Perspective               

President Bush's Medicare Budget Inadequate

President Bush recently announced that he wants to spend $190 billion over the next 10 years to overhaul Medicare. His $190 billion budget includes $77 billion over 10 years for a low-income prescription drug benefit, $4 billion over the next three years for Medicare HMOs, the addition of a new prescription drug discount card program, and two new Medicare supplemental insurance plans. This Medicare budget proposal raises serious concerns:

Bush's prescription drug plan would only benefit people with low-incomes, and would provide no drug coverage for most people with Medicare. And the creation of two new standardized Medicare supplemental insurance plans to cover prescription drugs will probably not benefit many people with Medicare either. The three supplemental insurance plans that now cover prescriptions are so expensive that only about 8 percent people with Medicare choose them.

In addition, giving Medicare HMOs $4 billion over the next three years will not guarantee that they will stay in the Medicare program or that they will lower premiums or provide more benefits. For example, after the government gave Medicare HMOs nearly $1 billion for 2001, only 5 percent of people in Medicare HMOs saw their premiums or copays decrease.

The fact is, the President's proposal reduces the Medicare budget. The Congressional Budget Office has predicted Medicare's spending will double in the next 10 years, for a total cost of $3.3 trillion dollars. But President Bush's budget provides only $3 trillion for Medicare spending-or $300 billion less-over the next ten years. It is unrealistic to think that Medicare spending will decrease given the rising costs of health care, and the influx of baby boomers into the Medicare program.

 

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