed the doughnut hole by requiring drug companies to sell medications inside that price range to Medicare recipients at half price. The Affordable Care Act also allowed for each Medicare recipient to get a free annual checkup, a benefit that 24 million people have taken advantage of.
But this is a drop in the bucket compared with how much the program could save by cutting wasteful spending, according to former Medicare administrator Donald Berwick. In a New York Times interview, Berwick claimed that between 20 percent to 30 percent of the last year and half’s Medicare spending was wasted, and that cutting waste could save between $150 billion and $250 billion per year.
To read the Daily Beast article, click here.