Wes Hickman (202-224-5972
– U.S. Senator Lindsey Graham (R-South Carolina), disturbed by a 35 percent rise in the projected cost of the new Medicare prescription drug benefit, will introduce legislation to reign in the cost of the program.
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.
Graham said his greatest concern is that the cost explosion is going to be borne by future generations and noted that every dollar spent on the new Medicare prescription drug benefit is borrowed money.
“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 didn’t vote for the bill last year because I was concerned the projected costs 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.”
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 the Congressional Budget Office (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.
“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 will topple the entire system.”
“My legislation limits Medicare prescription drug spending to the original $395 billion of borrowed money,” said Graham. “Any year the bill exceeds the original estimate, the President and Congress will be forced to act to reduce the cost. Controlling costs when you have to borrow all of the money is sound fiscal policy. It makes for a winning situation for today’s seniors and future generations of Americans.”