(Washington, D.C.) – Citizens Against Government Waste (CAGW) today again denounced the Medicare prescription drug benefit in the wake of an explosive cost estimate.  Expenditures are expected to exceed $720 billion over the next 10 years, rising to more than $100 billion a year in 2014.  Just last week CAGW chided Medicare for announcing it would cover impotence drugs when “medically necessary.”

“Medicare must have taken an overdose of Viagra, because the cost of the program has now been enlarged by 80 percent since it was first passed by Congress,” CAGW President Tom Schatz said.

When Congress was debating the law in 2003, several House Republicans refused to support a bill costing more than $400 billion.  In fact, they might not have voted for final passage had they known the real cost was $534 billion.  That figure was revealed by the administration four months after the bill passed by narrow margins in both chambers of Congress, as Medicare’s administrator compelled a subordinate to withhold higher cost estimates, according to the Department of Health and Human Services inspector general.

“Even before the ink dried on the bill, Congress adjusted the cost from $400 billion to $534 billion, now it’s $720 billion,” Schatz continued.  “Medicare officials reassure the public that small measures like Viagra coverage will not significantly affect cost, but the history of Medicare suggests otherwise.”

Part of the cost revision is due to extending the ten-year horizon from 2013 to 2015, thus incorporating more baby boomers into the program.  Still, the annual cost of the benefit is expected to hit $100 billion in 2014, or more than a third of what the Medicare bill originally was projected to cost for the entire first 10 years of the program, ending in 2013.  The ballooning cost of the drug benefit echoes the growth of Medicare itself.  When Medicare was first passed in 1965, it was predicted to cost $26 billion in 2003; the actual cost was $245 billion.

“The overarching lesson of the past 70 years is that the costs of entitlement programs explode out of control in the long run,” Schatz added.  “Instead of fixing a Medicare program already headed toward insolvency, Congress added a massive universal benefit that was not necessary, since 76 percent of seniors already had some form of drug coverage.

“The country is already limping along with a $427 billion budget deficit.  This latest revelation of waste in Washington should be enough to arouse taxpayers to demand that the cost of the Medicare prescription drug benefit be deflated.  Without reform, the Medicare program will needlessly place an enormous burden on our children and grandchildren,” Schatz concluded.

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.