The Administration Finally Releases Some Medicare Drug Estimates

Last week, Medicare chief actuary Rick Foster released to Congressional staff a short memo explaining the differences between the Administration and Congressional Budget Office (CBO) estimates of the Medicare drug bill.

By now, everybody who follows politics knows that Mr. Foster's job was threatened last year to prevent his office from releasing its less favorable (more expensive) estimates.

Over the last two weeks, Mr. Foster has displayed a rare and difficult courage by answering questions frankly about his office's estimates and the political obstacles to presenting the results to Congress (and the public).

However, the cat's finally out of the bag, and the Administration's full estimates are gradually becoming available to the public.

The Medicare Actuary's estimate of the cost of the Medicare bill is now available as part of the new 2004 trustees report in a simple table, and the cost of Medicare Part D (the drug benefit) is now available in detailed tables.

Medicare's formal estimates of Part A (hospital) and Part B (physician and outpatient costs) are also available.

These detailed tables are not for the faint of heart. But finally, the academic community and the think tanks can start getting a closer look at why the Medicare actuaries assumed last year's drug bill would cost so much more.

The real scandal of last year's Medicare bill was the official reluctance -- from both the Congressional leadership and the White House -- to share analytic material with the public. It typifies the Bush Administration's disdain for open discussion of facts and alternative interpretations or theories.

These guys will politicize anything, even the most important (and expensive) changes to an entitlement program since 1973.

In this case, an alternative set of estimates and explanations stood in the way of a (supposed) landmark political victory for the Republican leadership: delivery of a long-awaited drug benefit and the endorsement of AARP, the largest seniors' group.

However, the public reaction has been mixed at best and unfavorable at worst. (One silver lining is that expectations for the drug benefit are now very low. As a result, seniors will probably really appreciate the "discount cards" being readied for introduction this summer. The cards are an interim benefit designed to help seniors get better drug prices as they await the larger drug benefit, which is not scheduled for implementation until 2006.)

We hope that the Administration and the Congressional leadership will in the future be more tolerant of full discussion of important policy decisions, including dissenting views. The people and their representatives in Congress deserve better than this Medicare mess.

Links:
Medicare Actuary's memo on differences between CBO and Administration estimates (dated February 5, 2004, released to Congressional staff on March 19, 2003)

Medicare Actuary's cost table for Medicare drug bill (released March 23, 2004 as part of the 2004 Medicare trustees report)

Medicare Actuary's detailed Part D (drug benefit) estimates (dated December 23, 2003, released to Congressional staff on March 19, 2004)

Medicare Actuary's detailed Part A (hospital) estimates (dated December 23, 2003, released to Congressional staff on March 19, 2004)

Medicare Actuary's detailed Part B (physician and outpatient) estimates (dated December 23, 2003, released to Congressional staff on March 19, 2004)

Medicare Actuary's cost table from June 11, 2003, which shows an estimate of $551 billion over 10 years for a drug benefit plan with roughly the same dimensions as the drug bill that was eventually enacted.

Centrist Policy Network Medicare, Tax Cuts, and the Era of BS Budgeting (February 8, 2004)

Centrist Policy Network Medicare and Rx Drug Resource Page

Posted by Jeff Lemieux at March 22, 2004 11:07 AM