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aphttp://news.yahoo.com/s/nm/20071015/hl_nm/medicare_drugs_dc_3 Report critical of Medicare drug plan costs
By Lisa Richwine Mon Oct 15, 12:37 PM ET
WASHINGTON (Reuters) -Taxpayers and Medicare patients could have saved almost $15 billion in 2007 if private health insurers had cut expenses for prescription drug coverage and negotiated bigger discounts, a report from Democratic staff of a House of Representatives panel said on Monday.
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"The cost and pricing data obtained by the committee reveal that use of private insurers to deliver Medicare drug coverage is driving up costs and producing only limited savings on drug prices," the report said.
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The report said administrative expenses, sales costs and profits of private insurers offering Medicare drug plans are almost six times higher than the administrative costs of traditional Medicare coverage, costing almost $5 billion or about $180 per beneficiary in 2007.
The insurers' profits will account for $1 billion, the report said.
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When a Republican-led Congress created the Medicare drug coverage in 2003, supporters said using private insurers would promote competition and cost savings. The benefits took effect in 2006.
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