Daily Health Policy Report

Wednesday, July 23, 2014

Last updated: Wed, Jul 23

KHN Original Reporting & Guest Opinion

Health Reform

Capitol Hill Watch

State Watch

Editorials and Opinions

KHN Original Reporting & Guest Opinion

Appeals Courts Split On Legality Of Subsidies For Affordable Care Act

Kaiser Health News staff writer Julie Rovner reports: “Two U.S. appeals courts Tuesday reached opposite conclusions about the legality of subsidies in the Affordable Care Act, a key part of the law that brings down the cost of coverage for millions of Americans. In Washington, a three-judge panel at the U.S. Appeals Court for the D.C. Circuit ruled that the Internal Revenue Service lacked the authority to allow subsidies to be provided in exchanges not run by the states” (Rovner, 7/22). Read the story.

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Brief Consumer Guide To Health Law Court Decisions

On Tuesday two U.S. appeals courts issued conflicting rulings on a subject that’s important to millions of people: the availability of subsidies to help purchase coverage under the health-care law. Kaiser Health News’ Mary Agnes Carey answers some frequently asked questions about those court decisions and how they impact consumers (7/22). Read the story.

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California Nurses Union Braces For Contract Battle

Reporting for Kaiser Health News, in partnership with NPR, KQED’s April Dembosky writes: “But this is no church service, and nurses are not here to worship. The California Nurses Association is rousing its troops for battle. California’s powerful nurses’ union will begin bargaining next week with Kaiser Permanente on a new four-year contract for nurses at its Northern California hospitals. (Kaiser Health News is not affiliated with Kaiser Permanente.) Kaiser operates the largest hospital system in the state, by number of hospitals and number of hospital beds, and is the eighth largest health system in the country” (Dembosky, 7/22). Read the story

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Capsules: Business Groups, Consumer Advocates Draw Lines In The Sand About Essential Benefits; What’s Next In The Wake Of Conflicting Federal Court Decisions

Now on Kaiser Health News’ blog, Shefali Luthra reports on how business groups and consumer advocates are beginning to contemplate the future of the health law's essential benefits: “During a July 21 Capitol Hill briefing, members of the Affordable Health Benefits Coalition, a business interest group including the U.S. Chamber of Commerce and the National Retail Federation, said they would push to reshape essential benefits, arguing that current regulations have led to unaffordable hikes in insurance premiums” (Luthra, 7/23).

Also on the blog, watch Kaiser Health News' Julie Rovner and SCOTUSblog’s Tom Goldstein with Gwen Ifill on PBS NewsHour Tuesday to discuss the implications of two federal court decisions that disagreed about the legality of selling subsidized insurance on healthcare.gov. Check out what else is on the blog.

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Political Cartoon: 'No Bones About It?'

Kaiser Health News provides a fresh take on health policy developments with "No Bones About It?" By Rex May.

Meanwhile, here's today's haiku:


Subsidies are out?
So rather than consumers,
ACA needs help.
- Beau Carter

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

Questions Abound As Courts Split On Legality Of Health Law Subsidies

Two U.S. courts of appeals reached different decisions regarding the issue of whether the health law's subsidies can be used by consumers shopping for health coverage on the federal exchange, because their states opted against setting up their own online insurance marketplace. This development injects confusion as the Obama administration works toward the next open enrollment season, which is slated for November. Ultimately, the issue could land before the Supreme Court.

Kaiser Health News: Appeals Courts Split On Legality Of Subsidies For Affordable Care Act
Two U.S. appeals courts Tuesday reached opposite conclusions about the legality of subsidies in the Affordable Care Act, a key part of the law that brings down the cost of coverage for millions of Americans. In Washington, a three-judge panel at the U.S. Appeals Court for the D.C. Circuit ruled that the Internal Revenue Service lacked the authority to allow subsidies to be provided in exchanges not run by the states (Rovner, 7/22).

The New York Times: New Questions On Health Law As Rulings On Subsidies Differ
Two federal appeals court panels issued conflicting rulings Tuesday on whether the government could subsidize health insurance premiums for millions of Americans, raising yet more questions about the future of the health care law four years after it was signed by President Obama. The contradictory rulings will apparently have no immediate impact on consumers. But they could inject uncertainty, confusion and turmoil into health insurance markets as the administration firms up plans for another open enrollment season starting in November (Pear, 7/22).

NPR: Obama's Health Care Law Has A Confusing Day In Court
Another wild legal ride for Obamacare on Tuesday: Two U.S. Court of Appeals panels issued conflicting decisions on an issue with the potential to gut the health care overhaul. The two rulings could lead to another U.S. Supreme Court showdown over the controversial law, all because of what one of the law's opponents initially called "a glitch" (Totenberg, 7/22).

The Washington Post: Federal Appeals Courts Issue Contradictory Rulings On Health-Law Subsidies
The conflicting rulings give traction to the most serious current threat to the Affordable Care Act, which has been battered by a series of legal challenges since it was enacted four years ago. The dispute centers on whether the subsidies may be awarded in states that chose not to set up their own insurance marketplaces and instead left the task to the federal government. About 5.4 million people had signed up for coverage on the federal exchange as of this spring, federal figures show. About 87 percent of them received subsidies (Somashekhar and Goldstein, 7/22).

The Wall Street Journal: Appeals Courts Issue Conflicting Rulings On Health-Law Subsidies
In a blow to President Barack Obama's signature legislative achievement, a panel of the U.S. Court of Appeals for the District of Columbia Circuit, on a 2-1 vote, invalidated an Internal Revenue Service regulation that implemented a key piece of the 2010 health law. The regulation said subsidies for health insurance were available to qualifying middle- and low-income consumers whether they bought coverage on a state or federally run exchange. Two hours later, a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., reached the opposite conclusion, unanimously ruling that consumers in states relying on the federal marketplace could receive subsidies. That handed the White House a victory that counteracted the administration's loss in the other case (Kendall and Armour, 7/22).

Los Angeles Times: Federal Appeals Courts Issue Conflicting Rulings On Obamacare
The legal battle gives Obamacare’s opponents another shot at trying to kill the law in the high court, a goal they fell one vote short of in 2012. In that case, four justices voted to strike down the entire legislation as unconstitutional. Chief Justice John G. Roberts Jr. joined the four liberal justices to uphold the core of the law. This time, the outcome at the high court would turn on whether at least one of the five conservative justices agreed to uphold Congress’ broad goal of providing all Americans with insurance they can afford (Savage, 7/22).

Politico: Wild Day For Obamacare: Appeals Court Rulings Conflict
For now, no one will have their subsidies cut off while the legal battle continues. The Obama administration said it will appeal the D.C. ruling on Halbig v. Burwell by asking for an en banc review involving the full panel. “We are confident in the legal case that the Department of Justice will be making,” said White House press secretary Josh Earnest. The plaintiffs in the fourth circuit’s King v. Burwell in Virginia haven’t yet said what they’ll do next (Winfield Cunningham, 7/22).

The Associated Press: Appeals Courts Split on Health Law’s Subsidies
President Barack Obama's health care law is snarled in another big legal battle, with two federal appeals courts issuing contradictory rulings on a key financing issue within hours of each other Tuesday. But the split rulings don't necessarily mean another trip to the Supreme Court for the Affordable Care Act. And White House spokesman Josh Earnest immediately announced that millions of consumers will keep getting financial aid for their premiums as the administration appeals the one adverse decision (7/23).

Reuters: Latest Obamacare Legal Knot Won’t Be Easy To Untangle
U.S. judges have their work cut out for them untangling a legal knot created on Tuesday when two federal appeals courts released conflicting rulings hours apart going to the heart of the role the federal government will play in Obamacare. The latest conservative challenge to President Barack Obama's healthcare overhaul will not necessarily land in the U.S. Supreme Court, although it could end up there as soon as this year if the two lower courts go on disagreeing. At stake is how millions of Americans pay for private health insurance, or if they can afford it at all (Ingram, 7/22).

Bloomberg: Obamacare On Path Back To Higher Court After Ruling Split
The U.S. Supreme Court may not be done with Obamacare yet. With appellate courts reaching opposite conclusions on the same day about a crucial financing provision of the 2010 law, a third showdown before the justices is probable. Splits among the federal circuits have preceded previous high court rulings on the Affordable Care Act. In 2012, the law was narrowly upheld when the court ruled Congress has the power to make Americans carry insurance or pay a penalty. Last month, the court said private companies can claim a religious exemption from a requirement that they offer birth-control coverage (Harris and Zajac, 7/23).

USA Today: Appeals Court Panels Issue Split Decisions On Obamacare
The federal subsidies offered through the exchanges have reduced monthly insurance premiums by 76% for those who qualify, federal health officials say. The average monthly premium dropped from $346 to $82. In 2016, an estimated 7.3 million people in the 34 states with federal exchanges would receive subsidies totaling $36 billion, according to the Urban Institute. To qualify for subsidies, participants must have incomes below 400% of the federal poverty line, or $95,400 for a family of four (Wolf, 7/22).

McClatchy: Courts Issue Conflicting Rulings on Health Care Tax Subsidies
Two appeals courts on Tuesday reached radically different conclusions about whether millions of consumers in 36 states can use tax credits to help buy health coverage on the federal health insurance marketplace. The conflicting rulings, combined with two other pending challenges still awaiting decisions, potentially tee up for the Supreme Court its next landmark health care case and leave one of the Affordable Care Act’s signature provisions in a state of legal limbo (Doyle and Pugh, 7/23).

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How Will The Latest Health Law Decisions Affect You?

News outlets offer consumer impact insight over Tuesday's rulings on the health law's subsidies to buy health insurance on the federal and state marketplaces.

McClatchy: Confused About the Health Care Rulings?
Contrary rulings Tuesday on a key element of the Affordable Care Act by two separate federal appeals courts raise a variety of questions (Pugh, 7/22).

Kaiser Health News: Brief Consumer Guide To Health Law Court Decisions
On Tuesday two U.S. appeals courts issued conflicting rulings on a subject that’s important to millions of people: the availability of subsidies to help purchase coverage under the health-care law. Kaiser Health News’ Mary Agnes Carey answers some frequently asked questions about those court decisions and how they impact consumers (7/22).

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Dueling Rulings On Health Law Subsidies Leave States In Lurch

States are pondering their places in the health law's federal- or state-based health insurance exchanges after a pair of contradictory appeals court rulings Tuesday threw up in the air if states that use the federal exchange can offer subsidies to their residents to help afford coverage.

The Richmond Times-Dispatch: Appeals Courts Issue Contradictory Rulings On Health Care Subsidies
Two federal appeals courts on Tuesday issued contradictory rulings on whether low- and middle-income people may receive federal subsidies to buy policies in the states that did not set up their own health insurance exchanges. The issue, which could be heading to the U.S. Supreme Court, is crucial in 34 states, including Virginia, which did not set up their own health exchanges. … In Virginia, 82 percent of the 216,356 people who signed up for marketplace plans in the first enrollment period got financial assistance. Those 177,000 people are receiving an annual average of $3,048, according to the state Attorney General’s Office (Cain and Martz, 7/22).

The Oregonian: Dueling Health Care Law Rulings Leave Experts Split On Oregon's Insurance Premium Subsidies
Conflicting federal appeals court rulings over whether the federal health insurance exchange can issue premium tax credits won't have any effect in Oregon over the short term. The long-term outcome may have to wait for a U.S. Supreme Court ruling, and potentially won't even be settled then. That's because Oregon's plan to use the federal exchange in 2015, while keeping some functions under state control, may fall into a legal gray area, experts said Tuesday. At issue is whether all states, including those using the federal exchange, can issue reduced premiums to people with qualifying incomes under the 2010 Affordable Care Act. About 70,000 Oregonians received the subsidies this year (Budnick, 7/22).

The Boston Globe: Mass. Unlikely To Be Affected By Health Care Rulings
Will Tuesday’s conflicting court rulings on federal health insurance subsidies have any bearing in Massachusetts? It appears unlikely, even though the state has left open the possibility of joining the federal healthcare.gov insurance marketplace. If the Massachusetts Health Connector does go that route, it would still be considered a state-based exchange, but one supported by the federal government -- and it’s not clear whether the rulings would apply (Freyer, 7/22).

The Milwaukee Journal Sentinel: Dueling Court Rulings Leave Obamacare Subsidies Up In Air
The rulings could affect subsidies for more than 4 million people nationally, including more than 100,000 in Wisconsin, and created immediate confusion among some consumers. Arise Health Plan, which sold individual plans in Milwaukee as well as elsewhere in eastern Wisconsin, said it received phone calls Tuesday from confused customers. An estimated 90 percent of the 130,000 people in Wisconsin who have bought health plans sold on the marketplace set up under the law qualified for subsidies (Boulton and Gumpert, 7/22).

Des Moines Register: Obamacare Rulings Could Affect 24,000 Iowans
More than 24,000 Iowans could lose subsidized health insurance if courts ban the government from helping pay for policies purchased on the federal government's online marketplace, Iowa's insurance commissioner said today. ... Iowa is one of [36] states that do not have their own health-insurance marketplaces. Leaders here looked into building one, but decided instead to use the federal version of the system, called healthcare.gov (Leys, 7/22).

Georgia Health News: Exchange Subsidies Draw Conflicting Court Rulings
More than 190,000 Georgians are enrolled in the health insurance exchange created by the Affordable Care Act. But if a D.C. federal court ruling announced Tuesday on exchange subsidies is ultimately upheld, that Georgia number could shrink precipitously. The U.S. Court of Appeals for the District of Columbia ruled Tuesday that the language of the ACA allows subsidies, or discounts, only for people who obtain coverage through exchanges run by the states, and not by the federal government. Georgia is among 36 states whose insurance exchanges are federally run (Miller, 7/22).

Kansas Health Institute News Service: Conflicting Rulings On Obamacare Subsidies Put Consumers In Limbo
Conflicting federal court rulings are raising questions about whether consumers in Kansas and Missouri will continue to be eligible for subsidies when purchasing private health insurance through the Obamacare marketplace (McLean, 7/22).

The CT Mirror: Obamacare’s Big Day In Court Means Little For CT
Two federal courts issued conflicting rulings on the health law known as Obamacare Tuesday, but their decisions aren’t expected to directly affect Connecticut residents. That’s because the cases address whether it’s legal for the federal government to help pay the insurance premiums of people who buy their insurance through federally run marketplaces known as exchanges. Connecticut’s health insurance exchange, Access Health CT, is run by the state, not the federal government. That means the legality of federal subsidies provided to Access Health customers is not in question (Becker, 7/22).

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Marketplace Confronts Confusion In Face Of Conflicting Rulings

News outlets report that providers and insurers worry the two appellate court decisions could undermine the stability of the newly expanded health insurance markets. Meanwhile, governors in those states that opted not to set up their own marketplaces may face pressure if consumers who used healthcare.gov to shop for coverage lose their subsidies.  

The Wall Street Journal: Hospitals, Insurers Say Subsidies Rulings Further Confuse The Issue
Health-industry officials said Tuesday's dueling court rulings over federal health-law subsidies set the stage for another bout of confusion as consumers return to marketplaces this fall to shop for next year's coverage. "People are going to be coming in with more questions about these court cases," said Jason Stevenson, a spokesman for the Utah Health Policy Project, a nonprofit organization that has navigators that aid residents in enrolling on the federal exchange. "People are already asking about the long-term stability of the ACA" (Wilde Mathews, Weaver and Armour, 7/22).

Modern Healthcare: Clashing Rulings On Exchange Subsidies Raise Fear of Instability
Healthcare providers and insurers fear that today's conflicting appellate court rulings on the legality of Obamacare premium subsidies offered through the federal insurance exchange could have a destabilizing effect on the newly expanded insurance market (Robeznieks, 7/22).

The Wall Street Journal: Some Governors Face Fallout Over Health Law Ruling
The prospect of millions of people losing federal tax credits they obtained under the health law places some governors and legislators in a tough spot in the run-up to this fall's elections. Some 36 states turned over the task of running the health law's insurance exchanges to the federal government. If courts ultimately back Tuesday's decision by a federal appeals court in Washington, D.C., which held that Americans can obtain tax credits only if their state is operating its own exchange, then officials in these states may come under pressure to find ways to ensure residents keep subsidies (Radnofsky and Peters, 7/22).

Politico: Democrats Still Haven’t Learned Obamacare Lesson
The conflicting rulings were another wake-up call for Democrats about the fragility of the health care law -- and a reminder that whenever they think a lawsuit is no threat to the law, it’s probably a threat to the law. It’s all because of what most Democrats insist is a drafting error in the law, but it’s kind of a big one. The federal health insurance marketplace is now serving 36 states that couldn’t or wouldn’t set up their own exchanges (Nather and Haberkorn, 7/22).

Meanwhile, a look at the courts --

Politico: How Obama’s Court Strategy May Help Save Obamacare
Last fall, President Barack Obama and Senate Majority Leader Harry Reid deployed the “nuclear option” to help get three liberal judges onto the D.C. Circuit appeals court. Tuesday’s ruling on Obamacare is a dramatic example of why they forced the issue (Gerstein, 7/22).

The Associated Press: Judges in Health Care Rulings Vote Party Line
In rapid succession, six federal judges on two appeals courts weighed in on a key component of President Barack Obama's health care law. Their votes lined up precisely with the party of the president who appointed them. It was the latest illustration that presidents help shape their legacies by stocking the federal bench with judges whose views are more likely to align with their own (7/23).

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Undercover Agents Get Health Insurance Subsidies With Fake IDs

Federal investigators, working undercover for the Government Accountability Office, said they had been able to obtain subsidized health insurance under the health law using fictitious identities and false documents. The administration said it was working on remedying the verification problems.

The New York Times: Investigators Detail Missteps In Verification For Health Care
Federal investigators working undercover said Tuesday that they had been able to obtain subsidized health insurance under the Affordable Care Act using fictitious identities and false documents. The investigators, from the Government Accountability Office, said their tests indicated the Obama administration was not adequately verifying information submitted by applicants (7/22).

The Washington Post: Federal Undercover Investigation Signs Up Fake Applicants For ACA Coverage
The results of the inquiry by the Government Accountability Office are evidence of still-imperfect work by specialists intended to assist new insurance customers as well as government contractors hired to verify that coverage and subsidies are legitimate. The GAO also pointed to flaws that linger in the marketplace’s website, healthcare.gov (Goldstein, 7/22).

The Wall Street Journal: Fictitious Applicants Able To Get U.S. Health-Insurance Tax Credits
The investigation will be the focus of a House Ways and Means subcommittee hearing Wednesday on the potential for waste and fraud in the subsidies. Republicans opposed to the health law say the GAO's findings are evidence of the government's inability to verify information, which they say creates the potential for fraud and abuse (Armour, 7/22).

The Associated Press: Agents Get Subsidized ‘Obamacare’ Using Fake IDs
Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama's health care law. The weak link in the system seemed to be call centers that handled applications for thousands of consumers unable to get through online (7/23).

NBC News: GAO Sting Finds It Easy to Fake It, Get Obamacare Premiums
Eleven out of 12 fake applications for government-subsidized health insurance got through a verification process and the bogus beneficiaries are still covered, the Government Accountability Office said Tuesday. The GAO launched the sting to check to see how well the Obamacare process checks for counterfeit applications. The results were messy, GAO’s Seto Bagdoyan says in testimony prepared for a hearing Wednesday of the House Ways and Means oversight subcommittee (Fox and Seidman, 7/23).

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Contraception Accommodation For Religious Groups To Be Broadened

The Obama administration said Tuesday it will create a new option for certain religious nonprofits that object to the health law's contraception mandate that does not entail submitting a form that they say also violates their religious beliefs.

The Washington Post: In Response To Court Ruling, Administration Works To Ensure Contraceptive Coverage
The Obama administration said Tuesday that it is coming up with a work-around to ensure that employees of certain charities, hospitals and colleges whose leaders have religious objections to contraceptives can still get birth control through their employee health insurance plans. The administration made its plans known in a legal brief filed with the U.S. Court of Appeals for the 10th Circuit in Denver. The alternative plan, which is still being developed, is in response to a recent Supreme Court order questioning the government’s current process for allowing nonprofit organizations to opt out of a requirement that their health plans cover all contraceptives that have been approved by the Food and Drug Administration (Somashekhar and Barnes, 7/22).

The Wall Street Journal: Obama Administration To Revise Part Of Contraception Rule
The Obama administration said Tuesday it will revise a compromise arrangement for religiously affiliated universities and charities that object to providing contraception in workers' health insurance plans, in response to a Supreme Court order earlier this month (Radnofsky, 7/22).

Politico: Administration To Broaden Contraception Accommodation For Religious Groups
The Obama administration will create a new option for certain religious nonprofits that object to both the Obamacare contraception mandate and the earlier administration efforts to find accommodation for them, according to a court document filed Tuesday. The brief filed in the U.S. Court of Appeals for the 10th Circuit says the administration is broadening the accommodation policy after the Supreme Court ruled that Wheaton College, a religious institution, did not have to provide contraception in employee health plans while the issue makes its way through the courts. Details were not spelled out (Kenen, 7/22).

The Associated Press: Government Drafting Birth Control Accommodation
The Obama administration is developing a new way for religious nonprofits that object to paying for contraceptives in their health plans to opt out, without submitting a form they say violates their religious beliefs. The government has been searching for solutions since the Supreme Court decided an evangelical college in Illinois can avoid filling out the form while the case is being appealed (7/22).

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CNN Poll: Half Of Americans Say Obamacare Has Helped Their Families Or Others

A CNN poll finds that more than half the public says the health law helped their families or others, but fewer than one in five say they have personally benefited. Meanwhile, election-year politics in Ohio may lead to the release of 2015 premiums on Oct. 1, and business and consumer groups seek to influence benefits.

CNN: Is Obamacare Working?
More than half the public says Obamacare has helped either their families or others across the country, although less than one in five Americans say they have personally benefited from the health care law, according to a new national poll. A CNN/ORC International survey also indicates that a majority of Americans oppose the Affordable Care Act, but that some of that opposition is from people who don't think the measure goes far enough (7/23).

The Star Tribune: Dayton Wants Health Insurers To Reveal 2015 Rates On Oct. 1
Election-year politics are shining a spotlight on health insurance rates, with Gov. Mark Dayton now asking the state’s insurance plans to voluntarily agree to release them on Oct. 1. Republicans have pressed for release of the 2015 health insurance rates before the November election, even though there’s no requirement that insurers do so until open enrollment starts on Nov. 15. Minnesota had the lowest insurance rates in the nation in the first year under the federal health law, but some Republicans suspect that rates will go up (Crosby, 7/22).

Kaiser Health News: Capsules: Business Groups, Consumer Advocates Draw Lines In The Sand About Essential Benefits
During a July 21 Capitol Hill briefing, members of the Affordable Health Benefits Coalition, a business interest group including the U.S. Chamber of Commerce and the National Retail Federation, said they would push to reshape essential benefits, arguing that current regulations have led to unaffordable hikes in insurance premiums (Luthra, 7/23).

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Capitol Hill Watch

Obama VA Nominee Gets Warm Reception From Lawmakers

Members of the Senate Committee on Veterans' Affairs indicated Tuesday they would likely endorse Robert McDonald, President Barack Obama's nominee to take over the Department of Veterans Affairs. A full Senate vote could come as early as next week.

The Washington Post: Obama Nominee McDonald Pledges To ‘Transform’ VA
President Barack Obama’s choice to lead the Department of Veterans Affairs pledged Tuesday to transform the beleaguered agency, saying that “systematic failures” must be addressed. Robert McDonald cited problems with patient access to health care, transparency, accountability and integrity, among other issues (7/22).

The Wall Street Journal: VA Nominee Gets Warm Reception At Confirmation
If confirmed, Mr. McDonald would take over from Sloan Gibson, who has been acting as VA secretary since Eric Shinseki's resignation in late May following revelations of systemic problems including falsified reports about patient appointment wait times. Mr. McDonald was a paratrooper in the Army's 82nd Airborne Division before beginning a 33-year career at Procter & Gamble Co., including serving as CEO from 2009 to 2011 (Kesling and Schwarz, 7/22).

Modern Healthcare: McDonald Moves Closer to VA Secretary Role; Senate Could Vote by Aug. 1
Robert McDonald on Tuesday moved a step closer to Senate confirmation as the next secretary of veterans affairs, appearing before the Senate Committee on Veteran Affairs to favorable comments from committee members. A formal committee vote on his nomination is likely as soon as Wednesday. Full Senate confirmation could come before Congress' August recess begins (Dickson, 7/22).

And a VA funding bill hits a long-term funding roadblock --

USA Today: VA Budget Request Snags Veterans Health Bill
After meeting last week, lawmakers say they won't send a stopgap veterans' health bill to the president's desk without working out details on longer term Veterans Affairs spending. The rift comes after VA acting Secretary Sloan Gibson sent Sen. Bernie Sanders, I-Vt., a memo detailing how VA would use the $17.6 billion Gibson requested last week as part of "additional resource needs" through fiscal year 2017 (Kennedy, 7/22).

Meanwhile, a Missouri whistleblower asks about future protections --

St. Louis Post Dispatch: Local VA Whisteblower Questions Acting Secretary During St. Louis Visit
As the acting secretary of Veterans Affairs vowed to crack down on whistleblower retaliation in the department, the former chief of psychiatry at the local VA health care system said he was recently demoted for the second time after filing a complaint last fall. Dr. Jose Mathews on Tuesday asked secretary Sloan Gibson what protections he and other whistleblowers can expect after a national crisis of treatment delays has uncovered numerous problems in the VA health care system. Gibson, who was in St. Louis for the national convention of the Veterans of Foreign Wars, addressed VA employees in a town hall meeting at the John Cochran hospital on North Grand Boulevard (Bernhard, 7/23).

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State Watch

Highlights: Calif. Nurse Union In Contract Fight; Personhood Measure In Colo.; Md. Transgender Coverage

A selection of health policy stories from California, Colorado, Maryland, Kansas, Missouri, Washington state and Minnesota.

Kaiser Health News: California Nurses Union Braces For Contract Battle
But this is no church service, and nurses are not here to worship. The California Nurses Association is rousing its troops for battle. California’s powerful nurses’ union will begin bargaining next week with Kaiser Permanente on a new four-year contract for nurses at its Northern California hospitals. (Kaiser Health News is not affiliated with Kaiser Permanente.) Kaiser operates the largest hospital system in the state, by number of hospitals and number of hospital beds, and is the eighth largest health system in the country (Dembosky, 7/22).  

Denver Post: Rally Against Personhood Measure Held At Colorado Capitol
A ballot measure that would change wording in the Colorado Criminal Code and Wrongful Death Act to include unborn human beings drew opponents and supporters to the state Capitol on Tuesday, with both sides vehemently arguing the initiative's eventual endgame. The rally was sponsored by a wide-reaching coalition of political, medical and religious interests who decried Amendment 67 as an attempt to effectively ban abortions and a woman's ability to make her own health care decisions (Cotton, 7/22).

Baltimore Sun: Maryland Shifts Insurance Policy to Cover Transition-Related Care of Transgender Employees
In a reversal of state health care policy, transgender state employees in Maryland can now access gender reassignment surgery, hormone therapy and other transition-related care under their state-provided health insurance plans. The change quietly went into effect at the start of this month as the result of legal negotiations in a discrimination case brought against the state by Sailor Holobaugh, a 31-year-old clinical research assistant in neurology at the University of Maryland School of Medicine in Baltimore (Rector, 7/22).

Kansas City Public Media: Kansas Docs Say Plan For Transplant Waits Would Make Patients Sicker
For the past several years, the United Network for Organ Sharing, or UNOS, which coordinates transplants nationally, has been studying ways to address liver transplant disparities by changing the way donated livers are allocated and shifting some organs away from healthier patients and toward sicker ones. Today, most livers donated in Kansas and the western part of Missouri are used locally, with about 40 percent going to nearby areas of the Midwest and a few outside the region. UNOS is considering a change from this mostly local allocation strategy to a more regional, or even national, approach. Under some of the plans being studied, organs donated in Kansas City would be sent much more often to places as far away as Phoenix, Minneapolis and Salt Lake City, depending on where they're needed most (Smith, 7/22).

Seattle Times: Hospital System Stops Affiliation With Small Hospitals In Washington State 
PeaceHealth, a Catholic health-care system, has delayed indefinitely its planned affiliations with small hospitals in Snohomish and Skagit counties, citing higher-than-expected costs in the effort to roll out a medical information-technology system. Nancy Steiger, PeaceHealth CEO and chief mission officer for its Northwest network, said PeaceHealth could not make a final commitment at this time to Cascade Valley Hospital in Arlington or Skagit Regional Health in Mount Vernon. Just a few weeks ago,  PeaceHealth realized the heavy lifting to integrate systems with the two hospitals would come at the exact same time as the push to get the Epic medical information-technology system up and running in PeaceHealth’s hospitals around the region, Steiger said in an interview Tuesday (Ostrom, 7/22).

Minnesota Public Radio: Is Minn. Medical Technology Industry In Decline?
Once a bastion for the medical device industry, Minnesota may be losing its competitive edge. … The Daily Circuit looks at the health of our state's medical technology companies, and how changing industry dynamics may have motivated the proposed Medtronic-Covidien merger (7/23).

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Editorials and Opinions

Viewpoints: Halbig Decision Is 'Ominous,' 'Major Victory For The Rule Of Law,' 'Far From Last Word'

The New York Times: An Ominous Health Care Ruling
Millions of low- and moderate-income people who signed up for health insurance with the help of federal tax-credit subsidies could find themselves without coverage or facing big premium bills if a destructive decision handed down by a federal appeals court in Washington on Tuesday is not reversed. It would be a crippling blow to the ability of the Affordable Care Act to reduce the ranks of the uninsured with grievous consequences for vulnerable customers (7/22). 

The Wall Street Journal: Upholding ObamaCare – As Written 
In Halbig v. Burwell, the D.C. Circuit Court of Appeals held that the Administration violated the Affordable Care Act by expanding subsidies to the 36 insurance exchanges run by the federal government. The plain statutory language of ObamaCare repeatedly stipulates that these credits shall flow only through "an Exchange established by the State." The 2-1 panel majority thus did not "strike down" part of ObamaCare, as liberals and the media claim. Using straightforward textual construction, the court upheld the law the President signed but it vacated the illegitimate federal-exchange subsidies he tried to sneak in via regulation (7/22).

Los Angeles Times: Administration Can’t Afford To Lose On Obamacare Subsidies
A federal appeals court in the District of Columbia shocked supporters of the 2010 healthcare law Tuesday by ruling that millions of Americans would no longer be eligible for health insurance subsidies. Shortly thereafter, a panel at the U.S. 4th Circuit Court of Appeals in Richmond, Va., came to the opposite conclusion on a similar lawsuit, upholding the subsidies. The full D.C. Circuit should follow the 4th Circuit's lead and reject the first panel's ruling, which wildly misconstrues Congress' intent (7/22). 

The Washington Post: D.C. Circuit Court Ruling On Obamacare Was Wrong – But The 4th Circuit Got It Right
First blame Congress. Generally a useful rule these days, it certainly holds when considering Tuesday’s worrying, though possibly temporary, setback for the Affordable Care Act in the U.S. Court of Appeals for the District of Columbia Circuit. Blame Democrats who pressed through a bill containing contradictory language. Blame Republicans who, in their drive for full repeal, have declined to fix the ambiguities and unintended consequences that turn up in any sizeable piece of legislation (7/22). 

USA Today: Ruling Ignores Congress’ Intent: Our View 
Obamacare supporters should hope the law has nine lives, because it may have used up another one Tuesday. A panel from the second most powerful court in the country ruled, in effect, that nearly 5 million people who got their health insurance through the federal insurance exchanges this year weren't entitled to subsidies. Obamacare's subsidies are what make coverage affordable for many of the people the law requires to buy health insurance — hence the law's name: the Affordable Care Act. Taking those subsidies away could make insurance too expensive for millions of low- and middle-income people, crippling a crucial part of the law (7/22). 

USA Today: A Victory For The Rule Of Law: Opposing View 
The D.C. Circuit's decision Tuesday morning in Halbig v. Burwell is a major victory for the rule of law. And correspondingly, the Fourth Circuit's contrary ruling hours later, in King v. Burwell, is a loss. Under the Constitution, Congress is responsible for making the law while the president must faithfully execute it. With a statute as complex as the Affordable Care Act, it's tempting for the administration to bend it for policy reasons. But, as the D.C. Circuit ruled, this is flatly illegal (Sam Kazman, 7/22). 

The Washington Post: Why Obamacare Probably Isn’t Doomed
The Affordable Care Act took a potentially serious hit today when the D.C. Circuit Court of Appeals struck down a rule that extended the law’s health-care subsidies to residents of the three-dozen states where the federal government runs a health insurance exchange. But the fact that another court of appeals upheld the same rule on the same day shows that the legal issue is very thorny and will very likely be ultimately resolved by the Supreme Court. And the administration probably will come out ahead in the end (Tom Goldstein, 7/22). 

The New York Times’ The Upshot: Rulings On Health Law Are Far From Last Word 
An appellate court ruling issued Tuesday would be very bad news for the Affordable Care Act if it became the law of the land. But it’s still a long way from a settled issue, as a second appellate decision, issued a few hours later, highlighted (Margo Sanger-Katz, 7/22).

The Washington Post: Why The D.C. Circuit Was Wrong To Eviscerate Obamacare
The country was almost out of this Obamacare mess. After years of political strife and Obama administration management failures, after an exacting legal review that included two high-profile Supreme Court cases, after broken Web sites were improved, after some people lost plans the liked, after others gained plans they would never have been able to afford, after millions of people enrolled, and after the rate of uninsured Americans dropped, the Affordable Care Act finally seemed to be finding its footing, and there were indications that the nation would finally move on (Stephen Stromberg, 7/22). 

Forbes: Halbig Court Opinion: A Victory For The Rule Of Law, But Merely A Speed Bump For Obamacare
If the IRS had never written its rule expanding the spending authority of the federal exchange, Obamacare wouldn’t have collapsed. Why? Because, over time, every state would have taken the “free” federal cash. ... The original Medicaid program, passed in 1965, was optional for the states. Most states signed up within a few years, but there were one or two holdouts. Arizona, the last holdout, set up its Medicaid program in 1982. The point is: every state now participates in Medicaid (Avik Roy, 7/23).

The Wall Street Journal: Reining In ObamaCare – And The President
A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit -- a tribunal second only to the Supreme Court -- ruled on Tuesday that the Obama administration broke the law. The panel found that President Obama spent billions of taxpayer dollars he had no authority to spend, and subjected millions of employers and individuals to taxes he had no authority to impose. The ruling came in Halbig v. Burwell , one of four lawsuits aimed at stopping those unlawful taxes and expenditures. It is a decision likely to have far-reaching repercussions for the health-care law (Jonathan H. Adler and Michael F. Cannon, 7/22). 

The Wall Street Journal: Aid Veterans Affairs By Nixing Budget Gimmickry 
The worst scandal in decades at the Department of Veterans Affairs doesn't only involve unethical staffers cooking the books on waiting times, inexcusable as that is. Woefully inadequate VA funding and budget gimmicks by multiple Congresses and administrations created the long waiting lists in the first place (Garry Augustine, 7/22).

Journal of the American Medical Association: New Expensive Treatments for Hepatitis C Infection 
Perhaps surprisingly, most media coverage of this important development in HCV treatment has not focused on the cure rates but, rather, on cost. The price of sofosbuvir is essentially $1000 per pill, or $84 000 for a standard 12-week course. The fact that pricing in the United Kingdom for a similar regimen is $54 000, and perhaps as low as $900 in Egypt and other developing countries, indicates that the pricing in the United States is a purely financial decision by Gilead and has outraged many. Indeed, some pharmacy benefit managers are calling on their clients to boycott these products until alternatives are available late in 2014. But is the pricing unfair? (Troyen Brennan and William Shrank, 7/22).

Los Angeles Times: How To Escape The Medical Care Debt Trap
An analysis this year by NerdWallet Health found that about 60% of all bankruptcies are health related. And a comprehensive study by Harvard researchers who examined a large sample of 2007 bankruptcy filings found that, "using a conservative definition, 62.1% of all bankruptcies … were medical." That research, published in the American Journal of Medicine, found that most of these "medical debtors were well educated, owned homes and had middle-class occupations" (Steve Trumble, 7/22).

The New York Times: A Dearth In Innovation For Key Drugs
There is clearly something wrong with pharmaceutical innovation. Antibiotic-resistant infections sicken more than two million Americans every year and kill at least 23,000. The World Health Organization has warned that a “post-antibiotic era” may be upon us, when “common infections and minor injuries can kill.” Even the world’s tycoons consider the proliferation of antibiotic-resistant bacteria one of the crucial global risks of our times, according to a survey by the World Economic Forum (Eduardo Porter, 7/22). 

Los Angeles Times: Can Laura’s Law Really Help The Mentally Ill? Researcher Tom Burn’s Surprising Conclusion.
Laura's Law has been an option for counties in California since 2003, but only in recent weeks have three of the most populous ones — Los Angeles, Orange and San Francisco — voted to implement it. The law — like another one in New York, Kendra's Law — allows families or officials to ask the courts to order outpatient treatment for the seriously mentally ill (Patt Morrison, 7/22). 

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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.