Spending on Medicare Law Could Be $42B Higher Than $534B Estimate, OMB Figures Indicate
Over the next decade, spending related to the new Medicare law could be $42 billion higher than previously estimated, according to an estimate of the program's projected spending by Office of Management and Budget officials and Medicare actuaries, the Washington Post reports. When Congress first considered the Medicare legislation, President Bush said that spending would not exceed $400 billion over 10 years, but after the legislation was enacted, federal actuaries released an estimate of $534 billion over 10 years. The latest figures "an extra" $176 billion in Medicare spending over the next decade, and $42 billion of that increase will be "related to" the Medicare Modernization Act.
Related V. Attributable Costs
Several budget analysts said the latest estimate, which was provided to the Post late last week, indicates that spending related to the new law could total as much as $576 billion over 10 years. However, CMS Administrator Mark McClellan said that the projected cost of the program is not simply $534 billion plus the $42 billion mentioned in the new estimate because spending "related to" the drug benefit is not the same as spending "attributable" to the benefit. McClellan added that CMS actuaries have not re-estimated the cost of the law and that the new figures are largely adjustments to the "baseline," or projected spending levels on Medicare, which is likely to cost $4 trillion over the next 10 years. Joel Kaplan, deputy OMB director, said the 10-year projections were privately given to some members of Congress, though he said his agency typically only publishes five-year projections because it does "not believe anything beyond five years is a reliable or certain estimate." After reviewing the internal projections, Sen. Edward Kennedy (D-Mass.) said, "This shows once again that it's high time for the Bush administration to level with the American people about its misguided Medicare law" (Connolly, Washington Post, 9/19).
Related Coverage
ABCNews' "This Week" on Sunday included an interview with former Treasury Secretary Robert Rubin about several issues, including Medicare funding (Stephanopoulos, "This Week," ABCNews, 9/19). A transcript with highlights of the interview is available online.
