NCPA - National Center for Policy Analysis

Health Care Program Comes at High Cost

June 30, 2003

In expanding Medicare to cover the high cost of prescription drugs, Congress and the White House have agreed to a flawed approach that could leave many elderly still facing high out-of-pocket expenses. Congress largely ducked needed reforms to rein in Medicare's explosive growth, and the nation remains exposed to potentially catastrophic costs, according to a USA Today editorial.

Lawmakers are relying on a bunch of gimmicks that underestimate the huge tab likely to be foisted on taxpayers, says USA Today:

  • The $400 billion the benefit is projected to cost over the next 10 years is achieved only by delaying the effective date of the benefit for three years.
  • Then the expected cost starts shooting up, making the program more than twice as expensive in the subsequent 10 years.
  • And even the official forecasts likely understate the costs, if Medicare's history is a guide: In 1972, for example, Congress added a kidney dialysis benefit that was projected to grow to less than $3 billion by 1995; the actual amount spent was 10 times that.

The nation deserves a better effort to protect seniors' welfare and shore up Medicare's financial future than the prescription drug benefit Congress has cobbled together, says USA Today.

Source: Editorial, "Medicare plan's benefits shortchange seniors," USA Today, June 30, 2003.

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