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Press release: THE AFFORDABLE CARE ACT - A STRONGER MEDICARE PROGRAM IN 2012

Date
2013-02-07
Title
THE AFFORDABLE CARE ACT - A STRONGER MEDICARE PROGRAM IN 2012
For Immediate Release
Thursday, February 07, 2013
Contact
press@cms.hhs.gov
THE AFFORDABLE CARE ACT - A STRONGER MEDICARE PROGRAM IN 2012
MORE THAN 6.1 MILLION AMERICANS WITH MEDICARE HAVE SAVED OVER $5.7 BILLION ON PRESCRIPTION DRUGS.

This second annual report details how millions of seniors and people with disabilities with Medicare continued to experience lower costs on prescription drugs and improved benefits in 2012 because of the Affordable Care Act. 

 

Since the law’s enactment, 6.1 million Americans with Medicare who reached the Part D coverage gap also known as the “donut hole,” have saved over $5.7 billion on prescription drugs.  Drug savings of $2.5 billion in 2012 are higher than the $2.3 billion in savings for 2011.  In 2012, people with Medicare in the “donut hole” received a 50 percent discount on covered brand name drugs and 14 percent discount on generic drugs.  As a result of the Affordable Care Act, coverage for both brand name and generic drugs will continue to increase over time until the coverage gap is closed. 

 

The Affordable Care Act also removed barriers for people with Medicare to get preventive services, many of which previously required cost-sharing for patients.   In 2012, many recommended preventive services were offered to people with Medicare, with no deductibles or co-pays, meaning that cost is no longer a barrier for seniors and people with disabilities who want to stay healthy by detecting and treating health problems early.  Use of preventive services has expanded among people with Medicare.  In 2012 alone, an estimated 34.1 million people with Medicare benefited from Medicare’s coverage of preventive services with no cost-sharing.

 

Under the Affordable Care Act, the Medicare program also performed well in several other areas in 2012: 

•             Compared to 2011, people with Medicare continued to pay moderate premiums for Medicare Part B benefits, which cover outpatient care, doctors' services, lab tests, durable medical supplies, and other services. 

•             Those who enrolled in Medicare Advantage and prescription drug plans paid average premiums lower than what they paid in 2010, and they had access to a wide range of plan choices. 

•             New techniques were implemented to detect, prevent and fight health care fraud.

NEW DATA SHOWS THAT SINCE AFFORDABLE CARE ACT ENACTMENT, OVER 6.1 MILLION MEDICARE BENEFICIARES HAVE SAVED OVER $5.7 BILLON ON PRESCRIPTION DRUGS

The Affordable Care Act makes prescription drug coverage (Part D) for people with Medicare more affordable. It does this by gradually closing the gap in drug coverage known as the "donut hole." For many people enrolled in Medicare Part D, the “donut hole” occurs after they and their plan spend a certain amount of money for covered drugs, but before they hit catastrophic coverage in which they are only responsible for a small percent of their drug costs. Prior to the Affordable Care Act, an individual in the “donut hole” had to pay the full costs of prescription drugs.

 

The Affordable Care Act is closing the “donut hole” over time, by first providing a one-time $250 check for those that reached the “donut hole” in 2010, then by providing discounts on brand-name drugs for those in the “donut hole” beginning in 2011, and additional savings each year until the coverage gap is closed in 2020.  People with Medicare in the “donut hole” receive the discounts when they purchase prescription drugs at a pharmacy or order them through the mail, until they reach the catastrophic coverage phase.  Since its enactment in 2010, the law has saved 6.1 million seniors and people with disabilities more than $5.7 billion on brand-name prescription drugs. 

 

The HHS Assistant Secretary for Planning and Evaluation projected average savings per Medicare beneficiary to be approximately $5,000 from enactment through 2022, while those with high prescription drug spending are projected to save much more – over $18,000. These projections, in addition to prescription drug plan data on 2012 spending, demonstrate that those with high drug costs are seeing considerable savings thanks to the Affordable Care Act.

 

In 2012, more than 3.5 million seniors and people with disabilities who reached the Medicare Part D coverage gap received discounts on brand- name prescription drugs.  These individuals with Medicare received more than $2.5 billion in discounts, or an average of $706 per beneficiary.  Savings for covered generic drugs while in the “donut hole” in 2012 totaled $105 million for 2.8 million beneficiaries.  

 

In 2012, coverage gap discounts allowed seniors and people with disabilities to save money on a wide variety of drugs, including:

•             Blood Sugar Lowering Drugs:  $435,794,413 

•             Asthma and Other Lung Related (non-cancer) Disease Drugs: $297,234,514

•             Triglyceride and Cholesterol Lowering Drugs: $240,495,663  

•             Drugs Used to Lower Blood Pressure: $138,497,053

•             Anti-dementia Drugs:  $120,878,582

•             Drugs Used to Treat Ulcers:  $101,888,578 

•             Cancer Drugs:  $97,263,505

•             Anti-depression Drugs:  $85,047,907 

•             Autoimmune Disease Anti-inflammatory Drugs: $56,715,485

•             Psychiatric Drugs: $56,295,844

•             All Other Drug Therapeutic Uses: $872,688,178

 

Most of the savings are on drugs for chronic conditions, suggesting that people with Medicare who must continuously take medications are benefitting most from the help provided by the Affordable Care Act. Drugs managing chronic conditions such as high blood sugar, high blood pressure and high cholesterol accounted for almost 33 percent of savings and may have helped patients avoid hospitalization. About 11 percent of the savings were for drugs treating mental illness, which were designed to help people with Medicare maintain healthy and active lives.

 

In 2013, people with Medicare in the coverage gap are saving 52.5 percent on brand‐names drugs and 21 percent on generics. These savings will increase each year until the coverage gap is closed in 2020.  

The schedule below illustrates how the coverage gap will be closed, with information on drug savings for those in the coverage gap.

 

 

 

 

Percentage Medicare Part D Enrollees will Save

Brand‐names Drugs

Generic Drugs

2014

52.5 percent

28 percent

2015

55 percent

35 percent

2016

55 percent

42 percent

2017

60 percent

49 percent

2018

65 percent

56 percent

2019

70 percent

63 percent

2020

75 percent

75 percent

 

 

STATE‐BY‐STATE SAVINGS FROM DISCOUNTS WHILE IN “DONUT HOLE”

 

 

State or Territory

Overall

2011

2012

 

Total Savings

Total Gap Discount Amount

Total Gap Discount Amount

Total Number of Beneficiaries

Average Discount per Beneficiary

 

Nation

$5,760,182,946

$2,311,220,975

$2,502,799,722

3,547,246

$706

 

Alabama

$77,248,493

$31,807,551

$31,020,512

48,264

$643

 

Alaska

$4,059,730

$1,685,133

$ 1,794,910

2,278

$788

 

Arizona

$102,237,394

$39,489,954

$44,963,599

65,267

$689

 

Arkansas

$50,287,595

$21,076,421

$20,151,382

32,420

$622

 

California

$453,865,739

$182,381,722

$182,776,196

299,896

$609

 

Colorado

$59,645,855

$24,459,701

$24,339,969

37,733

$645

 

Connecticut

$78,759,336

$26,238,636

$41,932,782

47,677

$880

 

Delaware

$23,199,385

$10,010,926

$9,945,279

12,134

$820

 

District Of Columbia

$3,877,623

$1,638,772

$1,554,101

2,319

$670

 

Florida

$378,403,475

$152,489,277

$160,882,589

237,344

$678

 

Georgia

$161,956,926

$62,484,234

$72,511,462

99,057

$732

 

Guam

$396,918

$193,400

$151,268

242

$625

 

Hawaii

$20,299,348

$7,266,854

$6,931,057

18,474

$375

 

Idaho

$22,498,985

$9,225,783

$9,076,120

14,584

$622

 

Illinois

$235,327,301

$101,529,128

$95,923,083

133,889

$716

 

Indiana

$144,142,629

$61,466,902

$60,251,646

85,784

$ 702

 

Iowa

$64,928,785

$27,600,109

$25,848,452

39,260

$ 658

 

Kansas

$59,331,172

$24,968,485

$24,040,920

36,383

$661

 

Kentucky

$111,548,906

$43,289,351

$50,916,143

72,391

$703

 

Louisiana

$88,538,619

$32,316,242

$42,280,622

60,016

$ 704

 

Maine

$16,777,237

$6,775,456

$6,738,800

11,413

$590

 

Maryland

$84,167,415

$32,760,447

$37,572,535

48,949

$768

 

Massachusetts

$96,478,961

$39,363,887

$39,401,173

59,062

$667

 

Michigan

$153,484,151

$51,330,931

$79,375,077

106,707

$744

 

Minnesota

$88,256,958

$36,587,311

$34,886,726

54,175

$644

 

Mississippi

$50,711,580

$21,440,317

$20,640,606

32,649

$632

 

Missouri

$119,340,191

$49,676,876

$48,850,222

75,201

$650

 

Montana

$16,312,364

$6,873,650

$6,554,211

9,992

$656

 

Nebraska

$37,869,126

$16,129,674

$15,237,679

23,049

$661

 

Nevada

$32,957,815

$13,138,217

$13,511,767

22,122

$611

 

New Hampshire

$20,592,230

$8,764,923

$8,261,770

12,400

$666

 

New Jersey

$298,658,849

$100,215,225

$165,432,302

169,373

$977

 

New Mexico

$28,824,261

$9,785,022

$14,035,655

18,867

$744

 

New York

$407,663,891

$174,321,559

$170,460,384

226,569

$752

 

North Carolina

$168,022,642

$69,004,496

$70,173,968

106,207

$661

 

North Dakota

$14,605,374

$6,324,593

$5,576,642

9,069

$615

 

Northern Marianas

$20,778

$7,400

$11,628

14

$831

 

Ohio

$278,731,176

$103,052,894

$138,548,148

178,931

$ 774

 

Oklahoma

$73,501,520

$30,231,254

$29,036,648

50,306

$577

 

Oregon

$62,104,279

$25,284,269

$24,228,337

41,787

$580

 

Pennsylvania

$392,036,508

$162,464,895

$167,692,364

222,703

$753

 

Puerto Rico

$138,997,203

$60,344,237

$56,178,122

85,781

$655

 

Rhode Island

$20,564,235

$8,599,052

$8,006,683

13,834

$579

 

South Carolina

$84,380,387

$34,834,645

$35,663,279

52,686

$677

 

South Dakota

$16,514,484

$7,131,754

$6,415,501

9,997

$642

 

Tennessee

$124,281,720

$52,445,394

$49,981,151

80,991

$617

 

Texas

$338,487,681

$142,557,143

$140,233,380

206,304

$680

 

Utah

$33,522,667

$13,125,156

$14,767,407

20,994

$703

 

Vermont

$11,778,974

$5,103,378

$4,890,789

6,390

$765

 

Virgin Islands

$1,111,261

$465,126

$447,678

717

$624

 

Virginia

$131,746,125

$52,691,826

$57,675,792

80,522

$716

 

Washington

$94,903,807

$38,175,084

$40,929,219

56,996

$718

 

West Virginia

$69,376,641

$25,993,424

$33,655,461

37,752

$891

 

Wisconsin

$103,180,245

$40,549,410

$46,472,971

63,553

$731

 

Wyoming

$8,938,778

$3,745,183

$3,710,847

5,421

$685

 

*Totals may not sum due to missing codes for some data and rounding

 

*The "Overall Total Savings" discount column also includes amounts for those beneficiaries that received a $250 check in 2010

 

*2010 data is as of June 2012; 2011 and 2012 data is as of December 2012

 

*Each "Total " column above is based upon independent analyses and cannot be intermingled

 

 

ESTIMATED 34.1 MILLION WITH MEDICARE USED ONE OR MORE FREE PREVENTIVE SERVICE IN 2012

 

By making certain preventive services available with no cost-sharing obligations, the Affordable Care Act is helping Americans take charge of their own health.  Americans can now better afford to work with health care professionals to prevent disease, detect problems early when treatment works best, and monitor health conditions. 

 

In the Medicare program, the Affordable Care Act eliminated coinsurance and the Part B deductible for recommended preventive services, including many cancer screenings and other important benefits.  For example, before the law’s passage, a person with Medicare could pay as much as $160 in cost-sharing for some colorectal cancer screenings.  In addition to covering these preventive services with no out-of-pocket costs for people with Medicare, the law also added another important new preventive service — an Annual Wellness Visit with a health professional.  This Visit complements the "Welcome to Medicare" Visit which allows people joining Medicare to evaluate their current health conditions, prescriptions, medical and family history and risk factors, and make a plan for appropriate preventive care with their primary care professional.

 

In addition to the Annual Wellness Visit, Medicare has added coverage of new preventive services through its National Coverage Determination process which are exempt from both the Part B deductible and coinsurance/copayment since enactment of the Affordable Care Act including, for example, annual depression screenings.

 

Traditional Medicare

 

Since becoming available without cost-sharing in 2011, over 30.5 million people with traditional Medicare (79.5 percent) have taken advantage of one or more free preventive services.  That includes 2,951,704 African Americans (73.3 percent), 638,512 Hispanic persons (73.9 percent), 135,803 American Indians (69.7 percent), and 583,540 Asian‐Americans (80.9 percent).  Last year alone, nearly 26.1 million seniors and people with disabilities with traditional Medicare (about 73.5 percent), used at least one free preventive service. 

The tables below present the cumulative number of unique enrollees in traditional (Part B) Medicare who used free preventive services in 2011 and 2012.

 

Since enactment of the ACA, Services Added and Exempt from both the Part B deductible and coinsurance/copayment:

 

 

Part B Enrollees Using Services

Annual Wellness Visit

4,435,636

Alcohol Misuse Screening and Behavioral Counseling

60,412

Annual Depression Screening

112,398

Intensive Behavioral Therapy for Cardiovascular Disease Risk Reduction

43,704

Obesity Screening and Intensive Behavioral Therapy

34,525

Sexually Transmitted Infections (STI) Screening and Counseling

2,199,348

Tobacco Cessation Counseling                                            

123,603

 

 

 

Prior to the ACA, Services Subject to Both the Part B deductible and coinsurance/copayment:

 

 

Part B Enrollees Using Services

Bone Mass Measurement                                        

5,148,032

Hepatitis B (HBV) Vaccination                                               

278,528

Medical Nutrition Therapy                                           

350,407

 

 

 

Prior to the ACA, Services Exempt from the Part B deductible, but Subject to coinsurance/copayment:

 

 

Part B Enrollees Using Services

Abdominal Aortic Aneurysm -Ultrasound Screening

141,689

Colorectal Cancer  Screening - most procedures

2,199,238

Pap Tests (that require physician interpretation)

2,115,287

Pelvic Examination

2,443,334

Screening Mammography

8,442,044

 

 

 

Prior to the ACA, Services Exempt from both the Part B deductible and coinsurance/copayment:

 

 

Part B Enrollees Using Services

Cardiovascular Disease Screening Blood Tests

25,569,864

Colorectal Cancer Screening - fecal occult blood tests  

1,798,495

Diabetes Screening Test

3,776,570

Human Immunodeficiency Virus (HIV) Screening

66,456

Pap Tests (that do not require physician interpretation) 

2,627,911

Pneumococcal Vaccination

3,882,901

Prostate-specific Antigen (PSA) Test

4,062,129

Seasonal Influenza Virus Vaccination

19,503,564

 

 

Medicare Advantage (Part C) Program

In 2012, all Medicare contracting health insurance plans (or “Medicare Advantage” plans) that serve people with Medicare offered recommended preventive services without cost-sharing.   In 2012, about 10.9 million Americans were enrolled in a non-employer Medicare Advantage plan that waived cost‐sharing for recommended preventive services.   Assuming that in 2012, people in these plans utilized preventive services at the same rate as those in traditional Medicare, an estimated 8 million people in a non-employer Medicare Advantage plans benefited from Medicare’s coverage of preventive services with no cost-sharing.

 


 

 

STATE‐BY‐STATE UTILIZATION – FREE PREVENTIVE SERVICES

 

 

 

Original Medicare (Part B): Utilization of Benefit in 2012

Medicare Advantage (Non‐Employer): enrollees with access to free preventive care

 

Total Enrollees

Enrollees Utilizing Free Preventive Services

Enrollees Utilizing Annual Wellness Visit

Nation*

35,502,733

26,090,166

3,157,481

10,897,021

Alabama

700,019

515,494

30,518

  187,801

Alaska

70,431

41,371

4,093

N/A

Arizona

621,229

434,397

75,023

  329,733

Arkansas

468,023

326,349

25,494

  89,304

California

3,110,502

2,153,101

260,268

  1,392,766

Colorado

434,943

296,093

50,023

  165,071

Connecticut

443,892

343,059

75,820

  117,805

Delaware

152,248

119,106

10,643

  6,343

District of Columbia

67,165

45,333

4,663

  2,901

Florida

2,400,748

1,823,396

259,995

  1,173,159

Georgia

1,021,594

742,634

101,350

  221,206

Hawaii

111,635

75,957

2,811

  71,577

Idaho

172,164

113,850

16,227

  71,972

Illinois

1,695,807

1,271,704

122,526

  163,162

Indiana

852,808

626,050

62,925

  180,745

Iowa

460,400

351,880

32,519

  62,738

Kansas

393,927

284,396

27,437

  48,155

Kentucky

662,442

485,843

36,599

  97,688

Louisiana

536,779

381,407

19,625

  171,645

Maine

233,522

168,602

32,083

  35,085

Maryland

725,057

543,632

58,473

  37,331

Massachusetts

875,315

686,735

166,154

  167,019

Michigan

1,309,045

989,673

157,894

  238,140

Minnesota

424,612

300,109

30,938

  166,903

Mississippi

469,241

327,238

24,143

  57,704

Missouri

798,889

584,857

58,762

  223,433

Montana

152,036

100,435

16,595

  26,923

Nebraska

250,225

177,050

14,104

  31,409

Nevada

256,144

166,815

17,960

  115,845

New Hampshire

219,562

164,065

27,366

  7,392

New Jersey

1,157,252

882,282

116,412

  173,961

New Mexico

236,776

151,903

15,704

  75,992

New York

2,012,376

1,495,198

202,542

  824,397

North Carolina

1,303,802

1,003,923

139,278

  277,558

North Dakota

98,557

71,441

7,195

  4,235

Ohio

1,251,167

903,150

79,387

  429,802

Oklahoma

526,893

366,752

19,691

  89,710

Oregon

380,291

254,595

28,542

  228,406

Pennsylvania

1,396,432

1,034,635

88,807

  722,127

Puerto Rico

108,232

58,993

271

  434,420

Rhode Island

113,961

88,352

23,393

  57,830

South Carolina

695,318

523,349

60,680

  143,664

South Dakota

124,804

88,221

8,376

  9,990

Tennessee

822,788

608,253

71,078

  297,753

Texas

2,476,060

1,795,711

218,009

  649,751

Utah

188,285

127,246

16,158

  96,343

Vermont

110,317

80,464

13,112

  6,391

Virginia

1,004,733

757,195

79,306

  152,647

Washington

732,786

500,444

68,322

  262,485

West Virginia

305,115

214,086

9,934

  36,945

Wisconsin

646,046

481,835

61,903

  258,349

Wyoming

81,263

48,752

5,052

  3,310

* National figures include Guam, Northern Marianas, and Virgin Islands.


 

 

PREMIUMS REMAIN STEADY FOR PEOPLE WITH MEDICARE

 

People with Medicare can be assured they are part of a program that strives to deliver better benefits while curbing costs.  Most seniors and people with disabilities will pay the standard Medicare Part B premium of $104.90 per month in 2013, approximately $4 lower than the amount projected in early 2012.  Part B benefits include certain doctors’ services, outpatient care, medical supplies, and preventive services.  Premiums for Part B have gone up slowly over the past five years – an average of less than 2 percent per year.

 

For the few people with Medicare who are affected, the 2013 Part A premium is $441, down from $451 in 2012.  Approximately 1.3 percent of people with Medicare pay a premium for Medicare Part A services.  Beneficiaries who do not qualify for premium-free Part A services include those who have not paid Medicare payroll taxes for 40 quarters of employment or who are not are married to a person who qualifies for premium-free Part A services.  Individuals who have worked between 30 and 39 quarters of coverage are eligible to pay a reduced premium.  The Part A benefit covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.

 

Using authority granted by the Affordable Care Act, CMS continues to protect people enrolled in Medicare Advantage plans from significant increases in costs or cuts in benefits.  Access to supplemental benefits remains steady, and beneficiaries’ average out-of-pocket spending remains constant.  The average projected premium for 2013 increased by only $1.47 from last year, averaging to $32.59; 2013 projected premiums are 10 percent below 2010 premiums.

 

Not only does access to Medicare Advantage remain strong, as 99.6 percent of Medicare beneficiaries have access to a Medicare Advantage plan in 2013, people with Medicare have access to a wide range of high-quality plan choices, with more four and five star plans than were previously available.  On average, there are 28 non-employer Medicare Advantage plans to choose from in nearly every county across the country. 

The average premium for prescription drug plans will remain nearly the same in 2013. Based on plans’ projections, the average 2013 monthly premium for basic prescription drug coverage is expected to be $30, while average premium for 2012 was $29.67.  New tools from the health reform law and slow growth in Medicare drug spending have kept the cost of prescription drug coverage from growing.

 

PROTECTING SENIORS AND TAXPAYERS FROM MEDICARE FRAUD

 

Seniors and people with disabilities in Medicare are benefitting from a more secure program. The Affordable Care Act contains new tools and enhanced authority to crack down on criminals who are looking to defraud Medicare. These provisions, many of which have been in effect since 2010, are protecting seniors and taxpayers from fraudsters. As a result of those efforts, we recovered record amounts of fraudulent payments, totaling $10.7 billion from 2009 to 2011.

 

In 2012, the Affordable Care Act continued to make a significant impact in the fight against fraud by:

•             Increasing the federal sentencing guidelines for health care fraud offenses by 20‐50 percent for crimes that involve more than $1 million in losses. The law establishes penalties for obstructing a fraud investigation and makes it easier for the government to recapture any funds acquired through fraudulent practices.

•             Stopping bad actors from entering the system, by making categories of providers and suppliers who have historically posed a higher risk of fraud or abuse undergo a higher level of scrutiny than others before enrolling or re‐enrolling in the Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP). From March 2011 through the end of 2012, over 400,000 providers and suppliers have been subject to the new screening requirements. Almost 150,000 providers and suppliers lost the ability to bill the Medicare program due to the Affordable Care Act requirements and other proactive initiatives.

•             Fostering better coordination among states, CMS, and law enforcement partners at the Office of Inspector General and Department of Justice. New rules authorize CMS to suspend Medicare payments to providers or suppliers during the investigation of a credible allegation of fraud. CMS suspended or took other administrative actions against 160 providers in three coordinated takedowns.

•             Providing an additional $350 million over 10 years to ramp up anti‐fraud efforts, including increasing scrutiny of claims before they are paid, investments in sophisticated data analytics, and more “feet on the street” law enforcement agents and others to fight fraud in the health care system.

•             Expanded funding for Senior Medicare Patrols – groups of senior citizen volunteers who educate and empower their peers to identify, prevent and report health care fraud. Additionally, to make spotting fraud easier for seniors, CMS redesigned the statement that informs beneficiaries about their claims for Medicare services, making it clearer which information to check and how to report potential fraud.

 

President Obama has made fraud prevention a cabinet-level priority with the creation of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) in 2009. This is a joint effort between HHS and DOJ to fight health care fraud by increasing coordination, intelligence sharing and training among investigators, agents, prosecutors, analysts, and policymakers. A key component of HEAT are the Medicare Strike Force teams which are comprised of interagency teams of analysts, investigators, and prosecutors who can target emerging or migrating fraud schemes, including fraud by criminals masquerading as health care providers or suppliers. This effort received a boost in 2012 with the formation of a ground-breaking new Healthcare Fraud Prevention Partnership between HHS, DOJ and private organizations designed to find and stop scams that cut across public and private payers. This partnership will help those on the front lines of industry anti-fraud efforts share their insights with investigators, prosecutors, policymakers, and others.

 

The Medicare Strike Force coordinated three major takedowns in 2012.  The largest action was in May 2012 when 107 individuals, including doctors, nurses and other licensed medical professionals, were charged in seven cities for their alleged participation in Medicare fraud schemes involving more than $452 million in alleged false billing. This coordinated takedown involved the highest amount of false Medicare billings in a single takedown in Strike Force history. HHS also suspended or took other administrative action against 52 providers, using authority under the Affordable Care Act to suspend payments until an investigation is complete.

 

The pdf version of the report will be posted at: http://www.cms.gov/apps/files/MedicareReport2012.pdf