Medicare money pit
A Times EditorialAs the cost of the Medicare drug program continues to climb, it's becoming clear that the Bush administration needs a prescription for truth serum.
Published February 11, 2005
The cost of the Medicare drug program is growing faster than Pinocchio's nose, and for the same reason. When the Bush administration pushed the measure through Congress in late 2003, it promised lawmakers the 10-year cost would not exceed $400-billion. Two months later, a Medicare official revealed that the administration knew all along the real price tag was more than $500-billion. Now we find out that buried in President Bush's budget is the latest estimate - $1.2-trillion.
How the amount grew threefold in a matter of months is a tale of deceit that should outrage members of Congress, even Republicans.
Beginning in 2006, Medicare recipients will be offered drug coverage, although the promised benefit has already been diminished by the fact that the law prohibits Medicare from negotiating lower prices with the drug companies. Whether the program proves to be popular remains to be seen, but one thing is already certain: The Bush administration has never been honest about the cost.
Medicare's chief actuary, Richard Foster, knew for months before the vote that the $400-billion promise couldn't be kept, but he was told he would be fired if he shared that information with Congress. The order, Foster believed, came from the White House.
Now that the cost has grown to $1.2-trillion, the administration's attempt to explain the price inflation only hurts its credibility more. The new projection is for a different 10-year period, explained Mark McClellan, administrator of the Centers for Medicare and Medicaid Services. The estimate given Congress included 2004 and 2005, years when the drug coverage wasn't even offered, and now the cost covers a decade of full implementation, he argued. What that really means is that Congress was given a bogus quote, one that covered only 8 years of expenditures.
Besides, McClellan said, the new program will lead to savings that will cut the cost to $720-billion. Apparently, he said that with a straight face. Yet members of Congress who believe the latest figure have only themselves to blame if, or probably when, it proves false.
There is nothing surprising in any of this. The Bush administration has played financial games from the time it began turning a healthy surplus into a gaping hole in the budget. It is doing so again with its plan to privatize Social Security, by exaggerating the retirement program's financial condition and low-balling the cost of adding individual accounts.
Congress should rewrite the Medicare drug program to get costs under control, and it should start by demanding that the government drive a hard bargain with the pharmaceutical industry to lower the cost of prescriptions.
Congress should also admit that the administration's financial projections cannot be trusted. After all that has happened, only a fool would believe the numbers coming out of the White House.