Medicare’s Budget Problems: Part Dby Denise Early on Jul. 26, 2011, under Health
In 2010, Part D drug coverage made up 13.4% of the Medicare budget, or $68 billion. So even with seniors paying premiums for their Part D plans that ranged from $1o to $90 per month, Medicare still paid out $68 billion in 2010 to subsidize their drug costs.
Bruce Bartlett, who worked in the Treasury Department under Bill Clinton, wrote about the budget busting consequences of Part D in Forbes magazine in 2009. Excerpts from his column are provided below:
The human capacity for self-delusion never ceases to amaze me, so it shouldn’t surprise me that so many Republicans seem to genuinely believe that they are the party of fiscal responsibility. Perhaps at one time they were, but those days are long gone.
This fact became blindingly obvious to me …. when a Republican president and a Republican Congress enacted the Medicare drug benefit, which former U.S. Comptroller General David Walker has called “the most fiscally irresponsible piece of legislation since the 1960s.”
Recall the situation in 2003. The Bush administration was already projecting the largest deficit in American history–$475 billion in fiscal year 2004, according to the July 2003 mid-session budget review. But a big election was coming up that Bush and his party were desperately fearful of losing. So they decided to win it by buying the votes of America’s seniors by giving them an expensive new program to pay for their prescription drugs.
Recall, too, that Medicare was already broke in every meaningful sense of the term. According to the 2003 Medicare trustees report, spending for Medicare was projected to rise much more rapidly than the payroll tax as the baby boomers retired. Consequently, the rational thing for Congress to do would have been to find ways of cutting its costs. Instead, Republicans voted to vastly increase them–and the federal deficit–by $395 billion between 2004 and 2013.
Bruce Bartlett was a Democratic appointee. The full Forbes article can be read here.
In the video below, David Walker, Comptroller General under George W Bush, talked about the budget and deficit consequences of the Part D drug program which began in 2006.