WASHINGTON -- Higher estimates for the cost of the Bush administration's new Medicare prescription drug benefit sent a ripple of anxiety across Capitol Hill yesterday and led some legislators to renew their call to pare back the program's price before it goes into effect in 2006.
The prescription drug benefit for older Americans was a tough sell in 2003 when it passed through Congress with razor-thin margins -- five votes in the 435-member House and 10 in the 100-member Senate. Many members felt that it was far too expensive.
The 10-year cost estimate at that time was just $400 billion, for the years 2004 to 2013, a far cry from the administration's latest estimate of $723.8 billion that the program will cost between 2006 and 2015.
Mark B. McClellan, the administration's Medicare chief, argued yesterday that the higher cost simply reflected the fact that officials were making projections farther in the future -- 2006 to 2015 instead of 2004 to 2013 -- when more baby boomers would be eligible for the benefits.
But that did not soothe concerns of lawmakers who believe that the White House underestimated the program's costs from the beginning to ensure the bill's passage.
Testifying yesterday before the Senate Budget Committee, Joshua B. Bolten, director of the White House Office of Management and Budget, said the administration would work with lawmakers to tamp down the program's costs.
One of the senators who told Bolten that he felt he had been misled was Sen. Jeff Sessions, R-Ala.
"When it gets much over $500 billion, I think we are at a point that is a crisis that needs to be confronted now, before people get addicted to these [Medicare payments for] drugs," he said. "It's really not a cut if it hasn't taken effect."
Sessions said the new projections might spur congressional support for a proposal being drafted by two other Republican senators, South Carolina's Lindsay Graham and Arizona's John McCain, that would require the Bush administration to offer a program fix in the event that its costs exceed the initial $400 billion price tag.
McCain, who voted against the bill with eight other GOP senators, yesterday said he wasn't surprised costs were increasing. "I knew that it was a new entitlement program with unprecedented profits for the drug companies and that the costs would escalate dramatically," he said.
The Arizona senator pointed to two heavily criticized aspects of the bill -- that Medicare administrators are barred from negotiating with drug companies for lower prices and that importing prescription drugs from Canada or other countries is prohibited -- as factors that would continue to drive up program costs.
The Senate's No. 2 Democrat, Richard J. Durbin of Illinois, said he would reintroduce legislation addressing the negotiating portion as early as today.
"There is no doubt that [the Medicare prescription program cost] is going to go up dramatically for one simple reason: There is no cost containment," Durbin said. "We should, as we do in the [Department of Veterans Affairs], have Medicare have open competition on these pharmaceuticals to bring the costs down."
A bipartisan group of senators, including Finance Committee Chairman Chuck Grassley, R-Iowa, Sens. Olympia Snowe, R-Maine, Edward Kennedy, D-Mass., and Byron Dorgan, D-N.D. -- combined forces yesterday to reintroduce legislation that would allow Americans to import medicines from Canada and two dozen other industrialized countries in an attempt to bring down U.S. drug prices.
When the Medicare prescription drug benefit goes into effect in 2006, Medicare officials estimate, 36.9 million people will be enrolled in the program. They estimate that, by 2014, as baby boomers retire, 45.8 million people will participate in the program.
Pennsylvania Reps. Melissa Hart, R-Bradford Woods, and Tim Murphy, R-Upper St. Clair, along with Pennsylvania Sens. Arlen Specter and Rick Santorum supported the prescription program legislation in 2003. Pennsylvania Reps. John Murtha, D-Johnstown, and Mike Doyle, D-Swissvale, opposed it.
Specter, chairman of the Appropriations subcommittee that oversees health and human services, yesterday said he was surprised by the new estimates and favored congressional oversight hearings to look into the cost of the program.
