By Tom Curry National affairs writer
msnbc.com
updated 12/3/2009 10:17:13 AM ET 2009-12-03T15:17:13

Claim: Republicans who say insurance reform is too costly voted to increase Medicare spending in 2003.

When Medicare was launched in 1965, it did not cover prescription drugs costs. In 2003 Congress created a Medicare prescription drug benefit. "This bill provides all beneficiaries, seniors and the disabled, with voluntary prescription drug coverage for the first time in almost 40 years," said Sen. Orrin Hatch, R- Utah, during the Senate debate. "Will a prescription drug benefit that we have promised our seniors for 38 years become law or become a victim to the political agenda of a partisan minority?" asked Sen. Mitch McConnell, R- Ky. "Incredibly, some on the Democratic side plan to kill this Medicare drug benefit through a filibuster, or use any other way they can think of to defeat the will of the majority," he said. The Congressional Budget Office estimated in 2003 that the new drug benefit would add nearly $394 billion to deficits from 2004 to 2013.

Fact or fiction?
Fact. At a time when the government is facing extraordinarily big future deficits, many Republicans oppose the Democrats' insurance reform due to its large costs. On Nov. 21, 39 Republican senators voted against moving ahead on the Democrats' bill. Twenty-two of those 39 GOP senators had voted in 2003 to create the Medicare prescription drug benefit. That benefit costs about $50 billion a year, a cost that will increase as more people reach age 65. However, the cost calculation isn't a simple matter. A 2007 research paper by RAND Corporation researchers Baoping Shang and Dana Goldman found that a $1 increase in prescription drug spending was associated with a $2.06 reduction in Medicare spending. Prescription drugs help avoid surgery and other invasive procedures, Shang and Goldman said. "Prescription drugs can improve health outcomes, reduce illness, and, thus, reduce the demand for medical care," they said.


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