Democrats Continue Criticism of New Medicare Cost Estimate

During a Senate Budget Committee hearing Thursday, White House Office of Management and Budget Director Joshua Bolten addressed lawmakers' concerns about President Bush's fiscal year 2005 budget proposal, including higher-than-anticipated costs for the new Medicare law (HR 1), CongressDaily reports (Cohn, CongressDaily, 2/5). Administration officials have said that according to the OMB, the Medicare legislation will cost $534 billion over the next 10 years, $134 billion more than estimated by the Congressional Budget Office. The FY 2005 budget proposal Bush released Monday acknowledges the higher estimate (California Healthline, 2/4). At the hearing Wednesday, Sen. Jeff Sessions (R-Ala.) said he is "very, very disappointed" in the new budget estimate and told Bolten that he would collaborate with other lawmakers, including Budget Chair Don Nickles (R-Okla.) to lower the law's cost. Sen. Kent Conrad (D-N.D.) added that he is "disappointed" that the administration did not "send up a very clear signal" before the Medicare bill's passage that the cost could rise above $400 billion. Bolten told lawmakers that despite the higher estimate, the Bush administration and Congress "should still operate under the assumption" that the law will cost $395 billion over 10 years, CongressDaily reports (Cohn, CongressDaily, 2/5).

An "unexpectedly large number" of health industry groups have signed up to offer the Medicare prescription drug discount cards this spring, meaning that beneficiaries face "a bewildering array" of choices when signing up for the program, the New York Times reports. More than 100 companies -- including pharmacy benefit managers like Medco Health Solutions and AdvancePCS and insurers like UnitedHealthcare and Aetna -- met the deadline last week to apply to sponsor the new cards. CMS officials have said the cards will provide 10% to 25% discounts off the retail prices of many prescription drugs. However, because each drug card sponsor will offer a different mix of discounts based on prices they negotiate with pharmaceutical companies, beneficiaries likely will face "complicated choices" when selecting a card, the Times reports. Further, some beneficiaries might find better coverage with prescription drug assistance drug programs already established in various states or by purchasing medications from Canada, where they are sometimes cheaper. "It's going to be near impossible to make an informed choice," Diane Archer, a policy expert at the Medicare Rights Center, said. John Rother, director of policy and legislative affairs for AARP, said, "We're talking about people who are vulnerable economically and who may be taking quite a few medications. This will be complicated. We need to get clarity, guidance from the administration." Leslie Norwalk, acting deputy administrator of CMS, said that agency officials are working to disseminate education material, adding, "It's critical that we educate as many Medicare beneficiaries as we can possibly reach" (Freudenheim, New York Times, 2/6).

Some Democrats on Thursday continued to criticize the Bush administration's education campaign for the new Medicare law, calling for the General Accounting Office and the HHS Office of Inspector General to investigate whether it is "inappropriately political," CongressDaily reports (Rovner/Heil, CongressDaily, 2/5). The administration is running $12.6 million worth of advertisements for the Medicare law and has purchased $9.5 million worth of 30-second television spots to educate beneficiaries about changes to Medicare. The spots, which will appear on network and cable television stations nationwide through March, address some criticisms of the law and will be paid for out of $1 billion in federal funds set aside to implement changes to the program (California Healthline, 2/5). Sen. Frank Lautenberg (D-N.J) and six other Senate and House Democrats have said that the television ad is "so simplified that it does not provide any meaningful information to beneficiaries," CongressDaily reports. They are also requesting that GAO investigate why print ads are running in newspapers that Medicare beneficiaries are unlikely to read, such as Roll Call, as well as the appropriateness of hiring Virginia-based advertising firm National Media -- which is handling some aspects of Bush's re-election campaign -- for the ads. Sen. Edward Kennedy (D-Mass.) said the ads are "nothing more than propaganda for the Bush re-election campaign, using $23 million of senior citizens' own money." Separately, Rep. Rosa DeLauro (D-Conn.) and five House Democrats are asking the OIG to investigate whether the bidding process for the ads was competitive, whether the ads follow the standard public-service announcement format and why the campaign is running two years before the Medicare prescription drug benefit is set to begin. Senate Finance Chair Chuck Grassley (R-Iowa) said, "You've got to get the information out," adding that the campaign is important because seniors "must decide soon whether they will participate in the new program," CongressDaily reports (Rovner/Heil, CongressDaily, 2/5).

House Minority Leader Nancy Pelosi (D-Calif.) on Thursday said that she is "satisfied" with the "informal" probe launched in December by the House Committee on Standards of Official Conduct to investigate bribery accusations related to the November House vote on the Medicare law (CongressDaily, 2/5). In December, retiring Rep. Nick Smith (R-Mich.) said that unnamed Republican leaders promised to donate $100,000 to his son's congressional race in exchange for his support on the Medicare bill. However, Smith later backed away from that comment, saying that suggestions he was bribed are "technically incorrect." He added that some Republican lawmakers had said they would oppose his son's campaign if he did not vote for the Medicare legislation, but they did not offer to donate any money to the campaign as had been previously reported. Smith voted against the Medicare legislation. In a Jan. 20 letter to House Speaker Dennis Hastert (R-Ill.), House Minority Whip Steny Hoyer (D-Md.) called for an ethics investigation into the allegations. On Wednesday, Committee Chair Joel Hefley (R-Colo.) and Rep. Alan Mollohan (D-W.Va.) confirmed that they had independently launched an investigation into the matter on Dec. 8 (California Healthline, 2/5). During the informal phase of the ethics inquiry, lawmakers determine whether there is enough information to recommend that the full committee launch a formal investigation into the matter, the Detroit News reports (Zagaroli, Detroit News, 2/6). Pelosi questioned why the committee did not acknowledge its probe earlier (AP/Detroit Free Press, 2/5). Hoyer said he is pleased that the committee is conducting the fact-finding inquiry (Eilperin, Washington Post, 2/6). He added, "If it is true that there is the possibility of criminal and serious violations ... I hope that this matter will be fully investigated" (AP/Detroit Free Press, 2/5).