Vermonters with prescription drug coverage through Medicare have saved a collective $21.8 million since the passage of the Affordable Care Act in 2010, according to a federal report.
The report was released following the Obama administration’s announcement that the Medicare trust fund is on more stable footing. Without changes to current law, the program’s trust will run out of money in 2030, four years later than projected last year.
The savings on prescription drugs, which total $11.5 billion nationally, are the result of a provision in the Affordable Care Act that gradually closes the gap between when beneficiaries pay the full cost for drugs and when their coverage takes effect.
The gap, often referred to as the “donut hole,” is expected to close entirely by 2020.
The standard Medicare Part B premium is likely to remain at $104.90 per month for the third year in a row as a result of the program’s improving finances, according to the Medicare trustees, a governing board with four administration officials and two public members.
Medicare benefited from slowed growth in health spending nationally and reduced Medicare payments to providers under the Affordable Care Act, which also incentivizes more efficient care.
The Medicare trust’s solvency is now 13 years longer than what was projected before the Affordable Care Act, Leahy said, even while seniors have save billion on prescription drugs since the law took effect.
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But an aging population will put pressure on the program over the next decade.
Average spending per beneficiary will grow 40 percent in 10 years from $12,210 in 2013 to $17,364 in 2023. Costs for prescription drugs and doctors services will grow even faster at 69 percent and 49 percent respectively, according to the report.
If there are not legislative changes to Medicare, tax revenues that support the program will cover 85 percent of its costs once the trust is depleted in 2030, according to a summary of the reports projections.
Vermont had 177,000 Medicare beneficiaries in 2012, according to figures from the Kaiser Family Foundation. That’s more than a quarter of the state’s population.
Social Security, Disability Trust show weaker projections
There was no change in the estimate for when the Social Security trust fund will run out; projections still show that will be in 2033.
However, the portion of Social Security that pays disability benefits, known as the Disability Insurance trust, is projected to run out in 2016 without a legislative fix.
“Lawmakers need to act soon to avoid automatic reductions in payments to (disability insurance) beneficiaries in late 2016,” according to the trustees summary of their report.
For Social Security more broadly, it’s estimated that revenues supporting the program would cover 75 percent of its costs after its trust is depleted in 2033.
Medicare and Social Security combined are close to 36 percent of federal spending, according to figures from the administration’s Office of Budget and Management.
Sen. Patrick Leahy, D-Vt., said in a statement that the nation’s aging population will continue to strain programs like Medicare and Social Security, “the short-term picture for Medicare has notably improved because of the Affordable Care Act.”
The Medicare trust’s solvency is now 13 years longer than what was projected before the Affordable Care Act, Leahy said, even while seniors have save billion on prescription drugs since the law took effect.