Medicare Rx Benefit Costs 82% More Than Expected

When President Bush and his GOP allies were browbeating the opposition into allowing the passage of a Medicare prescription drug benefit, they hid the real costs of their plans (more than $500 bn rather than $400 bn). Today we find out that even the $534 billion mark was grossly understated. The New York Times' Robert Pear has the story:

The Bush administration offered a new estimate of the cost of the Medicare drug benefit on Tuesday, saying it would cost $720 billion in the next 10 years.

That is much more than the $400 billion Congress assumed when it passed legislation creating the benefit in late 2003.

[...]

Representative Pete Stark of California, the senior Democrat on the Ways and Means Subcommittee on Health, said: "I told you so. We can't trust numbers provided by administration officials. They'll say anything to get a bill passed. And if the new drug benefit costs more, the extra money goes to their friends in the pharmaceutical industry, not to senior citizens."

Mr. Stark said the higher cost estimate showed that Congress should allow the secretary of health and human services to negotiate with drug manufacturers to secure lower prices for Medicare beneficiaries. The law forbids such negotiations. But Tommy G. Thompson, the former secretary of health and human services, said he wished Congress had given him the power to negotiate.

Congressman Stark is completely correct here. The administration knowingly deceived Congress and the American people about the true costs of this giveaway to the pharmaceutical industry so the excess pork that goes to PhRMA in the form of unnegotiated contracts should be removed.

[Update 10:56 PM Pacific]: The Washington Post's Ceci Connolly and Mike Allen report that the legislation will cost the country $1.2 trillion over the next decade.