Part D Helps Control Medicare Spending

Part D Helps Control Medicare Spending

05.06.13 | By

Last week the CMS Office of the Actuary, following legislatively proscribed duties, stated that actual and projected Medicare expenditures for 2011 through 2015 are low enough that they will not trigger the Independent Payment Advisory Board (IPAB) to recommend binding cuts to the Medicare program.

So what has helped keep down Medicare spending? Part D is a good place to look. According to releases from the Congressional Budget Office (CBO) over the last three years, Part D’s 10-year projected costs have come down over $100 billion each year. How many government programs do you know of that have come in well below initial cost projections and are helping seniors live healthier and longer lives? 

Also for the past three years, Part D beneficiary premiums have remained flat at about $30 a month (less than half the level initially predicted) and as the program has improved seniors’ access to medicines, real benefits – both health and financial – have been reaped. In fact, CBO has found that increased use of medicines helps to save money on other Medicare health care services.  Further, in 2011, Harvard researchers found that the implementation of Part D was connected with a $1,200 average reduction in nondrug medical spending for Medicare beneficiaries with limited prior drug coverage in each of the first two years of the program.

Check out our Part D pocket card to dig deeper on the program’s success story.

For those who aren’t familiar with IPAB, it was created in the Affordable Care Act as a body of unaccountable, unelected officials tasked with cutting Medicare spending. Despite its name, IPAB is not merely “advisory” — its recommendations go into effect without Congress’ approval even if IPAB overrides a law Congress has passed. Additionally, their recommendations are immune from any judicial or administrative review. IPAB could seriously jeopardize the health and well-being of millions of Medicare beneficiaries, which is why many organizations have spoken out against it along with members of Congress on both sides of the aisle. PhRMA, along with more than 500 other organizations, sent a letter to the Hill last week to voice concerns about the threat this board poses to Medicare and how it needs to be eliminated.

This latest news from CMS confirming historically low Medicare spending growth is just another reminder of how Part D is helping control costs and working for taxpayers and seniors.


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