Wes Hickman (202-224-5972) or Kevin Bishop (864-250-1417)
-- U.S. Senator Lindsey Graham (R-South Carolina) has introduced legislation designed to reign in costs of the Medicare prescription drug bill.
U.S. Senator Jeff Sessions (R-Alabama) has signed on as a co-sponsor.
“As we try to improve senior’s health care we cannot do it in a way that will doom their grandchildren with debts they cannot afford to pay,” said Graham. “I was always concerned the projected costs of the Medicare Prescription Drug Benefit would turn out to be wrong. Even I was surprised at how quickly and dramatically the projected costs of the program spiked. I’m afraid this isn’t going to be the last bit of bad news we receive about the long-term costs of this new entitlement.”
The new benefit was initially estimated to cost $395 billion over the next ten years when the bill passed Congress and was signed into law by President Bush in December 2003. A mere two months after becoming law, the Office of Management and Budget (OMB) revised the figure and projected the bill to cost an estimated $534 billion. This week, a Congressional Budget Office report pushed the cost to $849 billion over the next 10 years.
The Medicare Prescription Drug Cost Containment Act of 2005 would place a cap on the program’s expenditures equal to Congressional Budget Office (CBO) estimates for fiscal years 2005-2013, and allow for reasonable growth after that. Should the Medicare actuaries determine that the cap has been exceeded in any fiscal year the President would be required to submit to Congress legislation to reduce the cost of the Prescription Drug Benefit.
Graham proposes controlling the long-term costs of the program by:
- Placing caps on Medicare prescription drug outlays. The caps would be equal to the estimate of outlays for Prescription Drug Benefit for Fiscal Years (FY) 2005-2013 as estimated by CBO.
The caps for FY 2005-2013
2005: $800 million (program not in full effect)
2006: $25.7 billion
2007: $39.0 billion
2008: $44.6 billion
2009: $48.7 billion
2010: $53.7 billion
2011: $58.6 billion
2012: $65.3 billion
2013: $73.1 billion
- Requiring the President to submit legislation to Congress reducing the costs of the prescription drug benefit upon determination the cap will be exceeded in any fiscal year. The President’s legislation would be considered on a fast-track basis and could not be amended or filibustered. Failure by a President to submit legislation would allow any Senator to move to discharge from the Finance Committee any Medicare reform legislation to lower the cost of the drug benefit.
“The prescription drug benefit was tacked on to an already broken Medicare program without underlying reform,” said Graham. “We have a responsibility to protect future generations from overbearing deficits and look at ways to reign in spending and modernize entitlement programs.”
“I want seniors to have a prescription drug benefit, but I’m not prepared to do it at all costs,” said Graham. “The Medicare prescription drug benefit, as it’s currently structured, allows uncontrolled expansion that may topple the entire system.”