Wednesday, July 07, 2004

Sticker Shock

Today's New York Times is reporting that an internal investigation by Dara Corrigan, the acting principal deputy inspector general for the Department of Health and Human Services, confirms that the top Medicare official, Thomas A. Scully, threatened to fire the program's chief actuary, Richard S. Foster, "if he told Congress that drug benefits would cost much more than the White House acknowledged."

"Mr. Foster had estimated that the Medicare legislation would cost $500 billion to $600 billion over 10 years. The White House told Congress the cost would not exceed $400 billion." Since the bill was passed, after extended and contentious sessions and by a narrow margin in both houses, the real costs have surfaced, and they are consistent with Mr. Foster's predictions. Many lawmakers, from both parties, have said that they would not have voted in favor of the Medicare bill had they known the real costs.

Ms. Corrigan's official statement went as follows, "Our investigation revealed that the Centers for Medicare and Medicaid Services did not provide information requested by Congressional members and staff, and that Scully threatened to sanction Foster if he disclosed unauthorized information."

Mr. Scully, for his part, "denied threatening Mr. Foster but had acknowledged having told him to withhold the information from Congress."

Mr. Scully, who resigned in December, has since "registered as a lobbyist for major drug companies, including Abbott Laboratories and Aventis; for Caremark Rx, a pharmacy benefit manager; and for the American Chiropractic Association and the American College of Gastroenterology, among other clients. All are affected by the new Medicare law, which Mr. Scully helped write," and which he prevented Congress from learning about the full costs. The Medicare legislation has since been criticized as unduly expensive, with enormous benefits passing to drug companies, which in turn considerably reduce the benefits passed on to actual Medicare recipients.

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