New US Medicare Rx cost estmates from CBO

While the estimated costs of providing a Medicare prescription drugprogram for US seniors are rising rapidly, they are not now expected to be as high as had been previously feared, according to newly-released estimates from the Congressional Budget Office.

The Office says that it now estimates the total cost of the bipartisan Senate plan for a prescription drug benefit put forward by John Breaux and William Frist (Marketletters passim) at $176 billion over 10 years, and that Senator Robert Graham's proposal would cost $318 billion over the period, compared with earlier forecasts putting the total costs as high as $400 billion. However, the report also notes that the Office's estimates for prescription drug expenditures under both proposals have gone up significantly since last year's forecasts, with this aspect of the Breaux/Frist plan now expected to be 18% higher than anticipated last year and the Graham proposal forecast to cost 31% more.

Senator Max Baucus, chairman of the Senate Finance Committee, said the new estimates indicate that the longer Congress waits to enact a Medicare prescription drug benefit, the more expensive it will become, according to Reuters reports, while Finance health subcommittee chairman John Rockefeller hailed the latest estimates as "great news" which "confirm that we can provide a universal benefit."