CMS projects $200 billion in Medicare savings

The CMS expects the 2010 healthcare-reform law to yield more than $200 billion in savings through 2016 because of measures that include ending excessive payments to private insurers that offer Medicare Advantage plans and implementing new anti-fraud policies.

The estimate came from the CMS' Office of the Actuary, which also said seniors and others in the traditional Medicare program should see about $59.4 billion in savings during that same period through lower cost-sharing and premiums.

According to the report, "The Affordable Care Act: Lowering Medicare Costs by Improving Care" (PDF), lowering excessive Medicare payments to private insurers in Medicare Advantage should save about $68 billion; changing provider payments to improve productivity should yield about $85 billion; and anti-fraud efforts related to the reform law should save about $7.8 billion over the next four years.

“The Affordable Care Act is the key to lowering healthcare costs in a way that improves care for beneficiaries, instead of cutting services,” CMS acting Administrator Marilyn Tavenner said in a news release. “In the short term, both taxpayers and beneficiaries will save billions thanks to the healthcare law. Over the long run, the Affordable Care Act will allow us to invest in new models of providing care that will save money and deliver higher-quality care.”