As Medicare costs rise, lawmakers seek changes

Some on Capitol Hill want to allow for negotiations for cheaper prescriptions

February 10, 2005|By Jill Zuckman and Mark Silva | Jill Zuckman and Mark Silva,CHICAGO TRIBUNE

WASHINGTON - Frustrated that new estimates show the cost of the Medicare prescription drug program skyrocketing, some lawmakers on Capitol Hill said yesterday that the law should be rewritten to require the government to negotiate for better deals from drug makers 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. Richard J. Durbin of Illinois, 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 played down the $724 billion figure yesterday, 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 before the start of the program, which lowered the overall cost.

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, a Nebraska Democrat who provided one of the key Democratic votes for the president's program.

Nelson said the shifting projections were causing him to feel trepidation about the numbers the Bush administration is using to prod Congress to revamp the Social Security program.

"When the bottom falls out of the numbers, it's bad," he said.

Sen. Edward M. Kennedy, a Massachusetts Democrat 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. "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 Bush 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 that they would not have voted for it had it cost much more.

After Bush signed the drug program into law, the White House said it would cost $534 billion over the same period. And Medicare's chief actuary said administration officials threatened to fire him if he told Congress that his estimate showed that the program would cost $500 billion to $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. Democrats also argued that the Medicare program, as a bulk purchaser of drugs, should be allowed to negotiate low prices on behalf of its beneficiaries. But the White House said that would be an improper use of government power to set prices.

Administration critics are seizing what they see as a chance to reopen the debates.

House Democratic Leader Nancy Pelosi of California said yesterday 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. Michael B. Enzi, a Wyoming Republican who is chairman of the committee that oversees health, education, labor and pensions.

But he said senators always knew that the program would get more expensive. "It shouldn't be a surprise to anybody," said Enzi, a former accountant.

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."

The Chicago Tribune is a Tribune Publishing newspaper.

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