A White House proposal to reform Medicare would cost far more than the administration estimates, congressional budget advisers said yesterday, as President Clinton stepped up his campaign to sell the centerpiece of his plan: offering all older Americans help in paying for prescription drugs.
The director of the Congressional Budget Office told a Senate committee that the president's plan would cost the government $111 billion over the next decade, more than double the $45.5 billion price tag Clinton pinned to the proposal when he unveiled it three weeks ago.
Testifying before the Senate Finance Committee, CBO Director Dan L. Crippen said the administration had underestimated by nearly $50 billion how much drug prices will rise by 2009. And Crippen said the White House had overstated by $18 billion how much money the government could save through a series of other changes to the nation's health insurance program for the elderly.
The head of the General Accounting Office, David M. Walker, also questioned the wisdom of adding an expensive drug benefit to Medicare because the program is expected to run out of money early in the next century. "The unfunded promises associated with today's program should be addressed before or concurrent with proposals to make new ones," Walker said in testimony prepared for the committee.
Their assessments, however, did not rock the administration's fervent defense of its plan, or the budget assumptions behind it. "We stand behind our . . . projections," said Health and Human Services Secretary Donna E. Shalala, who also appeared before the Finance Committee yesterday. The administration's budget analysts for health policies have in the past "been right on target," she added.
Shalala was on Capitol Hill while Clinton traveled to Michigan to renew his call for a new part of Medicare that would offer help in paying for drugs to all 39 million elderly and disabled people in the program.
Even for many Medicare patients who already have access to drug benefits, Clinton told several hundred people at Lansing Community College, that coverage is "unstable, unaffordable and disappearing rapidly."
Created in the mid-1960s when drugs were a less central aspect of medical care, the Medicare program helps people pay for doctor and hospital bills. But it covers only medications dispensed in the hospital or other institutions, not ones that patients take at home.
With pharmaceutical costs escalating far more rapidly than other health care expenditures, a new drug benefit for Medicare has become a rallying cry for both political parties. But Republicans and Democrats are divided over how many people deserve that federal help.
Republicans, including several members of the Finance Committee who criticized the president's plan yesterday, contend that Medicare should help pay for drugs only for those patients who are poor and cannot get insurance for medicine anywhere else.
Clinton disagrees, contending that much of the existing insurance that helps elderly patients pay for medicine is expensive and provides relatively meager benefits. Yesterday's trip to Michigan, where he released a new analysis prepared for the White House, was intended to buttress his point of view.
The analysis shows that one-fourth of all Medicare recipients get drug coverage through retiree benefits programs offered by their former employers, and that the percentage of companies offering such coverage decreased from 40 percent to 30 percent between 1994 and last year. The administration contends that those retiree plans typically are the only type of drug coverage that is affordable for older people.
The report says that one-third of Medicare patients have no coverage for drugs, while most of the rest get coverage from expensive private supplemental policies, known as Medigap, or from managed-care plans, many of which are starting to charge more for medicine or to drop out of Medicare altogether.
In addition, the analysis seeks to counter Republican arguments that only the poor need help in buying medicine, saying that slightly more than half the Medicare patients without drug coverage are middle-class.
Starting in 2002, Clinton's plan would pay half the costs of patients' drugs, up to a certain limit, in exchange for a monthly fee. By the time the program would be phased in completely in 2008, patients would be charged $44 a month, and the government would chip in up to $2,500 a year.
Sen. John B. Breaux (D-La.), who led a federal Medicare reform commission that deadlocked in March, said yesterday that it would make more sense for the government to pay more for people with the largest costs for medicine, but to charge more affluent patients higher fees, an idea known as "means testing" that Clinton has rejected.
Shalala tried to play down Republicans' suggestion that the administration plan is too ambitious, calling it "an insurance scheme that, while helpful, is quite modest."