Cost of Medicare drug benefit skyrockets
February 14, 2005
WASHINGTON - Â The Bush administration offered a new estimate of the cost of the Medicare drug benefit last week, saying it would cost $720 billion over the next 10 years.
That figure far outweighs the $400 billion price tag Congress was given when it passed legislation creating the benefit in late 2003.
But administration officials said the numbers were not comparable. The original estimate was for the years 2004 to 2013. The new estimate covers the period from 2006, when the drug benefit becomes available, to 2015.
CMS Administrator Dr. Mark McClellan said Tuesday that "there has been no significant change in the cost of the drug benefit" for the years 2006 to 2013. But, he said, the new estimate covers two additional years, 2014 and 2015, when Medicare enrollment will be larger and drug prices will be higher. In 2015 alone, he said, Medicare will spend well over $100 billion on the drug benefit.
The higher figure, which provides the first glimpse of the true cost of the drug benefit, could touch off a political uproar in Congress, where conservative Republicans were already expressing alarm about the costs of Medicare, including the drug benefit.
Passage of the Medicare bill was a major political achievement for President Bush and the Republican leaders of Congress. It squeaked through the House by a vote of 220 to 215, and some insiders believe it would probably not have been approved in its current form if lawmakers had thought the cost would exceed a half-trillion dollars.