Senate Finance Committee Members Criticize, Scully Defends Bush’s Proposed $190B Plan to Reform Medicare

Senate Finance Committee members on March 7 "derided as insufficient" President Bush's proposal to spend $190 billion over the next 10 years to reform Medicare and add a prescription drug benefit to the program, CongressDaily reports. Sen. Max Baucus (D-Mont.) said, "I think most people would find $190 billion incredibly low." Sen. Charles Grassley (R-Iowa) added, "Obviously I think we should go much further than the president would go." CMS Administrator Thomas Scully "defended" the $190 billion figure, although he "made it clear" that the Bush administration would discuss larger proposals. Scully also said that the Bush administration's proposed pharmacy discount card would serve as a "needed first step" to a Medicare prescription drug benefit. "It would help us figure out how to run a prescription drug program, which we have absolutely no experience doing," he said (Rovner, CongressDaily, 3/7).

AARP Proposal
The AARP on March 7 told Senate Finance Committee members that Congress should spend $750 billion over 10 years to reform Medicare and add a prescription drug benefit to the program -- more than three times the amount that Bush has recommended. Under the AARP proposal, the federal government would spend $350 billion over the next 10 years "explicitly" for a Medicare prescription drug benefit and place an additional $400 billion in a reserve fund that "could be used in part for a drug benefit" and other Medicare reforms, AARP Executive Director William Novelli said. He added that according to a survey of AARP members, Medicare beneficiaries "would not be likely to enroll" in a prescription drug benefit with a $50 monthly premium, and only one-third would enroll in a program with a $35 monthly premium (MacDonald, Hartford Courant, 3/8). Baucus said that a 10-year, $300 billion prescription drug benefit proposed last year by Democrats would have required Medicare beneficiaries to pay a $53 monthly premium (CongressDaily, 3/7). Novelli said, "Beneficiaries are not asking for free prescription drugs. But these payments must be seen as reasonable." However, lawmakers "reacted skeptically" to the $750 billion AARP proposal. "Anyone who says ($750 billion) simply has their head in the sand," Grassley said. Democrats on the committee did not criticize the AARP proposal "but were careful not to endorse it," the Hartford Courant reports (Hartford Courant, 3/8). A HealthCast of this hearing is available online.

Budget Concerns
Meanwhile, Congressional Budget Office Director Dan Crippen on March 7 released the agency's new estimates for Medicare costs. According to the CBO, Medicare will cost $248 billion in fiscal year 2003 and $3.6 trillion over the next 10 years. The 10-year figure, down $80 billion from the CBO's estimate in January, still exceeds the Bush administration's estimate by about $225 billion, CongressDaily reports. In addition, the CBO predicted that prescription drug spending for Medicare beneficiaries over the next 10 years would reach $1.8 trillion, a 21% increase from last year's estimate of $1.5 trillion. Crippen said that the increase "will not necessarily translate into increases of the same magnitude" for Medicare prescription drug benefit proposals. However, based on the new estimate, former Sen. Bob Kerrey (D-Neb.), now a member of the Concord Coalition -- a coalition advocating fiscal responsibility for Medicare, Medicaid and Social Security -- suggested "that Congress not even try" to add a prescription drug benefit to Medicare. "We cannot get from where we are now to where we want to go by adding a new and expensive benefit to an entitlement program," he said. Kerrey also said that "it could actually be less expensive" to establish a universal health insurance program. "It would mean that we would start thinking about ourselves as a single group of 280 million Americans who are all part of the same health system and who all need to face the challenge of matching our appetite for quality with our capacity to pay," he said (CongressDaily, 3/7).