The Congressional Budget Office reaffirmed its $394 billion, 10-year cost estimate for the Medicare reform law, further muddling a controversy that began when news leaked that the Bush administration may have had a much higher cost estimate of its own during voting on the bill.
After the bill was signed into law, the White House announced that the law's 10-year cost might reach $534 billion.
Subsequently, the CMS actuary disclosed that he was pressured by then-CMS Administrator Tom Scully to withhold from Congress his estimate of the bill's cost, which also significantly exceeded the CBO estimate.
"The (CBO) report underscores that Congress had the true cost estimate for the Medicare prescription drug bill before that vote," Sen. Charles Grassley (R-Iowa) said.
Detailing its analysis, the CBO said drug benefits contained in the legislation would cost $407 billion over 10 years but would raise federal revenue by $7 billion over the same period, for a net cost of $400 billion.
Other elements of the Medicare modernization act would cut federal costs by $13 billion but reduce revenue by $7 billion, for a net savings of $6 billion -- bringing the total 10-year cost of the law to $394 billion.
Read the CBO's detailed descripition of its analysis.