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<B>Congressman Peter Welch addresses Bennington area seniors Friday about a plan to save nearly $160 billion within Medicare by negotiating prices with drug companies, a practice currently not legal but which he hopes to change through legislation he has introduced. (Neal P. Goswami)</B>
Congressman Peter Welch addresses Bennington area seniors Friday about a plan to save nearly $160 billion within Medicare by negotiating prices with drug
Congressman Peter Welch addresses Bennington area seniors Friday about a plan to save nearly $160 billion within Medicare by negotiating prices with drug companies, a practice currently not legal but which he hopes to change through legislation he has introduced. (Neal P. Goswami)
Saturday February 23, 2013

NEAL P. GOSWAMI

Staff Writer

BENNINGTON -- Congressman Peter Welch outlined a plan to Bennington area seniors on Friday to save nearly $160 billion within Medicare as the government churns toward across-the-board sequester cuts.

Welch, a Democrat serving his fourth term, said Congress can quickly save money and lower prescription drug prices for seniors by simply negotiating prices with drug companies.

"If we did as simple a thing as allow Medicare to do price negotiations, they're buying wholesale let them pay wholesale, do you know how much we'd save? One-hundred fifty-six billion dollars for the Medicare program," Welch told about three dozen seniors at Bennington Project Independence, a nonprofit that offers adult daycare services. "If you buy wholesale, do you think you should pay the retail price or the wholesale price?"

"Buys wholesale but pays retail"

Other government health care programs do negotiate, including the Veterans Administration, which provides health care to the country's servicemen and women, Welch said. But Congress prevented Medicare from doing the same.

"The government and the Medicare program buys wholesale but pays retail. That's because when the prescription drug plan Part D was passed, Congress made it illegal for Medicare to negotiate bulk price discounts," he said.

Welch said he has introduced legislation requiring the Secretary of Health and Human Services to negotiate prescription drug prices on behalf of Medicare Part D beneficiaries. Welch attached an identical provision to health care reform legislation in 2010 but it was removed from the final version.

About 10,000 Americans are entering the Medicare program daily, according to Welch. The cost of health care will continue to rise, he said, and Congress must look at ways of finding savings within Medicare without slashing benefits.

According to Welch, taxpayers fund more than three-fourths the cost of the Medicare Part D drug benefit, which accounted for $62 billion worth of drugs in 2010. He cited one report showing that the top five Medicare Part D insurers charged prices 58 percent higher than the VA for 20 commonly prescribed drugs.

"That's an example of something we could and should do to make Medicare more affordable. If we do that then there's less pressure on Congress to raise your rates," Welch told the seniors.

In separate interview, Welch said he is focusing his efforts on reforming the delivery of health care for reduce costs in the Medicare program. He said major structural changes to the program, like raising the eligibility age, will not be needed if other measures, including his prescription drug changes, are enacted.

"We've got to get savings in health care and Medicare. How that is done is really what's vitally important to me. If it's just slashing benefits and shifting costs onto seniors, no. If it's reforming how we deliver care, allowing us to have a more sustainable health care system, I'll do that," he said.

Contact Neal Goswami at ngoswami@benningtonbanner.com. Follow him on Twitter @NealGoswami