- The Washington Times - Friday, March 8, 2002

An administration official defended President Bush's Medicare proposal in a Senate hearing yesterday, but indicated the White House was flexible and willing to negotiate with lawmakers.

"We're dead serious about doing this," said Thomas A. Scully, administrator of the Centers for Medicare and Medicaid Services, referring to modernizing Medicare and adding a prescription-drug benefit to the program.

He told the Senate Finance Committee the administration was committed to working with Congress to begin enacting reform this year.

Senators, preparing to craft their budget, held the hearing to review various estimates for reforming Medicare and adding a workable prescription-drug benefit component.

The administration has proposed $190 billion over 10 years to modernize Medicare, including $77 billion for a low-income prescription-drug benefit, which would serve as a transition to a more comprehensive Medicare prescription-drug benefit in the future.

The president's plan also includes a Medicare drug discount card under which Medicare would endorse private drug cards, and the card sponsors in turn would negotiate discounts with drug manufacturers, thus lowering drug prices for Medicare beneficiaries.

Mr. Scully said the president's plan provides immediate "short-term steps to get the ball rolling" until a comprehensive Medicare prescription drug benefit is in place. He said while the president is committed to setting up a comprehensive benefit, the effort is a "multiyear project that requires a lot of building blocks."

He also defended the $190 billion estimate as "in the range of being very credible." Several lawmakers have said it is far from enough.

"I think most people would find $190 [billion] is incredibly low, given the need that so many seniors have," Senate Finance Committee Chairman Max Baucus, Montana Democrat, said during the hearing.

Meanwhile, Congressional Budget Office Director Dan L. Crippen told the panel preliminary projections indicated prescription-drug spending would be even more than expected. The CBO estimates that regardless of who pays for it spending for prescription drugs for the Medicare population from 2003 through 2012 will cost roughly $1.8 trillion. This is 21 percent higher than last year's CBO projection for 2002 through 2011.

Senior advocates are pushing for a total of $750 billion for a comprehensive Medicare prescription-drug benefit. William D. Novelli, AARP executive director and chief executive officer, told the panel that Congress should earmark $350 billion and set aside $400 billion in a reserve to use as the comprehensive program is crafted.

Mr. Scully said advocacy groups such as AARP are expected to push for high numbers but administration officials "strongly disagree" with the AARP proposal.

Last year, lawmakers set aside $300 billion for prescription drugs and Medicare reform in the budget resolution. Mr. Baucus pointed out some think even that is too low because the CBO has said premiums at the $300 billion level would be high and many Medicare beneficiaries would not sign up for the program.

Ranking committee member Charles E. Grassley, Iowa Republican, told the panel that, instead of criticizing the president's plan, they should be "looking at our inactions" on the issue. He said the Mr. Bush is "out there on paper" where Congress has failed to pass anything.

Senate Democrats are crafting a comprehensive prescription-drug benefit plan but have not come out with a number yet. Mr. Grassley and a group of senators also are working on a plan to strengthen and improve Medicare, including a comprehensive drug benefit.

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