USATODAY.com - Surprise! Medicare's drug benefit gets a mega markup

A rule of thumb in government is that new programs almost always cost more than politicians predict. So it should come as no surprise that the new Medicare prescription-drug benefit will cost taxpayers more than originally advertised.

When the plan to help seniors cope with skyrocketing drug costs passed Congress in 2003, the advertised price was $400 billion over 10 years. Two months later, the Bush administration “revised” the estimate to $534 billion. Now, Medicare officials project the cost to be $724 billion from 2006 to 2015, its first full decade.

As eye-popping as those numbers are, the real cost will likely be higher. Long-range projections are notoriously inaccurate. When Medicare, the government's health care system for the elderly and disabled, was first enacted in 1965, lawmakers predicted it would cost $9 billion by 1990. In fact, it cost $67 billion that year.

President Bush said Wednesday he plans to address Medicare after Social Security is fixed. He's got his priorities backward. In just six years, Medicare will begin spending more than it takes in, according to estimates that didn't even include the new drug law.

The drug law worsens that problem, and it does so in a foolish way. The benefit goes to all seniors, even though two-thirds already have some coverage from former employers or separate health policies. As many as 3.5 million may now lose that benefit as companies justify dropping their benefits for retirees because of the federal law, notes Families USA, a liberal health care advocacy group.

Without an infusion of new tax revenue, record federal deficits make the drug benefit unaffordable. Congress ought to revisit the law before it kicks in next January and figure out a way to target benefits to those who need them the most: people with low-to-moderate incomes or catastrophically high drug costs. But the greater need is to abandon piecemeal approaches to the nation's mounting health care crisis and face up to the politically unpalatable need for a comprehensive solution. An estimated 45 million Americans have no health insurance at all.

The Medicare drug benefit passed Congress after extraordinary arm-twisting and a conspiracy of silence about its true costs. Democrats called the benefit too stingy. The White House and Republican supporters in Congress stifled critics who said the costs were understated.

Reacting Wednesday to the latest cost estimate, House Minority Leader Nancy Pelosi, D-Calif., called the new figures “staggering” and said Congress should pass new legislation “to hold down costs and give seniors the true benefits they deserve.”