Medicare drug costs lower than expected

WASHINGTON (Reuters) – The U.S. government’s net costs for
Medicare prescription drug benefits are expected to total $30.5
billion in 2006, down from a previous estimate of $38.1
billion, officials said on Thursday.

The costs are lower than projections because competition
between private drug plans has led to lower prices, more use of
cheaper generic drugs and other savings measures, the Centers
for Medicare and Medicaid Services said in a statement.

The government’s 10-year projected cost of the drug
coverage also was lowered to $678 billion from an earlier
estimate of $737 billion, CMS said.

“Costs are going down even as enrollment is going up,”
Health and Human Services Secretary Mike Leavitt said in a
statement. “This is good news for seniors, taxpayers and the
Medicare program.”

The Medicare drug benefits that started last month have
been controversial with both Democrats and Republicans. Many
say the price is too high.

Thousands of seniors have had trouble getting their
prescriptions filled under the program. Medicare officials say
they are working to fix the glitches.