Daily Health Policy Report

Monday, February 10, 2014

Last updated: Mon, Feb 10

KHN Original Reporting & Guest Opinion

Health Reform

Capitol Hill Watch


Health Care Marketplace

State Watch

Editorials and Opinions

KHN Original Reporting & Guest Opinion

Arkansas' Medicaid Experiment, Key To Obamacare Expansion, On Ropes

Kaiser Health News staff writer Phil Galewitz reports: "The Arkansas' experiment, known as the 'private option' marks the first large-scale attempt to enroll Medicaid recipients into the same private health insurance plans that any consumer might buy in the health law's online insurance marketplace. That's different from how Medicaid typically works where enrollees must join state-operated programs or private managed care plans designed exclusively for the poor -- and which pay doctors less, sometimes a lot less. As a result, private option enrollees like Fant will have access to a larger network of doctors and hospitals than is usually available through Medicaid" (Galewitz, 2/10). Read the story and a related Q & A with Arkansas Gov. Mike Beebe.

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Some Middle-Class Families Find Price Of Subsidized Health Coverage 'Awfully High'

Kaiser Health News staff writer Julie Appleby, working in collaboration with USA Today, reports: "The lure used to get uninsured Americans to sign up for health law coverage was the promise of generous premium subsidies. But the promise comes with a catch for almost 3 million people earning between three and four times the federal poverty rate: They may have to pay up to 9.5 percent of their income toward that premium before the subsidy kicks in" (Appleby, 2/10). Read the story.

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Family Planning Clinics In Calif. Squeezed By Health Law

Reporting for Kaiser Health News, in partnership with NPR, KQED’s April Dembosky writes: "An unexpected quirk in the Affordable Care Act has left birth control clinics struggling to balance their budgets in the most unlikely of places: California. Clinics that have long enjoyed state support to run as nonprofits have to rethink how to stay in business" (Dembosky, 2/10). Read the story.

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Political Cartoon: 'The Eyes Have It?'

Kaiser Health News provides a fresh take on health policy developments with "The Eyes Have It?" by Darrin Bell.

And here's today's health policy haiku:


CBO report
Bad labor supply effects!
--Team Haiku, Altarum  

If you have a health policy haiku to share, please send it to us at http://www.kaiserhealthnews.org/ContactUs.aspx and let us know if you want to include your name. Keep in mind that we give extra points if you link back to a KHN original story.

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Health Reform

Obamacare Tweaks Continue Amid Complaints

The government will allow consumers who are unhappy with the plan they chose to make some limited changes and announces options for reporting life changes, such as a marriage or the birth of a child, to update their plan choices, the administration said. It is also looking at requiring insurers to accept third-party payments, such as those made under the Ryan White CARE Act, to help people with HIV/AIDS pay for expensive drugs. Meanwhile, The Washington Post examines the history of Accenture, the contractor hired to fix healthcare.gov, and finds troubled projects and allegations of ethical lapses.

The Washington Post: Administration Will Allow People To Switch Health-Care Plans To A Limited Degree
In a memo distributed Thursday night to insurers, federal health officials said that people may pick a different health plan before the end of March if they are dissatisfied with the one they chose, but only if they stay with the same insurer and generally the same level of coverage. The 14-page memo, obtained by The Washington Post, also says people will be given more freedom and a longer opportunity to get a new health plan if they can prove that HealthCare.gov, the Web site for the new marketplace, displayed inaccurate information about the benefits that a health plan offers (Goldstein, 2/8).

CBS News: Obamacare Rules Tweaked Amid Complaints About Plan Flexibility
To address concerns among some Obamacare enrollees who lost access to their old doctors or found themselves unable to add a new dependent or spouse, President Obama’s administration has tweaked the law’s regulations to provide added flexibility for consumers, CBS News confirms. “We are committed to ensuring that consumers have continuity of coverage if they experience a life circumstance such as a birth of a new child or a marriage,” explained Health and Human Services spokeswoman Joanne Peters. “As of this week, consumers are able to report these life events and change or update their coverage directly through the Marketplace. We continue to work closely with issuers to ensure that consumers are able to use this new functionality to make changes to their coverage” (Miller, 2/8).

Reuters: CMS May Require Obamacare Insurers To Accept Ryan White Payments
The U.S. Centers for Medicare and Medicaid Services (CMS), in an effort to keep insurers from denying coverage to people with HIV/AIDS, may strengthen its position on health plans accepting third-party payments, such as those under the 1990 Ryan White Act. Hundreds of people with HIV/AIDS in Louisiana trying to obtain coverage under President Barack Obama's healthcare reform are in danger of being thrown out of the insurance plan they selected in a dispute over federal subsidies and interpretation of rules about preventing Obamacare fraud, Reuters reported on Saturday. Blue Cross and Blue Shield of Louisiana, the state's largest health insurer, is rejecting checks from a federal program designed to help these patients pay for AIDS drugs and insurance premiums (Begley and Steenhuysen, 2/8).

The Washington Post: Accenture, Hired To Fix HealthCare.gov, Has Troubled Past
Accenture, the contractor urgently tapped to help fix the federal health-insurance Web site, is a favorite of corporate America but has a record that includes troubled projects and allegations of ethical lapses, a review of the consulting giant’s history shows. ... In North Carolina, glitches in an Accenture-configured computer system contributed to massive backlogs for food-stamp recipients, leading the Obama administration last month to threaten to withdraw the state’s food-stamp funding. Federal officials have also on occasion criticized the company’s integrity. The U.S. Postal Service Inspector General’s Office wrote in June that Accenture had “demonstrated an absence of business ethics,” and said that the agency should consider terminating the firm’s more than $200 million in contracts. ... The company denied wrongdoing in the case (Markon and Crites, 2/9).

Politico: ACA Enrollment: Mayors Hold The Key
The road to Obamacare enrollment runs through City Hall. The Obama administration is relying on friendly mayors to coordinate enrollment efforts, circumvent tricky state politics and put a local stamp on the vast federal law. Health and Human Services Secretary Kathleen Sebelius has stood alongside mayors in at least seven cities in the past three weeks as she has taken the sign-up message across the country and rubbed elbows with dozens of other mayors at a recent conference in Washington (Cheney, 2/9). 

Los Angeles Times: Corporate Backing Is Helping Obamacare Go Mainstream
Although many companies are wary of associating with the health law while it remains a political lightning rod, the Affordable Care Act is increasingly entering the mainstream as major corporations, sports teams and others integrate it into their businesses. The development — little-noticed amid the political skirmishing in Washington — may not erase widespread skepticism about the law, which has deepened in recent months, polls show. But as the law becomes embedded in American life, the Republican drive to dismantle Obamacare will almost certainly become more complicated (Levey, 2/8).

Kaiser Health News: Some Middle-Class Families Find Price Of Subsidized Health Coverage ‘Awfully High’
The lure used to get uninsured Americans to sign up for health law coverage was the promise of generous premium subsidies. But the promise comes with a catch for almost 3 million people earning between three and four times the federal poverty rate: They may have to pay up to 9.5 percent of their income toward that premium before the subsidy kicks in (Appleby, 2/10). 

Kaiser Health News: Family Planning Clinics In Calif. Squeezed By Health Law
An unexpected quirk in the Affordable Care Act has left birth control clinics struggling to balance their budgets in the most unlikely of places: California. Clinics that have long enjoyed state support to run as nonprofits have to rethink how to stay in business (Dembosky, 2/10).

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Budget Issues Begin To Cloud Outlook For State Exchanges

The Associated Press reports that questions are emerging about how these online marketplaces will operate under the current financing model. Also, the latest news on exchanges from California, Oregon and Florida.

The Associated Press/Wall Street Journal: Budget Model Uncertain For State Health Exchanges
The 14 states running their own health insurance marketplaces had all their startup costs footed by the federal government, but they're supposed to pay for themselves starting next year under the federal health care reform law. In several states, it's not clear whether it will work out that way. Projected enrollments are lower than expected, meaning the insurance surcharges designed to sustain the exchanges might not generate enough revenue in the years ahead without significant changes in the financing model (2/8).

The Associated Press: California Health Exchange Pulls Doctor Directory Again
California's health insurance exchange pulled its online doctor directory again after some physicians were wrongly listed as accepting patients' coverage plans, spurring a blame game between insurers and providers. The move Thursday was the second time Covered California took down its list of medical providers after acknowledging problems, the Los Angeles Times reported in Saturday's editions (2/9).

The California Health Report: Sacramentans Flock To Sign Up For The Affordable Care Act, But Latinos Are Slow To Enroll
Twenty-seven-thousand people in the Sacramento area selected health-insurance plans through Covered California in the first three months of the marketplace’s opening, according to numbers released last week. This total, says the Department of Health Care Services, equals about 95 percent of the region’s people that officials have guessed will enroll during the application period from October 2013 through March. Although Latino participation remains disproportionately low, the state’s new health exchange is leading the nation in applications for health insurance under the guidelines of the Affordable Care Act. In fact, enrollment rates skyrocketed in December, and the program’s launch has rebounded into what analysts are calling a success (Bland, 2/9).

The Oregonian: Cover Oregon: Former IT Chief Lawson Steered California Contracts To Her Future Oregon Deputy
Carolyn Lawson, the former Oregon Health Authority official at the center of the storm of Oregon's non-functional health insurance exchange, was investigated by the state of California for inappropriate contracting in 2008, The Oregonian has learned. Upon being hired by the California Public Utility Commission in 2008, Lawson funneled five contracts worth nearly $500,000 in a four-month period to the small consulting company run by her former boss in the private sector. The former boss was Steven Powell, who Lawson later hired as her senior deputy in Oregon (Manning, 2/7).

The Oregonian: Monica Wehby: Sen. Jeff Merkley Should Demand Federal Probe Of Cover Oregon
Oregon Republican Senate candidate Monica Wehby on Friday said that Democratic Sen. Jeff Merkley should demand a federal Justice Department investigation of the problems surrounding the troubled Cover Oregon website. Wehby, a Portland pediatric neurosurgeon who is one of five GOP candidates seeking the nomination to run against Merkley, wrote the senator urging action after questions were raised about why the state's health exchange passed federal readiness reviews. No one has been able to enroll through the website for coverage since it was supposed to be open for business on Oct. 1 (Mapes, 2/7).

Reuters: Florida Set To Launch Its Own Limited Insurance Marketplace
Florida's own health insurance marketplace, long touted by Republican lawmakers as a free-market solution to providing affordable health coverage, is expected to launch as early as next week. Six years in the making, Florida Health Choices will open for business with an inventory of products that cannot legally be marketed using the words insurance, coverage, benefits or premiums, according to Chief Executive Officer Rose Naff (Liston, 2/7).

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Critics Continue Efforts To Limit Health Law Navigators

In Georgia, some navigator events were canceled after health law opponents held a protest at one and posted other events on its website, urging more protests. In South Dakota, meanwhile, a lawmaker introduced a bill to require state registration and background checks of the insurance guides. And a New Hampshire hospital that was excluded from Anthem's network is in the news because it is challenging that decision.

Georgia Health News: Navigator Program Tries To Avoid Controversy
The University of Georgia health navigator program has been keeping a low public profile since opponents of the Affordable Care Act held a protest at a navigator event in Coweta County in November. Sheri Worthy, a UGA official, said the Coweta meeting and those scheduled after that were canceled because Americans for Prosperity, a conservative group that opposes the ACA, posted the navigators’ events on its website and encouraged protests at them. The protesters who showed up in Coweta rallied peacefully outside the county Extension Service office, calling on UGA to stop supplying navigators to help people sign up for insurance coverage under the ACA, according to the Newnan Times-Herald (Empinado, 2/9).

The Associated Press: South Dakota Bill Would Regulate Health Insurance Helpers
The so-called navigators who help uninsured people sign up for insurance under President Barack Obama's health care overhaul would be regulated under a bill in the South Dakota Legislature. The sponsor, Sen. Al Novstrup, acknowledges that he opposes the Affordable Care Act, often called Obamacare. But the Aberdeen Republican said supporters of the health care law might also support his proposal because it provides additional protection for people seeking insurance (2/9).

The Associated Press: NH Hospital Argues Against Network Exclusion
A New Hampshire hospital fighting to get into Anthem's new narrow network says the insurance company submitted an incomplete application to state regulators, who then approved it without the necessary scrutiny. Frisbie Memorial Hospital in Rochester is one of 10 hospitals excluded from Anthem Blue Cross and Blue Shield's provider network for individual plans being sold under the federal health care overhaul law (Ramer, 2/9).

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Opting Out Of Medicaid Expansion Creates Coverage Gaps, Leaves Hospitals Short On Payments

The Wall Street Journal examines the gap created by some states deciding not to expand their Medicaid programs and what that decision means for hospitals' bottom lines. Also, Republican lawmakers consider "bailouts" for hospitals after they decided not to expand Medicaid. In the meantime, Arkansas' lawmakers get ready to debate the state's Medicaid experiment.

The Wall Street Journal: Millions Trapped In Health Law Coverage Gap
The 2010 health law was meant to cover people in Mr. Maiden's income bracket by expanding Medicaid to workers earning up to the federal poverty line -- about $11,670 for a single person; more for families. People earning as much as four times the poverty line -- $46,680 for a single person -- can receive federal subsidies. But the Supreme Court in 2012 struck down the law's requirement that states expand their Medicaid coverage. Republican elected officials in 24 states, including Alabama, declined the expansion .... The decision created a gap for Mr. Maiden and others at the lowest income levels who don't qualify for Medicaid coverage under varying state rules (Weaver, 2/9). 

The Wall Street Journal: Hospitals Take Financial Hit In Failed Expansion of Medicaid
State decisions to decline federal offers to expand Medicaid costs hospitals, in addition to lower-wage workers. Hospitals backed the health care law because it promised to create new, paying customers. Instead, the failure to expand Medicaid coverage by some states not only adds fewer insured patients, it also eliminates the payments hospitals had long received to cover the cost of uninsured people they treat free (Weaver, 2/9).

The Associated Press: Republicans Debate Mini-Bailouts For Hospitals
Republican governors scored easy political points by rejecting President Barack Obama's plan to enroll more poor people in government health insurance. Now Republican leaders in Georgia and Mississippi may be bailing out hospitals that will lose funding they would have gotten from Obama's health care law. South Carolina's leaders increased payments to some hospitals in a push to improve rural health, though the extra money likely placated hospital officials who might otherwise have pressured Republicans to adopt the Democratic plan (Henry and Cassidy, 2/9).

Kaiser Health News: Arkansas' Medicaid Experiment, Key To Obamacare Expansion, On Ropes
The Arkansas' experiment, known as the "private option" marks the first large-scale attempt to enroll Medicaid recipients into the same private health insurance plans that any consumer might buy in the health law’s online insurance marketplace. That's different from how Medicaid typically works where enrollees must join state-operated programs or private managed care plans designed exclusively for the poor -- and which pay doctors less, sometimes a lot less. As a result, private option enrollees like Fant will have access to a larger network of doctors and hospitals than is usually available through Medicaid (Galewitz, 2/10). Read a related Q & A with Arkansas Gov. Mike Beebe.

The Associated Press: Arkansas Fiscal Session Focuses On Medicaid Expansion
There's no question among lawmakers that the compromise Medicaid expansion approved last year will be the focus as they convene this week for the third-ever fiscal session. What's up in the air is whether there's enough support to keep the so-called private option program alive -- and what will happen if the [state] abandons it (DeMillo, 2/9).

The Associated Press: No Signs Of Compromise On Va. Medicaid Expansion
Gov. Terry McAuliffe has plenty of allies in his efforts to expand Medicaid eligibility in Virginia, including the state’s hospitals, insurance companies, several business organizations, liberal advocacy groups, and even some Republican state senators. But as the 2014 legislative session nears its midway point, there’s no sign that the Democratic governor has made any headway winning over one key group: leaders in the GOP-controlled House of Delegates (Suderman, 2/9).

In other state Medicaid news -

The Associated Press: Suit Challenging Ariz. Gov's Medicaid Plan Tossed
A lawsuit challenging Arizona Gov. Jan Brewer's Medicaid expansion plan that was filed by fellow Republicans in the state Legislature was dismissed in a ruling released Saturday, handing Brewer a major victory in her battle against conservative members of her own party. Maricopa County Superior Court Judge Katherine Cooper agreed with Brewer that the lawmakers challenging the law don't have the right to sue .... The suit was filed by the Goldwater Institute on behalf of 36 Republican legislators and several citizens, and Goldwater issued a statement saying it planned to appeal (Christie, 2/8).

The Associated Press: Pro-Medicaid Expansion Lawmakers Outrage Candidates
Republican legislators [in Arizona] who have received backlash from fellow conservatives for approving the state's expansion of Medicaid easily out-fundraised their colleagues and rivals last year, according to the latest figures reported by the Arizona Capitol Times (2/9).

The Associated Press/Washington Post: Feds Say They Fixed Medicaid Problem For Children
A wrinkle in the healthcare.gov website that temporarily left some children without insurance coverage has been fixed, federal officials said Friday. Children who have been denied Medicaid coverage can now be added to a subsidized plan, the Centers for Medicare and Medicaid Services said in a letter to a New Hampshire congresswoman (2/7).

Pittsburgh Post-Gazette: Corbett Pushes Back Medicaid Payments In Budget
When Gov. Tom Corbett laid out his proposed budget last week, he said "sound budgeting and spending discipline" were key. But the biggest single source of savings in the proposal, some critics charge, is merely an accounting gimmick -- delaying a $394 million payment to Medicaid managed-care providers. Making the payment a month later -- at the start of a new fiscal year in July 2015, rather than June 2015 -- pushes the cost from the proposed 2014-15 fiscal year budget into the following year's budget (Giammarise, 2/9).

Billings Gazette: State Hearings Officer Rips Agency For Handling Of Missoula Family’s Medicaid Case
For Missoula electrician Bill Fister and his family, trying to obtain and determine Medicaid benefits for his aging parents had become a "nightmare” they thought would never end. ... But now, the nightmare may be over — thanks in part to a scathing opinion by a state hearings officer, who last month blasted the state agency handling Medicaid and called its actions in the Fister case "unconscionable," a "deception" and "an incomprehensible mess" (Dennison, 2/10).

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Dems, GOP Continue Battles Over CBO Report Linking Health Law And Jobs

Various news outlets find that both sides aren't interpreting the report correctly. 

Politico: Both Parties Keep Cherry-Picking CBO Report
As the dust is finally settling on the CBO report released Tuesday, ... both [parties] still maintain vastly different portraits of the same document, depictions non-partisan analysts say are misleading, at best. ... Republicans are quietly accepting that the report was largely about people working less and making that choice on their own, not literally about “2 million lost jobs.” But ... Republicans and conservative critics are already shifting to a more general argument: Even if it is just people working less, there’s no way that can be good for the economy, especially if it’s because they lose Obamacare subsidies if their income goes up. The White House and Democrats say they’re happy to argue that point — because in their view, it’s much better for Americans, and the economy, if they can switch jobs or start businesses without having to worry about losing their health insurance (Nather, 2/9).

The Washington Post: They Quit Their Jobs, Thanks To Health-Care Law
Count Polly Lower among those who quit their jobs because of the health-care law. It happened in September, when her boss abruptly changed her job description. She went from doing payroll, which she liked, to working on her boss’s schedule, which she loathed. At another time, she might have had to grit her teeth and accept the new position because she needed the health benefits. But with the health-care law soon to take effect, she simply resigned — and hasn’t looked back (Somashekhar, 2/8).

The Washington Post’s The Fact Checker: Congressional Budget Office Data Taken Out Of Context As ‘Job’ Losses Tied To Health-Care Law
The Thom Tillis ad flashes this language when the voiceover asks, “How many workers will have to lose their jobs?” because of Hagan’s support for the health-care law: “Congressional Budget Office estimates 2 million lost jobs due to Obamacare.” But that’s not what the report says. ... For non-economists, the use of the phrase “jobs” is especially confusing because it sounds like a decision made by employers rather than workers. ... “costs jobs” attacks are going to keep earning Three Pinocchios (Kessler, 2/8).

Weekend headlines, tracked by KHN: CBO Report On Obamacare And Jobs Still Hot-Button Issue (2/9).

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Health Law Issues Take Key Place In Run-Up To Elections

For instance, the Louisiana chapter of Americans for Prosperity, the group backed by the Koch brothers, made a $600,000 ad buy against Sen. Mary Landrieu, D-La, because of her health law support. Meanwhile, other Democrats in tight races are trying to claim credit for trying to fix the problematic parts of the measure while still embracing its popular elements.

The Washington Post: The Koch Brothers' Group Is Getting Involved In Louisiana’s Obamacare Fight 
A major opponent of Obamacare is doubling down in Louisiana ahead of the start of that state’s 2014 legislative session. The state chapter of Americans for Prosperity -- the national tea party group founded by brothers Charles and David Koch -- launched on Jan. 2 and is pressing each of Louisiana’s 144 lawmakers to pledge opposition to expanding Medicaid under the law. ... The chapter is targeting federal lawmakers in its anti-expansion push, too. The group launched this year with a $600,000 ad buy against Sen. Mary Landrieu (D) over her support for Obamacare (Chokshi, 2/8).

The Associated Press/Washington Post: Vulnerable Democrats Try Straddle On Health Law
Hit with a multimillion-dollar barrage of televised attacks, Democrats in tough re-election races want credit for trying to fix the problematic parts of the health care law at the same time they claim bragging rights for its popular provisions and allege Republicans will reverse the crackdown on insurance company abuses. It’s a tricky, high-stakes political straddle by lawmakers who voted to create the law, which Republicans intend to place at the center of their campaign to win control of the Senate and hold their House majority (2/8).

Also in the news, the fact checking continues --

The Washington Post’s The Fact Checker: Durbin’s Claim That 10 Million Now Have Health Insurance Because Of Obamacare
Durbin appears to be combining two figures released by the administration: more 3 million signing up for insurance through the federal healthcare.gov and state exchanges and 6.3 million deemed eligible for Medicaid. Both figures are generally October through December, and so obviously have increased since then. But there are two big problems with both numbers (Kessler, 2/10). 

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Capitol Hill Watch

On Capitol Hill, Some Debt Limit Solutions Include 'Doc Fix'

In other congressional news, health insurers are upping their efforts to fight Medicare Advantage cuts.  

The Washington Post: With The Clock Ticking, Republicans See A Solution To Raising Debt Limit, But Not A Fight
A handful of bargaining ideas have emerged, with a proposal to restore recently cut military benefits in exchange for a one-year extension as a leading option. Other ideas, such as tying a debt-limit extension to the “doc fix,” which would alter the way doctors are reimbursed for Medicare treatments, are in the mix. One idea that gained traction over the weekend would combine the military and Medicare issues with the debt-ceiling extension, along with offsetting cuts that would prolong portions of the automatic spending decreases known as sequestration and changes to pension programs (Kane and Costa, 2/9).

The Hill: Medicare Fight Looms Over Midterms
Health insurers are arming themselves for an aggressive campaign to beat back cuts to Medicare Advantage. Insurers are hoping that their seven-figure lobbying and advertising effort, coupled with pressure from key business interests, will convince the administration to abandon the cuts that officials are expected to announce on Feb. 21 (Viebeck, 2/8).

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Federal Appeals Court Denies UnitedHealthcare Request To Throw Out Medicare Advantage Case

In the meantime, some consumers must re-enroll in traditional Medicare to keep seeing doctors UnitedHealthcare dropped in New Haven, Conn.

Hartford Courant: Appeals Court Upholds, Modifies Injunction Against UnitedHealthcare, Directs Doctors To Arbitration
A federal appeals court on Friday denied UnitedHealthcare's requests to toss out a legal battle brought by doctor associations in Fairfield and Hartford counties and directs doctors to arbitration. The decision, however, modified a temporary injunction issued by the U.S. District Court in Bridgeport that halted UnitedHealthcare's plan to cut thousands of Connecticut doctors from its Medicare Advantage network. That injunction is modified to give the aggrieved doctors up to 30 days from Feb. 7 to challenge their removal from the insurer's network (Sturdevant, 2/8).

New Haven Register: Medicare Advantage Patients Must Re-enroll by Feb. 14 To Keep Yale-New Haven Doctors
Senior citizens impacted by United Healthcare’s decision to drop Yale-New Haven Health System doctors are being given until Feb. 14 to enroll in original Medicare. Individuals who want to keep their doctors at Yale-New Haven can do so by un-enrolling from the United Healthcare Medicare Advantage Plan and re-enrolling in original Medicare,” Gov. Dannel Malloy said Friday (Stuart, 2/7).

Earlier, related KHN coverage: Judge's Medicare Advantage Order Could Have National Impact (Jaffe, 12/6/2013).

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Health Care Marketplace

After Uproar About Obamacare Remarks, AOL Reverses 401(k) Policy

News outlets reported that the company blamed the law and the health costs of two "distressed babies" for a significant change in how it matches 401(k) contributions.

The Washington Post: AOL Chief Reverses Changes To 401(k) Policy After A Week Of Bad Publicity
AOL chief executive Tim Armstrong e-mailed employees Saturday evening that he was reversing the company’s 401(k) policy and apologized for his controversial comments last week. “The leadership team and I listened to your feedback over the last week,” wrote Armstrong in his e-mail to the company. "... we have decided to change the policy back to a per-pay-period matching contribution.” The decision came after days of pressure on the company, after many employees were angered by a report by The Washington Post that retirement benefits were being changed (Yang, 2/8).

Capital New York: AOL Reverses Decision On 401(k) Matching After Outcry
That decision started to gain notoriety as Armstrong made television appearances linking the decision to Obamacare and, later, in a staff-wide conference-call meeting, mentioning two employees' difficult pregnancies and neonatal care needs as having cost the company too much money, requiring the adjustment. ... Read the memo reversing the 401(k) decision below: ... "On a personal note, I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit programs" (Pompeo, 2/8).

The New York Times: Facing Criticism, AOL Chief Reverses Change to 401(k) Plan
Numerous AOL employees were displeased that Mr. Armstrong had singled out two co-workers, although without mentioning their names. His comment drew substantial attention and criticism on social media. Deanna Fei, the mother of one of the babies, whose husband works for AOL, wrote a first-person account for the online magazine Slate that described her daughter’s harrowing birth and her own anger over Mr. Armstrong’s remarks (Kaufman, 2/9).

The Wall Street Journal: AOL Chief Reverses Changes to Benefits Policy
Health-care costs don't directly affect company spending on retirement benefits, employment experts say. However, companies often consider them in tandem, says Bill O'Malley, a compensation and benefits attorney in the national tax practice of McGladrey LLP. Health costs for women outpace those for men starting in the late teen years, according to a June 2013 report from the Society of Actuaries. Male costs eventually rise, but the gap remains large in the early 30s—with women consuming more than twice as much health care in dollar terms than men, a difference generally attributed to pregnancy and natal care. The gender costs even out around age 60, according to the report (Launder, 2/8).

Reuters: Backlash Hits AOL CEO After 'Distressed Babies' Remark
Armstrong's comments on Thursday during a company town hall meeting about why it was cutting 401(k) contributions ... After the town hall, Armstrong sought to clarify his remarks in a memo to AOL's 5,000 employees. "I discussed the increases we and many other companies are seeing in healthcare costs," he wrote. "In that context, I mentioned high-risk pregnancy as just one of many examples of how our company supports families when they are in need. We will continue supporting members of the AOL family" (Saba and Richwine, 2/7).

USA Today: Reports: AOL Reverses Position On Year-End 401(k) Match
A year-end lump sum 401(k) match from your employer has a nice ring to it --unless you change jobs earlier in the year. Employees that exit a company before year-end could lose out on the cherished corporate match, a key pillar of 401(k) savings plans ... Armstrong had told CNBC the year-end strategy was to offset higher costs related to the new Affordable Care Act (Shell, 2/8).

The Atlantic: AOL's Million-Dollar Distressed-Baby Claim: Could It Possibly Be True?
AOL has more than 5,000 employees, and companies of that size are usually self-insured. ... employees' premiums go to the employer, who uses them to pay for medical expenses the workers incur during the year. The goal, if you're CEO, is for the amount you collect from your employees to be slightly more than the cost of all of their medical expenses added together. ... the cost to the company might have been around $100,000—a far cry from the million-dollar-a-baby figure Armstrong gave. ... [But] let's say these mini-AOLers were way worse off than a standard premature baby. Let's assume they needed weeks in the intensive care unit and lots of expensive procedures. The cost might still have been totally negligible for AOL. ... Companies that choose this route usually re-insure themselves to guard against big losses, such as million-dollar babies (Khazan, 2/7).

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State Watch

State Highlights: Wis. Bill Would Limit Worker's Comp Medical Costs

A selection of health policy stories from Wisconsin, North Carolina, Connecticut and Kansas.

The Milwaukee Journal Sentinel: Bill Would Limit Costs For Medical Care Under Wisconsin's Worker's Comp
Wisconsin would put tighter caps on how much doctors and physical therapists could be paid to treat injured patients covered by worker's compensation insurance, under a bill before lawmakers. The complex bill seeks to hold down costs for the state's first-in-the-nation worker's compensation system, which pays for lost wages and disability as well as medical bills for those hurt on the job (Stein, 2/9).

Reuters: North Carolina Attorney General To Appeal Abortion Ultrasound Ruling
North Carolina's Democratic attorney general said on Friday he would appeal a federal court ruling that struck down a Republican-backed state law requiring abortion providers to conduct an ultrasound and explain it to a woman before an abortion. The move puts state Attorney General Roy Cooper, widely considered the likely Democratic challenger to Republican Governor Pat McCrory in 2016, at odds with many in his party who opposed the law passed in 2011 (Maguire, 2/7).

The CT Mirror: Primary Care Providers Accepting Medicaid Doubled Since 2011
Payment rates to primary care providers who see Medicaid patients rose dramatically in 2013, and so did the number of providers participating in the program. In December, there were 3,256 primary care providers in the program, a figure that includes doctors, advanced practice registered nurses and physician assistants. That was up from 2,370 in January 2013, a 37 percent increase. And it’s more than double the number of primary care providers participating in Medicaid in January 2012: 1,622. The primary care payment increase, which took effect in July 2013 but was retroactive to the start of the year, was required as part of the federal health law commonly known as Obamacare, and funded by the federal government (Becker, 2/10).

The CT Mirror: For CT Adults With Developmental Disabilities, Housing Help Unlikely Until Parents Die
Scott Langner was so excited when he learned he could one day move into an apartment with friends that he soon began talking about the invitations he’d use for his housewarming party. ... But last year, they learned that was unlikely to happen. His mother, Collette Bement Langner, said they were told that DDS no longer has the money to provide him residential supports, and that Scott would likely live with his parents until they die (Becker, 2/10). 

The Associated Press: Dentists Speak Out As Kansas Fluoride Bill Nears Hearing
As Kansas lawmakers prepare to discuss a bill pushed by opponents of fluoridation in public water supplies, several oral health advocates are fighting back against what they call misinformation that distorts research on the safety of fluoride. Rep. Steve Brunk, a Wichita Republican, has introduced a measure that would require municipalities that fluoridate their water to notify citizens that “the latest science confirms that ingested fluoride lowers the IQ in children” (2/9).

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Editorials and Opinions

Viewpoints: The Debate At AOL About A Baby's Medical Costs; Gov. Jindal Says Economy's Verdict On Health Law Is Not Good

Slate: My Baby and AOL's Bottom Line
Late last week, Tim Armstrong, the chief executive officer of AOL, landed himself in a media firestorm when he held a town hall with employees to explain why he was paring their retirement benefits. After initially blaming Obamacare for driving up the company’s health care costs, he pointed the finger at an unlikely target: babies. Specifically, my baby. ... ... She weighed 1 pound, 9 ounces. ... I take issue with how he reduced my daughter to a "distressed baby" who cost the company too much money. How he blamed the saving of her life for his decision to scale back employee benefits. How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting (Deanna Fei, 2/9).

Los Angeles Times: AOL Takes 'Blame Obamacare' To A New Level
As we observed back in December, one of the solid benefits the Affordable Care Act has brought to business leaders is to give them a convenient scapegoat for their own management problems. AOL's chairman and CEO, Tim Armstrong, this week raised that practice to an art form. In the process he blamed a couple of the company's employees, bizarrely, for their high medical costs. ... what is Armstrong talking about? He didn't specify, which is reason itself to believe he's blowing smoke. As a large employer, AOL doesn't face any new healthcare mandates under the Affordable Care Act, except to allow employees to keep children on their health plans up to age 26. But that's an incremental cost (Michael Hiltzik, 2/8). 

CNN: AOL's Excuses? Two Sick Babies And Obamacare
Here's why two newborns and the costs of Obamacare are unlikely to be the reasons that AOL changed its 401(k) program. ... Although it's convenient for employers to blame Obamacare for any instability or changes to health-care spending, the fact remains that the cost of maternity or other benefits spread over a large insured population is minimal. ... Blaming two new mothers for these sweeping benefit cuts is an awful way to treat employees who are already facing the worst of all possible scenarios: a very sick child (Dylan Roby, 2/8).

Los Angeles Times: Obamacare: It's A Net Gain For The Economy
The recent Congressional Budget Office report on healthcare reform has lots of good news. Insurance premiums are lower than anticipated, the Affordable Care Act will cost $9 billion less than previously estimated and the provision designed to buffer insurance companies from risk will actually raise revenue, not function as any sort of federal government bailout. But the good news has not gotten much attention because the CBO also projected that, within the next several years, healthcare reform may reduce employment and worker hours by the equivalent of about 2 million full-time positions (Jonathan Gruber, 2/9). 

Politico Magazine: Obamacare Is Anything But Compassionate
The verdict is in, and it's not good: Obamacare is rippling through the U.S. economy with vast implications for American prosperity. On Friday, we learned that the Obama economy has hit stall speed, with a paltry 113,000 jobs added in January. Two days earlier, we learned the president's health care law is discouraging Americans from working, according to an analysis by the nonpartisan Congressional Budget Office. The report makes for bracing reading. The law will reduce the labor supply by the equivalent of 2.3 million full-time workers, the CBO says — up from an estimated 800,000 just three years ago (Louisiana Gov. Bobby Jindal, 2/9).

Politico: Why Do Republicans Want Us to Work All the Time?
This week, America's political class has been consumed by an intense, vitriolic debate over a single number: 2.5 million. That's the amount by which, according to the Congressional Budget Office, President Obama's signature health care law will effectively reduce the U.S. work force over the next decade. The initial Republican reaction was predictable: Pundits filled the airwaves, Cassandra-like, to paint Obamacare as the ultimate job killer. Never mind that, reading the fine print, it's clear the CBO was talking about workers voluntarily reducing their hours in response to the law—not getting laid off or seeing their shifts scaled back (Benjamin Kline Hunnicutt, 2/7).

The New York Times: Will Saving On Health Care Hurt The Economy?
Lost in all the debate last week about whether or not the Affordable Care Act will hurt the economy is the fact that health care is already imposing a drag on growth. The health care sector has repeatedly helped to pull the economy from recession in recent decades, but this time around it is lagging behind the recovery. ... Spending less on health care is a longstanding goal of pretty much everyone who doesn't work in the health care industry (Binyamin Appelbaum, 2/8).

The New York Times: Leaving Work Behind
 [The Congressional Budget Office predicted] that by 2021, the equivalent of 2.3 million full-time workers — most of them low-wage — could disappear from the American economy. ... it’s easy to envision cases where the ability to reduce one's working hours would be an unmitigated good — for ailing near-retirees, for parents of young children. At the same time, though, the design of Obamacare — Medicaid expansion, subsidies for comprehensive rather than catastrophic coverage, and then the way the subsidy disappears if you get a raise or take a higher-paying job — makes the work disincentive much more substantial (Ross Douthat, 2/8).

The Wall Street Journal: The Economist Who Exposed ObamaCare
[M]ore than anyone, [University of Chicago economist Carey Mulligan] is responsible for the still-raging furor over the Congressional Budget Office's conclusion that ObamaCare will, in fact, harm growth and jobs. ... Mr. Mulligan is uncomfortable speculating about whether the benefits of this shift outweigh the costs. ... One major risk is slower economic growth over time as people leave the workforce and contribute less to national prosperity. Another is that social programs with high marginal rates end up perpetuating the problems they're supposed to be alleviating (Joseph Rago, 2/8).

The Washington Post: Virginia Should Climb Onboard Medicaid Expansion
New Hampshire looks like it will be the next state to assent to the obvious and accept buckets of federal money to offer its poor citizens health-care coverage. Finally, a bare majority of states will have made this no-brainer of a policy choice, implementing the section of Affordable Care Act (ACA) meant to help low-income Americans. Every time another state joins the ranks of the rational, it should embarrass states such as Virginia, which still hold out in blinkered opposition to anything related to Obamacare, no matter how good a deal this provision is for them (2/9). 

The Washington Post: The End Of Government
The cause is no mystery. An aging population and higher health spending automatically increase budget outlays, which induce the president and Congress to curb spending on almost everything else, from defense to food stamps. Over the next decade, all the government's projected program growth stems from Social Security and health care, including the Affordable Care Act. By 2024, everything else will represent only 7.4 percent of national income (gross domestic product), the lowest share since at least 1940, says Douglas Elmendorf, head of the Congressional Budget Office (Robert J. Samuelson, 2/9). 

The Washington Post: Obama's Blind Spot On Religious Liberty
Without a hint of irony, the president lamented eroding protections of religious liberty around the world. Just not, apparently, in America. Nary a mention of the legal challenges to religious liberty now in play between this administration and the Catholic Church and other religious groups, as well as private businesses that contest the contraceptive mandate in Obamacare. Missing was any mention of Hobby Lobby or the Little Sisters of the Poor — whose cases have recently reached the U.S. Supreme Court and that reveal the Obama administration’s willingness to challenge, rather than protect, religious liberty in this country (Kathleen Parker, 2/7).

Reuters: What Unites Democrats? Republicans!
Today's Democratic Party is smaller (Southern whites are largely gone) but far more coherent. What was amazing was that Democrats held together to pass the new healthcare law without a single Republican vote during President Barack Obama’s first two years in office. Democrats couldn’t do that during President Bill Clinton’s first two years when they had similar majorities in Congress. Why the sudden surge of Democratic Party discipline in 2009 and 2010? The answer: Republicans. The Tea Party’s radicalization of the GOP ended up splitting Republicans and unifying Democrats (Bill Schneider, 2/7).

Concord (N.H.) Monitor: Medicaid Deal Is Welcome News – Finally!
But state Senate leaders announced last week that they’d come to terms on a bipartisan deal to use the federal money available to help poor residents buy private insurance policies. So far, details have not been released. ... the breakthrough is welcome news indeed. ... But it remains too early to cross this legislation off the state's to-do list. In Arkansas, which pioneered the approach New Hampshire is considering, Republican support has waned, and the state may well reverse course. And in New Hampshire, a conservative group called the Republican Liberty Caucus is urging politicians to sign its anti-Obamacare pledge, which includes opposition to expanding Medicaid through the use of federal money, "regardless of how those funds are allocated." Part of the group's rationale: "Obamacare is the gateway drug to full socialism." Please. Granting poor residents access to health care is good public policy: good for individuals, good for the economy (2/9).

Spokesman Review: Washington Legislature Needs To Close Medicaid Funding Gap
Health care reform addressed [the problem of finding doctors for Medicaid patients] by putting Medicaid rates for primary care services on a par with Medicare rates. This improved funding allowed primary care providers to take on new Medicaid patients and cover overhead expenses in their practices. The problem is there is a six-month funding gap where Medicaid rates will be reduced back to their original rate due to differences in the federal and state funding calendars. The Legislature must address this gap in the current supplemental budget (Dr. Brian Seppi, 2/8).

The Baltimore Sun: Health Insurance Bill Arrives With A Higher Price Tag Than Expected
When the bill arrived from CareFirst BlueCross BlueShield, I expected to open it and see that I owed $250 by March 15. Instead it was for $286. That's $36 more than Maryland health exchange website showed my insurance plan would cost (Meredith Cohn, 2/8).

And on other issues -

The New York Times: Inside A Mental Hospital Called Jail
The largest mental health center in America is a huge compound here in Chicago, with thousands of people suffering from manias, psychoses and other disorders, all surrounded by high fences and barbed wire. Just one thing: It's a jail. ... Psychiatric disorders are the only kind of sickness that we as a society regularly respond to not with sympathy but with handcuffs and incarceration. ... In the 1800s, Dorothea Dix led a campaign against the imprisonment of the mentally ill, leading to far-reaching reforms and the establishment of mental hospitals. Now we as a society have, in effect, returned to the 1800s (Nicholas Kristof, 2/8).

The New York Times: Lost in Clinical Translation
A classic "Far Side" cartoon shows a man talking forcefully to his dog. The man says: "Okay, Ginger! I've had it! You stay out of the garbage!" But the dog hears only: "Blah blah Ginger blah blah blah blah blah blah blah blah Ginger …" As a nurse, I often worry that patients' comprehension of doctors and nurses is equally limited — except what the patient hears from us is: "Blah blah blah Heart Attack blah blah blah Cancer." ... Ill health is frightening, the treatments we offer can be scary, and stress and anxiety make people poor listeners. Our high-tech scans and fast-paced care save lives, but we need to make time for the human issues that pull at every patient's heart (Theresa Brown, 2/9).

Bloomberg: How To Slow Heroin's Comeback
Yet the attention generated by [Philip Seymour] Hoffman's death is a reminder that heroin use is making something of a comeback nationwide, even though its use is still very rare compared with cocaine or methamphetamine. ... The new legal requirement that substance abuse treatment get parity with other diseases in insurance coverage, plus expanded insurance coverage under Obamacare, will make treatment more available. Substitution therapies (methadone and buprenorphine) for opiate addiction are valuable tools, but only if the treatment system and the criminal justice system are willing to follow the evidence rather than “just say no” prejudices (Mark A.R. Kleiman and Lowry Heussler, 2/7).

The Boston Globe: Doctors Unprepared For Medical Marijuana
Now that medical marijuana is legal in Massachusetts and licenses have been awarded for the first 20 dispensaries, you'd guess that my practice is busily preparing to meet the demands of patients seeking marijuana for several debilitating conditions including chemotherapy-related nausea and AIDS-related weight loss. You'd guess wrong. Since Massachusetts voters approved legalization in 2012, I've received no special training (required for physicians to certify patients as eligible for marijuana treatment), been invited to no seminars or lectures, and have little more information than that which the state has provided to my fellow citizens (Suzanne Koven, 2/10).

PBS NewsHour: Why Do Americans Spend So Much On Pharmaceuticals?
The United States spends almost $1,000 per person per year on pharmaceuticals. That’s around 40 percent more than the next highest spender, Canada, and more than twice as much as than countries like France and Germany spend. So why does the U.S. spend so much? Is it because Americans take more medicines or because they pay higher prices? Can Americans afford the drugs they need? And will the Affordable Care Act change anything? (Valerie Paris, 2/7).

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Stephanie Stapleton

Andrew Villegas

Lisa Gillespie
Shefali Luthra

The Kaiser Daily Health Policy Report is published by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation. (c) 2014 Kaiser Health News. All rights reserved.