Frustrated that new estimates show the cost of the Medicare prescription drug program skyrocketing, some lawmakers on Capitol Hill said Wednesday that the law should be rewritten to require the government to negotiate for better deals from drugmakers and to allow patients to buy drugs from Canada.
“This is what happens when you forbid Medicare from negotiating lower prices from pharmaceutical companies, and you forbid Medicare employees from telling the truth about how much the law will cost until after it’s passed,” said Sen. Dick Durbin (D-Ill.), the assistant Senate Democratic leader. “We must put providing real help for seniors ahead of lining the pockets of the corporations that benefit when seniors get sick.”
Originally estimated to cost $400 billion over 10 years, the program is now expected to cost $724 billion in its first decade, with costs reaching $100 billion a year in the next decade, the Bush administration said this week.
White House press secretary Scott McClellan downplayed the $724 billion figure Wednesday, pointing out that it covers the 10-year period beginning in 2006, just as the program takes effect. The earlier 10-year estimate covered the two years prior to the start of the program, which lowered the overall cost.
“You have to look at it from the cost of when it’s fully phased in,” McClellan said. “The previous number was focused on a different time period. There are two additional years that you’re talking about here.”
Nevertheless, lawmakers expressed chagrin that the measure they had voted for at the end of 2003 has turned out to be so expensive.
“I was surprised, disappointed and concerned,” said Sen. Ben Nelson (D-Neb.), who provided one of the key Democratic votes for the president’s program.
Nelson said the shifting projections were causing him to feel some trepidation about the numbers the administration is citing to prod Congress to revamp the Social Security program. “When the bottom falls out of the numbers, it’s bad,” Nelson said.
Sen. Edward Kennedy (D-Mass.), who voted against the Medicare drug legislation, called the news “a fresh blow to the administration’s credibility” and said the need for drug reimportation is now even more urgent.
“The problem is not caused by its being too generous toward seniors,” Kennedy said of the drug program. “In fact, it is not generous enough. Too much of the cost of the program goes to increase the drug industry’s already-inflated profits.”
Before Congress passed the legislation in November 2003, the administration said the program–which provides a new prescription drug benefit under Medicare–would cost $400 billion over 10 years. The bill squeaked through Congress, and some lawmakers made it clear they would not have voted for it had it cost much more.
Costs revised before
After Bush signed the program into law, the White House revised the cost to $534 billion for the same 10-year period. And Medicare’s chief actuary said administration officials threatened to fire him if he told Congress that he expected the program could cost between $500 billion and $600 billion.
During the Medicare debate, Democrats tried unsuccessfully to add a provision allowing Americans to reimport drugs that had been exported to Canada, where drugs often are much cheaper because of price controls. But the Bush administration and the drug industry said there is no way to guarantee the safety of such drugs.
Democrats also argued that the Medicare program, as an enormous bulk purchaser of drugs, should be allowed to negotiate low prices on behalf of its beneficiaries. But the White House said this was an improper use of government power to set prices.
Now administration critics are seizing what they see as a chance to reopen the debates.
Democrats seek hearings
House Democratic Leader Nancy Pelosi of California said Wednesday that Congress should hold oversight hearings and then rewrite the Medicare law. “The law the Republicans passed was larded up with billions of dollars for a slush fund for HMOs and windfall profits for the big drug companies,” Pelosi said.
Republicans, who are increasingly anxious about cutting the deficit, also expressed discomfort with the increased costs.
“I always have concerns about costs,” said Sen. Mike Enzi (R-Wyo.), chairman of the committee that oversees health, education, labor and pensions.
But Enzi said senators always knew that the program would get more and more expensive over the years. “It shouldn’t be a surprise to anybody,” said Enzi, who was an accountant before coming to Congress.
`Knew it would be costly’
Sen. Larry Craig (R-Idaho) said he wasn’t surprised at all. “We always knew it would be costly,” he said.
Sen. Rick Santorum (R-Pa.) said the estimates depend on how many seniors sign up for the program, but he wasn’t shocked that the cost went up. “Of course it’s going to be more expensive,” Santorum said.
Nine Republicans voted against the prescription drug program for seniors, including Sen. John McCain of Arizona, who complained that the legislation was a recipe for runaway costs.
“That’s what I predicted,” McCain said. “That’s why I voted against it. . . . I knew the costs would escalate.”
Without allowing the government to negotiate prices with pharmaceutical companies and allowing people to import drugs from Canada, there is no way to control costs, McCain said.
But McCain said he is not optimistic that Congress will approve those things. “Don’t underestimate the clout of the pharmaceutical companies,” he warned.
Budget chairman’s concerns
Senate Budget Committee Chairman Judd Gregg (R-N.H.), who also voted against the measure, said he believes Congress should revise the law to scale back the cost in some way. “I still am very suspect of this drug program and where it’s going and what it’s going to cost,” said Gregg, adding that he didn’t expect his Republican colleagues to go along with him.
But he said reimportation and negotiating with drug companies would provide little in savings.
At the White House, McClellan insisted that providing prescription drugs to seniors through Medicare remains an important concept.
Bush is committed to “modernizing Medicare for seniors,” McClellan said. “It didn’t make sense that Medicare was paying for the heart surgery that a senior needed, but didn’t pay for the medicines to prevent that from being necessary in the first place.”
