NCPA - National Center for Policy Analysis


June 6, 2005

When Congress approved a drug entitlement for Medicare, it approved the largest single spending increase since the Great Society, complete with massive deficit financing, say Robert Moffit and Andrew Grossman of the Heritage Foundation. The latest Medicare trustees' report shows the long-term cost of Medicare's unfunded promises jumped roughly $2 trillion in just one year and the debt for the drug benefit alone jumped from $8.1 trillion to $8.7 trillion.

Rep. Jeff Flake (R-Ariz.) recognizes that the Medicare problem is not just a matter of dollars, but major health-care policy, and has a plan to deal with it. Flake's Medicare Prescription Drug COST Containment Act has three interlocking parts:

  • Delay the drug benefit for one year until Congress can figure out a way to pay for it.
  • Extend the new Medicare prescription drug-discount card program, which was slow to take off but has proven effective at channeling aid to those who need it most.
  • Maintain funding for seniors today receiving coverage through Medicaid who would have been dropped into the new program.

Word of the dreaded "doughnut hole" (a large gap in coverage that would leave many seniors with high drug bills unprotected) is starting to spread beyond Washington to seniors. Members of Congress may soon find themselves searching for a way out and Flake's solution should meet their need, say Moffit and Grossman.

Source: Robert E. Moffit and Andrew Grossman, "Defusing the Medicare Time Bomb," Heritage Foundation, May 26, 2005.


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