Burlington, VT - Drawing on his experience in passing health care reform in Vermont, Senate President Pro Tem Peter Welch, candidate for U.S. Congress, proposed a health security initiative that could significantly increase the number of Americans with access to affordable health care.

"Affordable health care is the single most important factor in the ability of our citizens to live healthy, economically secure lives," said Welch. "Every single American needs health care and we can significantly reduce the number of uninsured Americans while containing costs if we are willing to think creatively - just like we've done here in Vermont."

Welch pointed out that Vermont has been a national leader in addressing the problem of access to health care. The state's new Catamount Health program provides a defined benefit to thousands of uninsured Vermonters and enacts significant cost savings initiatives.

In contrast, "under the Bush Administration, more than five million Americans have lost their health insurance and costs have skyrocketed," said Welch. "The nation is going in the wrong direction. The Republican leadership in Congress lacks the political will and has done nothing to right that course."

"But by following Vermont's lead the federal government can reduce the burden on businesses, individuals, states, and local governments while expanding health care for working Americans," said Welch.

To begin moving in the right direction, Welch's health security initiative includes proposals to:

• Help businesses by creating a Small Employers Health Benefits Program (SEHBP) modeled after the successful Federal Employees Health Benefits Program (FEHBP), which would allow small businesses nationwide to join into one risk and purchasing pool to provide affordable health care to their employees;
• Help states by removing federal restrictions that impede state-level health care reform initiatives like Vermont's Catamount Health and improve flexibility;
• Help individuals by lowering the age of Medicare eligibility for seniors and raising the age of Medicaid coverage to include young adults; and
• Help tax payers by explicitly requiring Medicare to negotiate bulk discounts with big drug companies as part of the Medicare Part D prescription drug program.

"The answer to health care reform put forward by the Republicans controlling Washington is health savings accounts. They simply tell those who are sick or without savings 'you're on your own.' That's unacceptable to me," added Welch.

"We are all stronger and better off when we are all in it together."

Small Employers Health Benefits Program Act

The current Federal Employees Health Benefits Program has successfully provided extensive benefit choices at affordable prices to federal employees and members of Congress. By pooling small businesses across America into one risk purchasing pool like FEHBP, the SEHBP program would allow employers of up to 100 employees (and to larger employers by waiver) to benefit from group purchasing power and streamline administrative costs.

Welch says 98 percent of the Vermont businesses could be eligible for the new program, comprising more than two thirds of the state's private sector workforce (Vermont Department of Labor).

The program would also provide tax credits to employers who contribute above 60 percent of their employees' premiums. SEHBP would be covered by state consumer protection laws and standards.

Reducing federal hurdles for state-level reforms

In response to his own experience passing Catamount Health this year, Welch believes the federal government could make it easier for state-based initiatives. Welch noted that the Employee Retirement Income Security Act (ERISA) was an impediment to Vermont's efforts and that state reforms are often challenged in court because of ERISA.

"For states like Vermont to be successful in delivering more health care for less costs, the federal government must provide flexibility to states," said Welch.

Welch said he would introduce legislation to cut federal restrictions that prevent states from adopting creative health care approaches and promote other "creative federalism" initiatives. This flexibility would allow states to consider establishing their own self-insurance program.

Medicare and Medicaid reform

Welch believes Medicaid eligibility should be extended from children to young adults up to age 24 and that Medicare eligibility should begin at age 60.

"Covering young people until age 24 through Medicaid will help students and small employers. Allowing earlier entry into Medicare builds on a successful program with proven administrative efficiencies," Welch said.

Reducing the cost of prescription drugs

Finally, Welch believes the federal government must work to reduce the cost of prescription drugs.

Last December, Welch called for reforming the Medicare Part D legislation to explicitly require using the purchasing power of 42 million seniors enrolled in Medicare to negotiate lower drug prices. The law currently prohibits this negotiation.

Drug prices offered by Medicare drug plans are over 80 percent higher than prices negotiated for federal agencies and the Department of Veterans Affairs. This program has ballooned to cost taxpayers more than $720 billion over the next 10 years, a cost that could be significantly reduced had Congress required negotiations for lower drug prices, argued Welch.

For example, the average cost of the heartburn medication Protinix for Part D is $113 per month, compared to $21 when negotiation by the federal government. Medicare plans average 84 percent higher than federally negotiated prices.

As President Pro Tem, Welch oversaw several state-level initiatives to achieve more affordable prescription drugs.

Welch's first plank of economic security was raising the federal minimum wage to Vermont's wage of $7.25 to help lift all full-time workers out of poverty.