Estimates on Medicare hit $2 trillion

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The new Medicare prescription-drug benefit could cost as much as $2 trillion in its second decade, the Congressional Budget Office (CBO) said yesterday, especially if Congress fills in the coverage gaps in the current benefit.

And some Democrats already are proposing to do just that in a new bill they are set to introduce today.

"We're talking about huge costs," said Robert Moffit, director of the Center for Health Policy Studies at the Heritage Foundation, which opposes the new Medicare drug law and consistently has told Republican leaders that the benefits will be too costly in the long run. "What can I say? We warned them."

President Bush signed the Medicare prescription-drug bill into law yesterday. The new law -- estimated by CBO to cost $395 billion in the next decade -- would update Medicare, create a new prescription-drug benefit for all seniors and give private health plans an expanded role in health care delivery.

Democrats say it provides skimpy drug coverage and undermines traditional Medicare by tilting the field toward private health plans.

"We've only just begun to fight," Sen. Edward M. Kennedy, Massachusetts Democrat, told seniors at a rally against the new law yesterday. Mr. Kennedy and Rep. John D. Dingell, Michigan Democrat, are set to introduce a bill today that would make several major changes to the new Medicare law, including beefing up the new drug benefit by filling in the measure's coverage gap.

CBO Director Douglas Holtz-Eakin yesterday estimated that the new Medicare prescription-drug law will cost more than $1 trillion in its second decade, from 2014 to 2023, and could soar to $2 trillion during that period if Congress revisits the new law and fills in the coverage gaps -- an idea he said has been "widely discussed as a possible future for the bill."

The CBO director said it is very difficult to estimate future costs because it is impossible to know exactly what will happen but said it is "highly unlikely that we'll end up on the course we've set."

If Congress makes no policy changes to the new law, the one-year cost of the prescription-drug benefit in 2023 will be $190 billion, Mr. Holtz-Eakin said.