Medicare drug change would cost $3.4 bln: CBO

Reuters
Medicare drug change would cost $3.4 bln: CBO

WASHINGTON (Reuters) - Extending a May 15 deadline for senior citizens to sign up for a new U.S. prescription drug insurance plan would cost the government $100 million this year and $3.4 billion over 10 years, the Congressional Budget Office said on Monday.

Democrats in Congress have been pushing for either extending next week's deadline to the end of the year, or for waiving penalties for seniors who miss the deadline.

On March 15, President Bush rejected an extension saying, "There's got to be a fixed time for people to sign up" for the new program, which already is estimated to cost $724 billion over 10 years.

White House spokesman Ken Lisaius, traveling with the president in Fort Lauderdale on Tuesday, said Bush's position hadn't changed.

The nonpartisan CBO also estimated that about 10 million Medicare beneficiaries who are eligible for the prescription drug program this year will instead enroll over the next three years.

The agency also estimated that about 1 million of those beneficiaries would enroll this year if the deadline was extended to December 31.

CBO said the revenue loss mostly would be related to late-enrollment penalties that would not be collected.

The Medicare drug program was launched in January for 42 million elderly or disabled Americans who are Medicare beneficiaries.

Enrollment got off to a rocky start late last year, with many pharmacies unprepared and many elderly people confused by the dozens of plans being offered.

So far, more than 30 million people are receiving coverage under the Medicare drug program. Of those, about 8.1 million have signed up voluntarily for the new program and the rest transferred from other programs or have coverage through former jobs.

If the May 15 deadline is not extended, those who were eligible and enrolled late can sign up again between November 15 and December 31, but would face a permanent penalty fee.

Republicans in Congress recently have been touting the success of the new drug insurance program, saying that early problems have been ironed out and seniors are happy with their lower drug costs.

Families USA, a nonprofit consumer health-care group, is set to release a report on Tuesday that says the new Medicare prescription drug plan is failing to reach four out of five low-income seniors.