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Health law delivers $2.1 billion in savings on drugs for seniors

February 02, 2012|By Noam N. Levey
  • Beth Stuckmeyer checks out customers at a pharmacy in south St. Louis County, Mo. In 2011, President Obama's healthcare law provided Medicare beneficiaries a 50% discount on covered brand-name drugs and a 7% discount on generics when they hit the so-called doughnut hole.
Beth Stuckmeyer checks out customers at a pharmacy in south St. Louis County,… (Christian Gooden / St. Louis…)

Reporting from Washington —

In the first full year of the new healthcare 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 the president signed in March 2010.

The law's biggest changes, including the guarantee that all Americans can get health coverage even if they have a preexisting condition, do not go into effect until 2014.

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

The Medicare prescription drug provision is designed to gradually 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% discount on covered brand-name drugs and a 7% 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.

Those discounts are slated to rise to 75% 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.

noam.levey@latimes.com

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