 |
 |
Medicare drug coverage to cost more than thought HEALTH: New figures are about one-third higher than projections made last May. February 24, 2001 By ROBERT PEAR The New York Times WASHINGTON -- The Congressional Budget Office has sharply increased its estimates of spending on prescription drugs for the elderly, revisions that will make it more difficult for Congress to pay for drug benefits under Medicare. The new estimates, about one-third higher than those made last May, reflect new information about drugs that are in the pipeline and likely to come into use in the next decade. The budget office, a nonpartisan arm of Congress, presented its new estimates to congressional aides Thursday and Friday. Prescription drugs were hotly debated in campaigns for the White House and Congress last year. President George W. Bush promised drug benefits for Medicare as part of an effort to overhaul the program, which provides care to people who are elderly or disabled. A Republican analyzing proposals for Medicare drug benefits said, "Everything just got a lot more expensive." A Democrat said some of his party colleagues on Capitol Hill were "in shock" over the new numbers. One-third of the 39 million Medicare beneficiaries have no insurance to pay for prescription drugs outside the hospital. The number of beneficiaries is expected to reach 47 million in 2011, just as the first baby boomers turn 65. In May 2000, the budget office predicted that spending from all sources on prescription drugs for the elderly would total $1.1 trillion in the decade from 2001 to 2010. Updating its estimates this week, the budget office said such spending would total nearly $1.5 trillion from 2002 to 2011. The difference between the old and new estimates widens each year. The budget office now says that drug spending in 2001 for people on Medicare will total $70.6 billion, which is 7 percent more than the earlier estimate for the same year. The new estimate for 2010 - $205 billion - is 23 percent higher than the previous figure for that year. Economists said that Medicare coverage of prescription drugs would create some additional demand, as the government would help purchase drugs for millions of people who now have no insurance to cover such costs. But federal officials have said they will seek ways to restrain costs and to prevent excessive or inappropriate use of drugs. Last year the budget office predicted that drug spending for the elderly would rise an average of 11 percent a year during the next decade. Now, it says, the growth will average 12 percent to 13 percent a year. These numbers have major implications for Congress as it tries to devise drug benefits for the elderly and people with disabilities. If Congress decided to spend a specific amount on Medicare drug coverage - say, $40 billion in the next five years - the benefits would seem less generous because the money would cover less of the costs actually incurred by the elderly. Conversely, the government would have to spend more, or charge beneficiaries more, for coverage deemed adequate by the elderly. As premiums rise, economists say, fewer people will enroll, and those who do will expect to have high drug expenses. In the campaign, Bush said the government should pay any drug costs exceeding $6,000 a year for a Medicare beneficiary. Under the new estimates, more beneficiaries would incur such costs and would therefore qualify for "catastrophic coverage." Congressional aides said the new estimates reflected more up-to-date information about drug spending in recent years. The figures on recent drug spending were derived from government surveys of Medicare beneficiaries and from commercial sources of data like IMS Health of Westport, Conn., which collects data from pharmacies across the country. The CBO said spending on prescription drugs averaged $1,525 for each Medicare beneficiary in 2000, and it estimated that the average would triple by 2011, reflecting higher prices and the greater use of prescription drugs by the elderly. Drug companies are feverishly developing drugs to prevent, treat or cure ailments of the elderly, including heart disease, cancer, stroke, Alzheimer's, Parkinson's disease, osteoporosis and arthritis. The new drugs often enter the market at prices much higher than the prices charged for the drugs they replace. A few drug products now cost more than $10,000 a year, and the number may grow as scientists exploit genetics to tailor drugs to the needs of individual patients. http://www.ocregister.com/health/24nydrugscci.shtml ************