Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Analysts: Medicare Drug Costs Will Rise
Yahoo News ^ | 11/25/03 | Mark Sherman - AP

Posted on 11/25/2003 3:51:17 PM PST by NormsRevenge

WASHINGTON - Seniors will face annual increases in premiums and deductibles — and a growing gap in coverage — for the prescription drugs they buy under the new Medicare law, budget analysts say.

For example, the $250 annual deductible at the start of the program in 2006 is projected to rise to $445 by 2013.

The legislation that won final congressional approval Tuesday would allow seniors to buy coverage — at an estimated monthly premium of $35 — for their prescription drugs beginning in three years. After they agreed to the monthly premiums and paid their first $250 in pharmacy bills, the coverage would kick in, paying 75 percent of their bills between $250 and $2,250.

After that, there would be no further coverage until beneficiaries' drug bills for the year reached $5,100, leaving a gap of $2,850 that they would have to pay out of their own pockets. Above $5,100 the insurance would pick up roughly 95 percent of costs.

Those are the numbers supporters of the bill have used, with little mention that they would change in future years.

But after just one year, the Congressional Budget Office (news - web sites) projects that seniors would see their $250 deductible and the $2,850 gap for which there is no coverage both jump 10 percent.

By 2013, the eighth year of the program, the deductible and the coverage gap are both projected to grow by 78 percent.

In other words, seniors would pay a $445 deductible and those with the largest drug bills would be entirely responsible for more than $5,000 in drug costs.

"I think these numbers will come as a shock to consumers and they are pretty optimistic projections based on what drug costs are going to do," said Gail Shearer, a health policy analyst at Consumers Union and an opponent of the legislation. She noted the focus has been on 2006, the year the prescription drug benefit begins.

At the same time, CBO said, Medicare's contribution also would rise each year so that the program would pay $1,500 of the first $2,250 in drug costs in 2006 and $2,666 of the first $4,000 in 2013.

Insurance premiums, which are not set in the bill even for 2006, are projected to increase 65 percent to $58 a month by 2013.

The numbers were contained in a CBO analysis provided to Sen. Don Nickles, R-Okla., the Senate Budget Committee chairman, and are posted on the CBO Web site.

The projections reflect the lawmakers' decision to tie the cost of the program to increases in drug costs from inflation, new costly drugs coming on the market and expected increases in drug purchases.

"The numbers inflate with the cost of the program. I think that's a good provision," said Nickles, who voted against the bill.

But David Certner, an official of AARP, said: "One of our complaints has been that this benefit would become more unaffordable over time if pegged to drug costs. This bill does not do enough to hold down drug costs."

The AARP tried but failed to get Congress to include measures to slow the rise of drug prices — including allowing cheaper drugs from Canada and giving Medicare authority to negotiate drug prices. Still, the 35-million-member seniors organization endorsed the bill.

"This is a key issue we'll be coming back to," Certner said.

CBO Director Douglas Holtz-Eakin said there is not even an assurance that the initial monthly premium for the drug benefit will be $35. That number could change by 2006 depending on the many "moving pieces" on which the formula is based, he said.

___

On the Net:

Congressional Budget Office: http://www.cbo.gov/


TOPICS: Business/Economy; Culture/Society; Government
KEYWORDS: analysts; healthcare; medicare; medicaredrugcosts; willrise

1 posted on 11/25/2003 3:51:18 PM PST by NormsRevenge
[ Post Reply | Private Reply | View Replies]

To: NormsRevenge
Medicare Plan Includes $1B for Immigrants
http://www.freerepublic.com/focus/news/1028452/posts?page=2
2 posted on 11/25/2003 3:54:23 PM PST by MrFreedom
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge

3 posted on 11/25/2003 4:03:19 PM PST by MrFreedom
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge
Bump.
4 posted on 11/25/2003 4:04:00 PM PST by k2blader (Haruspex, beware.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge
Well, this is mindless reporting. Without this handout they would pay all of it right? A good reporter would report the root cause and compare what the people would pay before and after the plan. Its never enough for these people.
5 posted on 11/25/2003 4:05:23 PM PST by plain talk
[ Post Reply | Private Reply | To 1 | View Replies]

To: NormsRevenge
It requires neither data nor prognostication to know that when a third party with deep pockets pays for something, the price of that thing will rise.
6 posted on 11/25/2003 4:20:48 PM PST by Agnes Heep
[ Post Reply | Private Reply | To 1 | View Replies]

To: MrFreedom
Hmmmm....so, do the Health Savings Plans start SOON? (for the high deductible plans?)
7 posted on 11/25/2003 4:53:05 PM PST by goodnesswins (Aren't you glad you LIVE IN THE USA?)
[ Post Reply | Private Reply | To 3 | View Replies]

To: NormsRevenge
During the 2000 campaign, candidate Bush pledged to reform Medicare and incorporate a market based-market driven prescription drug program that would assist the elderly poor in paying for the high costs of drugs. This isn't the program the President talked about. This presciption drug program is the largest single increase in spending by the federal government since Medicare itself was created in 1965. The Congressional GOP and President Bush should both be ashamed for allowing this highly liberalized bureaucratic behemoth to become law. This isn't governing by fiscally responsible conservative public servants. This is an outrage!
8 posted on 11/25/2003 5:15:52 PM PST by Reagan Man (The few, the proud, the conservatives.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Reagan Man
Those who will "benefit" from this bill are the Drug Companies...

...and the politicians they support.

WHICH ONES ARE THESE?

That is all there is and all we need to know!
9 posted on 11/25/2003 5:19:05 PM PST by onemoreday
[ Post Reply | Private Reply | To 8 | View Replies]

To: NormsRevenge
Don't a lot of things tend to get more expensive as the years pass?
10 posted on 11/25/2003 5:27:26 PM PST by syriacus (In this world there's matter, antimatter, and ANTIFACT. Schumer is an expert on antifacts.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Agnes Heep
It requires neither data nor prognostication to know that when a third party with deep pockets pays for something, the price of that thing will rise.

The whole bill is just a subsidy to drug companies, which allows them to go on raising prices with impunity. Notice that the ban on private importation of drugs from abroad is maintained, which is why I'm going to keep on proudly doing it illegally.

11 posted on 11/25/2003 5:31:38 PM PST by BlazingArizona
[ Post Reply | Private Reply | To 6 | View Replies]

To: NormsRevenge
Has there ever been a market wherein the intrusion of government funds and programs did not cause prices to rise?

okie01's universal law of economics: In a federally-subsidized market, prices will rise to the level necessary to consume all the available funds.

12 posted on 11/25/2003 5:38:07 PM PST by okie01 (www.ArmorforCongress.com...because Congress isn't for the morally halt and the mentally lame.)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson