Healthcare law's Medicare effects analyzed

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WASHINGTON, April 23 (UPI) -- Reports on Medicare say the U.S. social healthcare program will save $200 billion through 2016 but is wasting at least $8 billion on a test program.

One of the reports is from the Government Accountability Office, another is from the Centers for Medicare and Medicaid Services. Both were to be issued Monday.

The GAO report urges the Obama administration to cancel the experimental program that pays bonuses to health insurance companies covering Medicare beneficiaries, The New York Times reported.

Administration officials defended the project, saying they won't cancel it because it could improve the quality of care for older Americans.

In the 2-year-old healthcare law, Congress cut Medicare payments to managed-care plans and authorized bonus payments to insurers who provide high-quality care.

The GAO report said the Medicare Advantage project "dwarfs all other Medicare demonstrations" in its budgetary impact, but its design was so muddied that investigators could not determine whether the bonuses -- which could be used to offer extra benefits or lower premiums -- led to better care. Because of this, the report said, the program was unlikely to "produce meaningful results."

More than 12 million people are in Medicare Advantage plans, the Times said.

The project would cost $8.3 billion during the next decade, with about 80 percent of the cost front-loaded into the first three years, the report said.

The report by the Centers for Medicare and Medicaid Services said the healthcare law will save Medicare beneficiaries $208 billion through 2020 and save Medicare itself $200 billion through 2016, USA Today reported.

"We have achieved significant tangible savings that have been passed on to beneficiaries," Jonathan Blum, Center for Medicare director, said. "There's a tremendous opportunity for even greater savings."

The report said beneficiaries would save nearly $60 billion through 2016 because of lower premiums and out-of-pocket costs, while the program itself will save $200 billion through the same period.

The Congressional Budget Office in March estimated the law's insurance provisions would cost $50 billion less than first estimated in March of last year.