Medicare Act costs swelling

The cost of implementing the US Medicare Act - which for the first time provides a prescription drug benefit for the elderly and disabled - is rising fast and represents a 'cave-in' to the drug industry by the US government.

This is the view of Democratic Presidential candidate John Kerry, delivered in response to a new US Department of Health and Human Services report raising the estimated cost of implementing to $534 billion (€424bn) for 2004-2013.

While the Act was passing through Congress, the Congressional Budget Office had put the cost at $395 billion.

The HHS warns that even its revised figure is not wholly reliable, as the Act makes significant changes to Medicare's already complex entitlement programme, with a number of new private-sector elements to take into account. The difference of $139 billion is about 2.1 per cent of the projected $6,500 billion in total Medicare and Medicare spending over the period, it adds.

Kerry has accused the Bush Administration of kowtowing to "the powerful interests of the drug companies of America," and lining the pockets of people who contributed to their campaign.