Setting The Record Straight: Medicare Drug Benefit Estimates Unchanged

Republican National Committee ^ | February 10, 2005

[RWR8189]

Myth:  Yesterday’s Washington Post story (p A1), headlined “Medicare Drug Benefit May Cost $1.2 Trillion,” is simply wrong.  The article says “the White House released budget figures yesterday indicating that the new Medicare prescription drug benefit will cost more than $1.2 trillion in the coming decade, a much higher price tag than President Bush suggested when he narrowly won passage of the law in late 2003.”  This statement in the first paragraph of the story is flat wrong. 

 

Here are the Facts:

 

In 2003, President Bush committed to spending $400 billion over the next 10 years (2004 to 2013) to modernize Medicare and add a Prescription drug benefit to the program.

In December 2003, President Bush signed into law the Medicare Modernization Act, which the Congressional Budget Office scored as costing $395 billion over the 10 year period the President discussed (2004 to 2013).

The Medicare Actuaries later estimated that the Act’s 10 year cost for the period 2004-2013 would be $534 billion.  The Congressional Budget Office continued to estimate $395 billion for the same time frame.

The $1.2 trillion figure from today’s Washington Post is flat wrong, because it does not take into account savings to the government from premium payments, state payments, and savings from the Medicaid system.

 

Remember:

 

Beginning next January, all Medicare beneficiaries will be eligible for prescription drug coverage, regardless of their income, or whether they’re enrolled in traditional fee-for-service or a Medicare Advantage plan.

Seniors already are benefiting from better preventive coverage under Medicare that took effect last month.  These new benefits include screenings for diabetes, heart disease and breast cancer.  In addition, beneficiaries entering the Medicare program are eligible for a "Welcome to Medicare" physical. 

Through the Medicare-approved drug discount program, the purchasing power of seniors is finally being pooled to provide real savings on prescription medicines.  Prior to the discount program, seniors often have had to pay full price for drugs.  And the drug card program also gives seniors unprecedented information on drug prices to comparison shop.  More than 6.2 million of these seniors are now saving on their prescriptions through Medicare drug discount cards.

Seniors can use the card to save 15 to 30 percent off the usual retail price of most brand name drugs and more on generics at neighborhood pharmacies.

Low-income seniors can get these savings and an additional $600 a year – a total of $1,200 for 2004 and 2005. An estimated 1.7 million seniors are receiving this credit through cards with the Medicare-approved seal. There is no enrollment fee on any card for people who qualify for the $600 low-income credit.

Beneficiaries who exhaust the $600 subsidy may get additional savings. A growing list of drug manufacturers have agreed to make many of their products available at a nominal price to beneficiaries who have used up their $600 subsidy on prescription medicines; these seniors are benefiting in three important ways from the cards:

1. Lower prices on their medicines;
2. A $600 subsidy to help them buy these medicines at the discounted prices; and
3. Availability of drugs at a nominal price through manufacturers once they've spent the subsidy.

[NeoCaveman]

If it only costs 3 times the original 400 billion (over ten years) I'll be pleasantly suprised.

[OldFriend]

I heard Ron Insana on WABC radio this morning spreading the lie! Snickering about how it won't be easy for President Bush to pass social security since this information came out.

The RNC needs to fire up it's email so the TRUTH gets out there.

[CyberAnt]

I saw the dems on TV - retracting their statements about the incorrect dollar amounts - which the WashPost printed. Looks like the WP has another correction to make.

[nonliberal]

Medicare Drug Benefit Estimates Unchanged

I call bu!!$h!+.