The head of the U.S. Medicare program Tuesday said that newly released estimates on beneficiaries’ out-of-pocket spending on services covered by Medicare are being taken out of context.

The figures indicate that out-of-pocket costs will consume an ever-larger share of retirement income. However, “It is misleading to say beneficiaries will be worse off,” Mark McClellan told the U.S. Senate Finance Committee.

The data in chart form, which the Bush administration chose not to publish as part of the annual Medicare trustees’ report last March, was released to Democrat Rep. Pete Stark of California in August, and parts were published in a front-page story in Tuesday’s editions of the newspaper USA Today.

It shows that Medicare premiums, deductibles, co-payments, and other out-of-pocket costs will consume 37.2 percent of the average Medicare beneficiaries’ Social Security check in 2006, the first year of the new drug benefit, rising to 45.2 percent in 2016.

By 2026, with no changes, Medicare costs will consume more than half of the average Social Security benefit.

Democratic Presidential Candidate Sen. John Kerry of Massachusetts was touting the new numbers Tuesday during campaign events in the Midwest. Kerry charged that the new Medicare law, which he opposed, will drive costs up for Medicare beneficiaries.

McClellan, however, said that Medicare costs will go up because Medicare will begin covering services - particularly prescription drugs - for which many beneficiaries formerly had to pay the full cost. “They may have co-pays, but they will be a lot better off than if they were paying it all themselves,” he said.

An aide to Stark, however, said that many beneficiaries with retiree coverage from their former employers will be worse off - because the Medicare benefit will be less generous, and because last year’s law, which Stark opposed, does little to try to hold down the cost of medical services.

“This is what happens when you pass a bill with no cost-containment,” the Stark aide said.

Meanwhile, Democrats at the Finance hearing said they remain concerned about the way the new law is being implemented, particularly parts of rules proposed by the Bush administration earlier this summer.

“There are a lot of holes here, a lot of gaps,” said Max Baucus of Montana, the panel’s top Democrat.

Baucus said he is most concerned about whether the Bush administration will make sure private health plans serve rural as well as urban and suburban areas, and whether employers will be able to reduce retiree benefits but still claim subsidies provided in the bill in an effort to maintain that coverage.

“I voted for the new Medicare law,” said Baucus. “But if the law is not implemented fairly, I will not continue to support it.”