Bush administration defends Medicare drug program

WASHINGTON Mon Mar 5, 2007 2:12pm EST

A pharmacy is seen at a Wal-Mart in Chicago, September 27, 2006. A prescription drug benefit of the U.S. Medicare program is a ''financially irresponsible'' addition to a system that was already on course for possible bankruptcy, the U.S. government's top accountant said in an interview on Sunday. REUTERS/Joshua Lott

A pharmacy is seen at a Wal-Mart in Chicago, September 27, 2006. A prescription drug benefit of the U.S. Medicare program is a ''financially irresponsible'' addition to a system that was already on course for possible bankruptcy, the U.S. government's top accountant said in an interview on Sunday.

Credit: Reuters/Joshua Lott

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WASHINGTON (Reuters) - The Bush administration defended the Medicare prescription drug benefit program on Monday as being cheaper than initially forecast, challenging the U.S. government's top accountant who called it "fiscally irresponsible."

"Over 90 percent (of Medicare recipients) are covered and the program costs are much less than what experts predicted when the bill was enacted in 2004," said Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, a unit of the Health and Human Services Department.

Medicare is the federal health insurance program covering 42 million elderly and disabled Americans. The program was expanded last year to include prescription drugs, and the Kaiser Family Foundation said the estimated cost was $31 billion in 2006.

"Medicare was the only significant health insurance program in America without this benefit," Norwalk said in a statement. "Adding a drug benefit was a major step in getting Medicare's benefits in line with today's medical care."

Her defense came as U.S. Comptroller General David Walker said the new benefit would require $8 trillion to be invested at current Treasury rates to cover the gap between what Medicare will likely take in and what it is expected to cost over the next 75 years.

That $8 trillion cost was "not disclosed, not discussed before the bill was enacted into law," Walker told the Federation of American Hospitals on Monday.

On CBS's 60 Minutes program on Sunday night, Walker called the prescription drug program "probably the most fiscally irresponsible piece of legislation since the 1960s ... because we promise way more than we can afford to keep."

Democrats who now control Congress have criticized the Medicare prescription drug plan, which a Republican-led Congress passed in 2003, because it barred the government from negotiating prices.

The House of Representatives has approved a bill to let the government negotiate lower drug prices instead of leaving it to private companies to secure discounts. The Senate has not yet acted, and the Bush administration has vowed to veto it.

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