Medicare drug benefit to cost $720 billion over first ten yearsThe new Medicare drug benefit will cost a net $720 billion in its first 10 years, over $200 billion more than earlier cost projections indicated, according to new estimates from the Bush administration.
Federal officials said the drug benefit has grown more expensive over time and appears larger because it takes into account a new time frame with 10-full years of drug coverage. The new projection issued Tuesday runs from 2006 to 2015.
Earlier estimates projected more than $500 billion applied to the ten-year period beginning in 2004, two years before the benefit actually begins.
The latest projections were made in connection with President Bush's 2006 budget request.
Figures from Medicare's actuaries, being circulated on Capitol Hill, show that federal spending for Medicare's drug coverage will amount to about $1.2 trillion from fiscal years 2006 to 2015.
Medicare chief Mark McClellan said, in a Wall Street Journal report, that figure does not take into account premiums paid by beneficiaries or payments from states or beneficiaries also in Medicaid, thus reducing net costs.