Medicare savings to tally $120 billion

Washington - Medicare officials estimate that the new healthcare law will save Medicare $120 billion over the next five years as a result of lower payments to insurers and hospitals, Medical News Today reports.

Reduced payments to companies such as Humana, UnitedHealth Group and WellPoint, all market leaders in Medicare Advantage enrollees, alone will generate $50 billion in savings, officials say.

Medicare officials say the $120 billion estimate breaks down as follows:

• Reforms of healthcare delivery systems - $55 billion
• Rewarding quality of care and reforming provider payments - $55 billion
• Patient safety improvements and reducing hospital readmissions and hospital-acquired conditions - $10 billion
• Reducing Medicare fraud and abuse - $1.8 billion
• Getting value for money for durable medical equipment - $2.9 billion
• Lowering payments to insurance companies - $50 billion.