That new drug law would provide a sizable net benefit to retirees and older workers without existing coverage, even if Congress immediately funded it through higher Medicare payroll taxes.Workers born before 1965—baby boomers and current retirees—would receive a net gain of about $20,000 per capita. Younger workers and all future generations, however, would suffer net losses of between $2,500 and $4,000 per capita. Furthermore, failure to include meaningful Medicare reforms in the drug program may cause steeper cost escalations, diluting its benefits.
Congress should revisit the Medicare prescription drug program and insist on significant market‐based reforms, not merely an ever‐expanding array of benefits.
