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Administration Reports $8B in Medicare Savings

stethoscope and dollarAccording to a report the Obama administration is scheduled to release today, the new healthcare overhaul will begin producing immediate significant savings for Medicare, savings of about $8 billion by the end of next year and $575 billion over the rest of the decade.

The Obama administration report states the healthcare reform will strengthen Medicare, as opposed to Republicans’ concerns that spending cuts will undermine the system, and will lower seniors’ monthly premiums by nearly $200 annually over the next eight years.

“The passage of the Affordable Care Act marks a turning point in the unsustainable rate of cost growth in our healthcare system,” The Associated Press reported on an advanced copy of the report. The new law “reforms the Medicare program’s payment and delivery systems to incentivize high-quality care, appropriately price services, modernize the health care sector and fight waste, fraud and abuse.”

The report states the savings are to come from reductions in projected payment increases to hospitals and other providers, cuts to private insurance plans and efforts to improve quality and combat fraud.

The Department of Health and Human Services Secretary Kathleen Sebelius will hold a teleconference today to discuss the report.

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