WASHINGTON -- The Concord Coalition warned today that with the budget plunging back into deficit, Congress should not rush to enact a Medicare prescription drug benefit in the absence of comprehensive programmatic reform. Doing so would greatly increase the already unsustainable long-term cost of the program while avoiding all of the hard choices needed to make the program affordable for future taxpayers.
“Congress needs to shake off its surplus hangover and figure out how to pay for the entitlement promises that already exist before it creates new ones. Unfortunately, in the bipartisan election year rush to enact a prescription drug benefit, Medicare's existing long-term cost challenge has vanished from the national agenda,” said Robert L. Bixby, Executive Director of The Concord Coalition.
From a fiscal point of view this is a particularly bad time to move ahead with a stand-alone drug benefit. The budget is in deficit, the 10-year projected non-Social Security surpluses have evaporated, Medicare cost growth has accelerated, and the Trustees have made a dramatic upward revision in their long-term cost projections. Medicare spending is already scheduled to double as a share of the economy by 2035 and triple by 2075. Meanwhile, the general revenue subsidy to the program will rise from 22 to 70 percent of total costs.
The Concord Coalition agrees that adding prescription drug coverage to Medicare is a worthy goal. Drugs are an integral part of modern medicine and often the most cost effective therapeutic alternative. Rising out-of-pocket-costs for drugs are a growing burden for seniors. But policymakers must not lose sight of the fact that just three programs for seniors -- Social Security, Medicare and Medicaid -- are on track to consume at least two-thirds of the budget within 30 years.
“Given the grim outlook for future taxpayers, the prerequisite for a comprehensive drug benefit should be a comprehensive reform of Medicare, including effective cost control. None of the proposals now on the table tackle the hard choices of long-term Medicare reform.” Bixby said.