March 6, 2005 in Nation/World

Cost of Medicare drug plan rises

Alan Fram Associated Press
 

WASHINGTON – Congress’ nonpartisan budget analyst added new fuel to the Medicare debate late Friday with new, higher cost estimates for a prescription drug program that has already drawn fire for its soaring price tag.

In a letter to lawmakers, the Congressional Budget Office said its estimate for the drug benefits for the 10-year period ending in 2015 had grown by $54 billion since January. No cumulative 10-year total was provided, but a separate CBO letter used figures that indicated a total over that period of $849 billion.

Significantly, though, that number omitted savings expected to accompany the new program. As a result, the new congressional estimate was not directly comparable to the $724 billion projection the Bush administration released last month, which factored in those savings.

If those savings were subtracted, the $849 billion figure would likely be lower than Bush’s $724 billion estimate, according to figures cited by the CBO.

Even so, the new numbers could further roil the politics surrounding the drug benefits, which don’t even take effect until 2006. They were released days before Congress’ Republican-run budget committees start writing fiscal plans that will include domestic spending cuts and call for savings from Medicaid and other benefit programs – but probably not Medicare.

“The price tag for the Republican Medicare prescription drug bill just gets higher and higher,” said Thomas Kahn, Democratic staff director of the House Budget Committee. “The underlying benefits for seniors never improve.”

“The drug benefit is a necessary improvement to Medicare,” said White House budget office spokesman Noam Neusner. “We are working to see the new drug law implemented fully, along with benefits such as greater individual choice” and other efforts to control costs.

Messages left for several congressional Republicans were not immediately returned.

Ever since they were enacted in 2003 for a presumed $400 billion 10-year price tag, the cost has crept steadily upward.

Lawmakers of both parties have accused the White House of withholding information about the program’s true costs to win conservatives’ votes that were crucial to congressional passage, a charge the administration denied.

Two months after passage, the Bush administration raised the 10-year cost estimate to $534 billion.

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