August 10, 2005


Drug Benefit to Cost 14% Less, Medicare Says: Based on bids from private plans seeking to offer the coverage, the premium should average $32.20 a month, the agency reports. (Ricardo Alonso-Zaldivar, August 10, 2005, LA Times)

Medicare announced Tuesday that its new outpatient prescription benefit would cost about 14% less than estimated next year, which means less of a squeeze on seniors' budgets and billions in potential savings for taxpayers.

Nationally, the average monthly premium that beneficiaries will pay when the program takes effect in 2006 is expected to be $32.20, down from an estimated $37.37. Premiums will vary around the country, but officials said they were expected to be lower in California because of the high level of enrollment in Medicare managed-care plans.

The new figures are based on bids from dozens of private health plans vying to offer coverage to more than 42 million elderly and disabled people who are eligible for Medicare's first-ever outpatient drug program. Previous estimates were based on government projections of what drug companies were likely to charge.

The lower estimates were good news not only for Medicare recipients and the U.S. Treasury, but also for President Bush. He made the prescription benefit a centerpiece of his domestic agenda, but the elderly have greeted the plan with skepticism — fearing that it would be too costly to participate in.

Tuesday's announcement may make it easier for administration officials to drum up enthusiasm for the plan.

The figures announced Tuesday by Medicare administrator Mark B. McClellan came as something of a surprise. Until now, most analysts had predicted that the program would be much more expensive than Bush and the Republican-controlled Congress envisioned.

The analysts predictions were inevitably flawed. Those on the Left hate competition and George Bush. Those on the Right hate government more than they believe in competition.

Posted by Orrin Judd at August 10, 2005 9:13 AM

GWB's going to be a hard acy to follow.

Posted by: Genecis at August 10, 2005 2:23 PM

Why not declare martial law and give the president a few more years to finish the job before leaving office? After all he'll have stacked the Supreme Court with mind-numbed robots by then and won't get any objections from that quarter.

Posted by: erp at August 10, 2005 5:56 PM