Don’t Mess with Prescription Drug Program, Budget Director Says
August 1, 2008 - 5:42 PMWhite House Budget Director Jim Nussle doesn’t think Democrats in Congress should tinker with Medicare Part D – the prescription drug benefit for seniors – even thought the money needed to cover projected recipients over the next 75 years is $8 trillion short.
Nussle told CNSNews.com in a recent interview that he sees Part D as a positive program because the actual annual cost of the program is about $230 billion less than its projected cost.
“It has not had the kind of projected cost that many had thought it would when it was first enacted, so actually that has been generally some very positive news and provided a good benefit for seniors who needed to have prescription drugs as part of a modern health benefit under Medicare,” Nussle said.
According to a Government Accountability Office (GAO) report issued in early June, prescription drug benefits for seniors in Medicare Part D will exceed available revenues by $8 trillion over the next 75 years.
Nussle said although he believes Medicare Part D is successful, more attention needs to be focused on the long-term costs of all entitlement programs – which are growing out of control – Medicare as well as Social Security.
“This is true across the board when it comes to now about two-thirds of the budget,” Nussle said. “This is probably one of the more disappointing parts of what Congress is basically not doing. (It) bodes very poorly for our ability as a country to deal with some of these entitlements.”
Some in Congress, led by Rep. Henry Waxman (D-Calif.) want to change the Part D program – not by addressing long-term liabilities and projected deficits, but by tinkering with the role that private insurers play in providing service.
“The Medicare drug benefit is providing real help to seniors and the disabled, and it’s going to be part of our healthcare landscape for years to come,” Waxman said at a recent hearing.
“The key question for us is how we can fix the program so that more of the benefit goes to seniors and the disabled and less winds up in the pockets of the drug companies and insurers,” he added.
But the committee’s ranking Republican, Rep. Tom Davis (Va.), said that tinkering with Part D is an unnecessary political move. Instead, overall reform of Medicare Part A, Medicaid, and Social Security would be better uses of time, he said.
“Part D works. It comes in under cost estimates,” Davis’s press secretary, Brian McNichol, told CNSNews.com. “The reason that we are holding hearings on Part D is entirely to do with partisan politics and nothing to do with what the real problems are.”
According to the GAO report, the unfunded liability, or excess spending over revenue, is $12 trillion for Medicare Part A, $13 trillion for Medicare Part B, and $7 trillion for Social Security, as well as the $8 trillion for Part D.
When asked if Davis sees the $8 trillion in unfunded liabilities as a problem, McNichol said, “It’s a huge problem … and (Congressman Davis) is getting serious about it now because there’s a chance to do something about it. None of the options are going to be popular. “Every one of the options is horrible, but if not now, when, you know?”
McNichol said that his boss thinks it is time “to have some adult conversations” about Social Security, Medicare and Medicaid.
Nussle, meanwhile, underscored the need for Congress to make some “tough choices” about the future of social programs.
“Without meaningful changes to Social Security, Medicare, and Medicaid, these three programs are likely to exert unsustainable pressure on federal spending over the next several decades and leave policymakers with bad choices: higher taxes, benefit cuts, or increased debt.”
He added: “I wish Congress would listen to the GAO.”