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Medicare plan costs ordered withheld

Specialist told his colleagues of getting threats of dismissal

WASHINGTON -- The government's top specialist on Medicare costs told colleagues he was warned that he would be fired if he told key lawmakers about a series of Bush administration cost estimates that could have torpedoed congressional passage of the White House-backed Medicare prescription-drug plan.

When the House of Representatives passed the controversial benefit by five votes last November, the White House was embracing an estimate by the Congressional Budget Office that it would cost $395 billion in the first 10 years.

But for months the administration's own analysts in the Centers for Medicare and Medicaid Services had concluded repeatedly that the drug benefit could cost upward of $100 billion more.

Withholding the higher cost projections was important because the White House was facing a revolt from 13 conservative House Republicans who had vowed to vote against the Medicare drug bill if it cost more than $400 billion.

Representative Sue Myrick of North Carolina, one of the 13, said she was "very upset" when she learned of the higher estimate. "I think a lot of people probably would have reconsidered [voting for the bill] because we said that $400 billion was our top of the line," Myrick said.

Five months before the November House vote, the government's chief Medicare actuary had estimated that a similar plan the Senate was considering would cost $551 billion over 10 years. Two months after Congress approved the new benefit, the White House budget director, Joshua Bolten, disclosed that he expected it to cost $534 billion.

Richard S. Foster, the chief actuary for the Centers for Medicare and Medicaid Services, which produced the $551 billion estimate, told colleagues last June that he would be fired if he revealed numbers relating to the higher estimate to lawmakers.

"This whole episode which has now gone on for three weeks has been pretty nightmarish," Foster wrote in an e-mail to some of his colleagues June 26, just before the first congressional vote on the drug bill. "I'm perhaps no longer in grave danger of being fired, but there remains a strong likelihood that I will have to resign in protest of the withholding of important technical information from key policy makers for political reasons."

Foster did not quit, but congressional staffers and lawmakers who worked on the bill said he no longer was permitted to answer important questions about the bill's cost. Cybele Bjorklund, the Democratic staff director for the House Ways and Means health subcommittee, which worked on the drug benefit, said Thomas A. Scully -- then the director of the Medicare office -- told her he ordered Foster to withhold information and that Foster would be fired for insubordination if he disobeyed.

Health and Human Services Department officials turned down repeated requests to interview Foster. The Medicare office falls under the control of HHS.

In an interview, Scully, a former health-industry lobbyist deeply involved in the administration's campaign to pass the drug benefit, denied Bjorklund's assertion that he had threatened to fire Foster. He said he curbed Foster on only one specific request, made by Democrats on the eve of the first House vote in June, because he felt they would use the cost estimates to disrupt the debate.

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