When Obamacare was first introduced to Congress, the Congressional Budget Office detailed multiple savings it would provide to many, and not just the 18-to-64 population who would finally get affordable insurance. The Affordable Care Act would even save Medicare – health coverage for seniors and the disabled – $463 billion over 10 years, too, CBO said in initial analysis.
As expected, Republicans challenged the claims, saying the estimates were unrealistic. And for once, they were right – but not for the reasons they claim.
Obamacare will not save $463 billion from Medicare, a more recent CBO report shows. Instead, it’s saving $1.07 trillion in the 10-year period of 2011-2020.
A recent Commonwealth Foundation report explains how those Medicare savings came about. You see, Obamacare also created new regulations for hospitals serving Medicare recipients, insisting that better care be provided. Says the Foundation:
“With its payment, quality, and delivery system reforms, the ACA is reshaping the Medicare program and addressing the need for improved performance throughout the entire health care system.”
Under new regulations, if a Medicare-covered patient needed to be quickly readmitted for the same condition, or for some other medical problem acquired during the first stay, a hospital could be penalized. And what was the result of this new rule? Medicare patients started getting better care from the get-go, and the readmission rate dropped.
This lower rate of hospitalization overall contributed to the reduction in overall Medicare spending, but so did other factors. Better first-visit service to Medicare patients in both hospitals and in doctors’ offices, combined with better availability of covered medications, contributed significantly, too. That’s how the 2014 data on expenses wound up far below CBO’s 2009 projections.
And that improvement in service to Medicare recipients, as well as the efficiency of that service, also improved their health. Since Obamacare’s Medicare rules were implemented, the number of seniors requiring hospitalization has steadily reduced, and even though the number of senior citizens in the U.S. has continued to grow. Better service, better health, lower hospitalization rates.
The Commonwealth Foundation’s analysis concludes:
“The Affordable Care Act holds significant promise to improve Medicare’s performance, strengthening it for a more viable and successful future.”
Medicare can still make further improvements, the Foundation says, but thankfully President Obama’s Affordable Care Act got the ball rolling.