As the health reform law approaches its third birthday, Obama Administration officials are noting that one of its provisions has already helped seniors on Medicare save $6.1 billion on their prescription drug costs.

Obamacare ensures that more prescription drugs are covered under Medicare by closing the “donut hole” coverage gap. Even as the cost of prescription drugs has continued to rise, the health law gives discounts to Medicare beneficiaries so seniors continue to be able to afford the medication they need — one of its most popular provisions. On Thursday, HHS Secretary Kathleen Sebelius announced that more than 6.3 million Americans in the Medicare program have saved more than $6 billion on prescription drugs.

Since the Affordable Care Act first began phasing in reforms to Medicare’s drug coverage in 2010, the recorded savings for seniors have been steadily growing. And according to new estimates from the Congressional Budget Office (CBO), it won’t cost as much to close the donut hole’s coverage gap as initial estimates predicted. Ultimately, making drugs more affordable means that people will take them more regularly, ensuring seniors stay healthy and their medical costs are lower. In fact, the estimated 90 million Americans who don’t take their medications as directed represent the biggest root of wasteful health spending in the United States.

A full 90 percent of seniors with Medicare plans are satisfied with the prescription drug coverage they can access through the program, largely because of the savings they’re now experiencing. And those savings are likely to increase. This year, Obamacare increases Medicare’s prescription drug discounts to about 52 percent of the cost of most brand name drugs and 21 percent of the cost of covered generic drugs.

With Obamacare on the pathway towards full implementation, critics have attempted to point out every perceived flaw in the health reform law to marshal public opinion against it. Recently, reform opponents have focused their sights on the rule that prevents insurers from charging seniors more than three times the premiums they charge younger Americans, claiming it will cause young people’s health premiums to skyrocket.

That provision is actually meant to protect seniors, who are costlier to cover, from excessive price gouging. But health reform critics point out that insurance companies may try to exploit the rule to raise prices for younger Americans, making these young people’s health coverage unaffordable. According to a new Urban Institute analysis, however, these allegations are rooted more in wishful thinking than policy reality.

According to the Urban Institute’s findings, the 3:1 premium ratio will have little effect on younger Americans, as “they will be eligible for either Medicaid or tax credits through state health insurance exchanges.” The study goes on to conclude that through a combination of elevated Medicaid/CHIP benefits, Obamacare’s provision allowing adults up to 26 years of age to stay on their parents’ insurance, and the health reform law’s private insurance subsidies for Americans living up to 400 percent of the federal poverty level (FPL), younger Americans will not experience the sort of “sticker shock” that the doomsayers have been foretelling:

Most young adults and families will be largely shielded from the full effects of the narrower age rating bands thanks to the ACA’s increased eligibility for Medicaid and tax credits offered through state health insurance exchanges or through access to employer-sponsored insurance. In fact, this is largely true across age groups. Eighty-five percent of policies sold through nongroup exchanges will be to those with incomes at or below 400 percent of federal poverty level (FPL), making them eligible for tax credits.

Looking specifically at young adults age 21–27 purchasing nongroup insurance today, two-thirds will be protected by Medicaid/CHIP or exchange-based subsidies under reform; two-thirds of the remainder are under age 26 and in homes where their parents have employer-based coverage for which they are eligible under the ACA’s dependent coverage provisions.

The study’s findings emphasize both the importance of states taking part in Obamacare’s optional Medicaid expansion and the tendency for Obamacare critics to portray the law as some sort of fiscal bogeyman. Even the media has been complicit in smearing the law, implicitly suggesting that some insurers’ plans to institute double-digit premium hikes are in anticipation of Obamacare’s expansive coverage requirements — they are not. The new Urban Institute analysis is yet further proof that there is a considerable gap between the rhetoric and the reality when it comes to Obamacare.

Tying health insurance benefits directly to employment is forcing most Americans to work longer than they would have otherwise, a new study from the Employee Benefits Research Institute finds.

According to the study’s results, nearly 20 percent of retired Americans ended up working longer than they initially planned because they didn’t want to lose access to their employer-based health benefits. And a majority of the Americans who are currently in the workforce are also planning to delay their retirement in order to keep the insurance plans they have through their employer:

This builds upon previous research that shows the Great Recession has seriously impacted older Americans’ ability to retire. An estimated 62 percent of working Americans now report they’re planning to put off their retirement — up from 42 percent in 2010 — largely due to job losses and financial insecurity. These issues go hand-in-hand particularly because, as health care costs continue to rise, Americans are increasingly worried about being able to afford their insurance coverage.

And the United States’ primarily employer-based health insurance system doesn’t just impact Americans’ retirement decisions. It has also contributed to the “job lock” phenomenon, which prevents Americans from switching jobs or changing career paths because they’re too worried about losing access to their health benefits. “Job lock” ultimately creates an inefficient labor market, since workers may not take better jobs because they’re concerned about having a gap in health coverage.

Fortunately, Obamacare will take steps to address these dynamics by making health care more affordable to low- and middle-income Americans, as well as preventing insurers from denying coverage to people with pre-existing conditions. The health reform law “completely changes the playing field,” one of the study’s authors told Wonkblog’s Sarah Kliff. “If everything goes as planned, you’ve got guaranteed issue next year. You don’t need the employer to fill the gap.”

Despite significant medical advances and increasingly aggressive public health campaigns over the past several decades, the baby boomer generation is actually sicker than their parents’ generation, according to a new study from JAMA Internal Medicine. As the study’s authors point out, that’s partly because baby boomers — the 78 million Americans born between 1946 and 1964 — are experiencing the adverse effects of the nation’s obesity epidemic.

In one of the first studies to analyze health data across generations, researchers focused on the Americans who were between the ages of 46 to 64 years old in the late 2000s, as well as those who fell in that age range in the late 1980s. After comparing the two groups’ lifestyles, health statuses, and prevalence of chronic diseases, the study’s authors found that — even though younger generations of Americans are now living longer than their parents did — the nation’s rising obesity rates are causing their quality of life to decline:

Almost 40 percent of the boomers are obese, compared with 29 percent a generation ago. Fifty-two percent said they got no regular physical activity versus 17 percent of their parents, according to the study.

The results are a “wake-up call,” said Susan Reinhard, senior vice president of AARP’s Public Policy Institute in Washington.

“We have to cherish the longevity we’ve been given as a gift,” she said in a telephone interview. “We have to fight to live well not just live long. We’d like to believe that 60 is the new 40, but you can’t be that 40-something if you are just sitting on the couch.”

Fewer baby boomers are smoking, or developing tobacco-related diseases, than the older adults in their parents’ generation. But, partly because baby boomers are more overweight than their parents were at their age, they do have higher rates of hypertension and high cholesterol, become sicker earlier in their lives, and are more likely to need a cane or walker.

That shift underscores the fact that addressing the obesity epidemic now surpasses smoking cessation programs as the most pressing public health initiative in the United States today — particularly since, although Americans agree that obesity is a more serious issue than smoking, the majority of them still remain unaware of the public health risks associated with obesity.

Two separate reports by the Centers for Medicare and Medicaid Services (CMS) and Health Affairs builds upon earlier research to conclude that private insurance plans under the Medicare Advantage program drive up Medicare spending. Ultimately, those private plans raise health care costs by encouraging seniors to cherry pick their health plans respective to their health, Kaiser Health News reports.

Private insurance plans under Medicare Advantage are often able to attract healthier Medicare beneficiaries by offering cheap — but bare-bones — health plans. When those healthier seniors encounter a medical problem that’s too extensive for their private coverage, they switch over to the more generous traditional Medicare program in order to take advantage of its more expansive benefits. That in turn, raises spending in the traditional Medicare pool:

A study released Thursday, by Gerald Riley, a researcher at the Centers for Medicare & Medicaid Services (CMS), adds to those concerns. The study looked at more than 240,000 people who dropped out of Medicare Advantage plans in 2007, and compared them with beneficiaries who remained in traditional Medicare the entire time. In the six months after leaving the private plans, the former Medicare Advantage patients used an average of $1,021 in medical services each month, while the patients in the control group cost Medicare $710 a month, the study found.

Another study in the December issue of the journal Health Affairs found that people “disenrolling were much more likely than other beneficiaries to report health declines.” Those researchers, led by J. Michael McWilliams, a Harvard Medical School professor, surmised that beneficiaries who developed serious ailments might leave the plans to get unfettered access to physicians and treatments through traditional Medicare, but neither that study nor Riley’s determined what motivated the changes. [...]

McWilliams’ study, along with other analyses in the same issue of Health Affairs, found that generally, Medicare has succeeded in reducing cherry-picking by Medicare Advantage plans by changes in how the program worked, including restrictions in the time periods that people could switch from a private plan back to traditional Medicare. In 2006, Medicare tried to crack down on switches by limiting them to once a year rather than monthly.

While the Health Affairs study notes that there have been some protective measures instituted to prevent this cherry-picking, it still occurs in considerable volume. The findings underscore the reality that adverse selection remains a costly problem in private insurance markets.

While some critics might claim that reductions to Medicare Advantage payments under Obamacare could encourage seniors to continue disenrolling from private Medicare Advantage plans, that hasn’t borne out in reality. In fact, since Obamacare’s cuts to overpayments in Medicare Advantage began to be phased in, enrollment in the program is up while premiums are down.

Furthermore, increased enrollment into traditional Medicare might actually be a desirable outcome — the traditional Medicare program costs less per capita than the private Advantage program. And as these recent studies show, Advantage plans tend to fall short — and cost more — once beneficiaries get sick. As Center for Medicare Advocacy executive director Judith Stein put it, “Private Medicare Advantage plans work for people when they are relatively well, but fall short of traditional Medicare when they are sick or disabled.”

According to a new study released by the Journal of General Internal Medicine, out-of-pocket medical spending in the last five years of life left one in four American seniors bankrupt.

The study found that average “out-of-pocket expenditures in the 5 years prior to death were $38,688 for individuals, and $51,030 for couples in which one spouse dies.” That average was skewed upwards by staggeringly high out-of-pocket medical spending by seniors who had particularly expensive medical needs. All told, a full “25 percent of subjects’ expenditures exceeded baseline total household assets, and 43 percent of subjects’ spending surpassed their non-housing assets,” according to the report.

The study’s findings underscore the fact that, despite Medicare coverage — which is more efficient and cost-effective compared to private insurance — health care consumption by seniors suffering from costly diseases such as cancer and Alzheimer’s can often drive up prices to an unsustainable rate.

That represents the simple reality of the costs of treating diseases for which there are still no cures. Seventy percent of national health care expenses derive from just 10 percent of the population, usually by terminally ill Americans.

But when conservative politicians use that figure to justify radical cuts to social safety net programs, their logic simply doesn’t add up. Shifting ailing patients away from publicly financed insurance programs and into the private market only drives up health care costs and uncompensated care rates by forcing people to pursue treatment that they cannot afford — and those policies would simply force even more seniors to exceed their non-housing assets to pay for their medical costs. The solution to this issue lies in finding more cost-effective treatments for costly diseases, not leaving seniors to their own devices to figure out how to pay for their health care.

The Center for American Progress (CAP) today released a new study highlighting the devastating effect that raising the Medicare eligibility age would have on America’s seniors.

CAP’s study finds that if lawmakers were to raise the eligibility age to 67, as many as 5.4 million 65- and 66-year-olds would have to search for alternative coverage sources — either by postponing retirement, enrolling in an individual plan on one of Obamacare’s statewide insurance exchanges, or qualifying for Medicaid. This dynamic alone will drive up all Americans’ costs by making existing insurance pools older, sicker, and costlier to treat.

The report further estimates that while the federal government would save a net $5.7 billion, raising the eligibility age would end up costing states, employers, and Americans an added $11.4 billion in health care spending. Worse still, seniors living in GOP-run states that have very high concentrations of poor, elderly Americans yet have refused to take part in Obamacare’s Medicaid expansion would be hit hardest by the eligibility hike, and as many as 435,000 seniors could end up uninsured by 2021 if lawmakers end up following through on the proposal:

Unfortunately, GOP governors have been digging in their heels against health care reform by refusing to take part in Obamacare’s Medicaid expansion. Just last week, while announcing that South Dakota would not be expanding its Medicaid program, Gov. Dennis Daugaard (R) dismissed the plight of poor, uninsured Americans off-hand, saying, “I want to stress that: these are able-bodied adults. They’re not disabled; we already cover the disabled. They’re not children; we already cover children. These are adults — all of them.” While it is certainly true that these poor Americans — who must make ends meet on less than $12,000 per year — are “adults,” Daugaard’s assurance that they are able-bodied is dubious.

Raising the Medicare eligibility age from 65 to 67 is fundamentally un-serious entitlement “reform.” It’s the kind of proposal that sounds logical — after all, it’s true that Americans are living longer on average — and makes for a quick and easy political pitch. But a brief dive into its mechanics and consequences shows it for what it really is: a shoddy political deal that ends up costing double what it saves by shifting the cost of health care from the federal government onto states, employers, and Americans’ premiums — all while doing absolutely nothing to address the actual roots of America’s skyrocketing health spending.

Despite the fact that the cost of brand name drugs has skyrocketed over the past few years, one Obamacare provision is helping seniors on Medicare save billions on their prescription drug costs.

Over the summer, data from the Centers for Medicare And Medicaid Services (CMS) showed that the Affordable Care Act had already saved 5.2 million seniors and people with disabilities nearly $4 billion on their prescriptions by closing the “donut hole” coverage gap and ensuring that more prescription drugs are covered under Medicare. And today, the Obama Administration announced that their updated data shows seniors’ savings have now surpassed $5 billion, as nearly 2.8 million Americans have saved an average of $677 on their prescription medications so far this year.

And recent figures from the Congressional Budget Office (CBO) suggest that the cost of closing the donut hole and extending coverage for additional prescription drugs won’t be as high as initial estimates predicted. Making drugs more affordable means that more people will take their medication, ultimately saving the government money in the long run by stabilizing their medical conditions and reducing medical costs. Taking that into account, the CBO’s report estimates that the net cost of closing the donut hole will actually be $51 billion — significantly less than the previous $86 billion estimate.

Largely thanks to the increasing savings that Obamacare ensures, a full 90 percent of seniors with Medicare plans report that they are satisfied with their prescription drug coverage under the program. And the U.S. Department of Health and Human Services reports that those savings are likely to continue through the next decade, as the Affordable Care Act will help the average American with a traditional Medicare plan save $5,000 between 2010 and 2022.

Austin Frakt over at The Incidental Economist points out that the cost of brand name prescription drugs has skyrocketed relative to the price of their generic counterparts:

While this doesn’t pose a significant problem for seniors on Medicare — surveys have shown that close to 90 percent of seniors are satisfied with their Medicare plans, largely thanks to the fact that Obamacare helps save seniors money on their prescription drugs by closing the program’s “donut hole” coverage gap — it is a concerning trend for those with private insurance plans whose benefits might not be as generous.

The rise in brand name prescription drug costs mirrors the general trend for health care costs, which have been skyrocketing over the last three decades. As private insurers hike their premium rates in response to the price of care, Americans with extensive drug needs may see the cost of their treatments slip into unaffordable territory.

Furthermore, the upward trajectory in brand name drug prices poses a significant hurdle for Americans suffering from rarer disorders. These consumers require a more complex cocktail of drugs to meet their medical needs — needs that likely cannot be met by existing generic drugs.

According to a new report by the Government Accountability Office (GAO), doctors who “self-referred” Medicare patients for advanced imaging tests — a practice where doctors refer their patients to image testing facilities in which they have a direct or indirect financial stake — cost the Medicare program $100 million in 2010 alone.

The GAO found that over the course of six years, doctors’ self-referrals for MRIs grew by 80 percent even though referrals to other doctors and practices grew by a mere 12 percent, suggesting that the imaging tests were inspired by personal gain rather than patients’ needs. Doctors’ increasing use of the controversial practice raises concerns that they are ordering unnecessary procedures in order to reap added Medicare reimbursements at the expense of patient safety and the fiscal security of the Medicare entitlement.

As The Hill reports, lawmakers from both sides of the aisle have reacted strongly to the findings, which appear to show doctors systematically gaming the system:

“The results of this report are eye opening,” Senate Finance Committee Chairman Max Baucus (D-Mont.) said. “Self-referrals offer an incentive for providers to order more tests than they would otherwise. It’s clear they are driving up costs. Providers’ bottom lines shouldn’t be getting in the way of their patients’ care and best interests.”

In 2010, doctors who self-referred made 400,000 more referrals than they would have if they didn’t have a financial interest in ordering more tests, GAO said. The added referrals cost Medicare roughly $109 million.

“Medicare payment policy shouldn’t incentivize unnecessary tests that drive up costs and even jeopardize the well-being of patients,” Sen. Charles Grassley (R-Iowa) said. “The challenge is to develop a payment system that safeguards beneficiary access to services while preventing self-referrals by physicians who abuse the system.” [...]

Doctors aren’t just conducting more tests themselves — they’re also sending more patients in for tests, according to GAO. Once doctors bought the necessary equipment or joined a practice that self-referred, they started writing about 67 percent more referrals for MRIs and CT scans, according to Wednesday’s report.

The massive spike in image testing referrals by doctors who buy new imaging equipment or join a self-referring practice further reinforces the charge that these tests are being ordered for personal profit. Even worse, unnecessary advanced imaging tests such as MRIs and CT scans don’t just drive up Medicare costs — they also expose elderly patients to potentially harmful levels of radiation without serving them any discernible medical benefit.

Billing fraud schemes in Medicare are woefully common, and have been the target of aggressive Obama Administration anti-fraud efforts. Just last month, the U.S. arrested 91 health care professionals across seven different cities in a $430 million Medicare fraud bust. Unfortunately, fraudulent tactics such as redundant medical testing are difficult to track, as they are largely left to doctors’ personal discretion. But they come at a high price for the Medicare safety-net and the well-being of the seniors it strives to protect.