Medicare Drug Estimates Soar
President Bush added Medicare to the government's fix-it list Wednesday after new figures showed the first full decade of the program's prescription benefit will cost taxpayers $724 billion.
"There's no question that there is an unfunded liability inherent in Medicare that Congress and the administration is going to have to deal with over time," Bush told reporters.
"Obviously I've chosen to deal with Social Security first," he added. "Once we modernize and save Social Security for a young generation of Americans, then it'll be time to deal with the unfunded liabilities of Medicare."
CBS' John Roberts reports that Democrats want to re-open the bill - and change it to allow Medicare to negotiate for lower drug prices. And even some Republicans who'd worried about the financial burden of an enormous new entitlement seemed
."We received $400 billion dollar estimates," Republican Sen. Olympia Snowe of Maine said. "So now what is driving these issues we have to know."
However, White House officials say the new estimate isn't a surprise — because it's for a period two years farther down the road, when the drug benefit has been fully phased in.
"Our estimates of the cost of the medicare prescription drug benefit are the same as they were before," Mark McLellan, of the Centers for Medicare and Medicaid Services told Roberts. "Now we're into 2005 so we're looking further into the future."
The new figure for years 2006 through 2015 is much higher than the $534 billion cost calculated for years 2004 through 2013. That's because under the previous decade-long projection, the benefit didn't exist for two of the 10 years.
Congress passed the prescription drug benefit at the end of 2003, but except for some low-income seniors, it delayed making it available until January 2006.
Nonetheless, several lawmakers said Wednesday that they had been deceived.
"This new information further demonstrates what appears to be an attempt to dupe Congress and win passage of the legislation," said one such lawmaker, Sen. Dianne Feinstein, D-Calif., calling for an investigation by the Senate Finance Committee.
Some Republicans long skeptical of the administration's estimates also expressed alarm at the escalating costs as more people reach age 65 and qualify for it and drug prices continue to rise. The administration estimates that the number of people covered by the prescription benefit will rise in the first decade from 36.9 million people covered in 2006 to 45.8 million people in 2015.
"I do think we are going to have to go back and re-address it," said Senate Budget Committee Chairman Judd Gregg, R-N.H.
Lawmakers used the revised estimate Wednesday to revive proposals to allow drug importation from Canada and to let the federal government negotiate drug prices. Both are now forbidden.
Congress narrowly approved the drug legislation in 2003 after an extraordinary all-night debate. At the time, Republican leaders assured wavering lawmakers that the program would cost $400 billion, including expected savings. The administration estimated the cost at $534 billion two months later, after the law was enacted.
The $724 billion figure is in documents obtained Wednesday by The Associated Press and related to the president's Monday budget request to Congress. Without anticipated savings included in the calculation, the cost of the program over the next decade could swell to $1.19 trillion, according to the documents.
White House Budget Director Joshua Bolten said the new price tag of $724 million reflects $134 billion in savings the government expects because states are paying some drug costs, $145 billion more from beneficiaries' premiums and $200 billion in savings by switching some Medicaid prescription benefits to Medicare.
Under the benefit: