N.J. to get $8.8M in federal money for child health coverage

by The Associated Press, NJ.com -- New Jersey will get nearly $8.8 million in federal "performance bonus" money for its efforts to enroll more children in government health insurance programs.

U.S. Health and Human Services Secretary Kathleen Sebelius announced the award on Tuesday.

New Jersey is among 15 states being rewarded for increasing the number of uninsured children enrolled in Medicaid and making it easier for families with eligible children to get coverage.
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More small businesses are offering health benefits to workers

By Noam N. Levey, LATimes.com -- Major insurers around the country are reporting that a growing number of small businesses are signing up to give their workers health benefits, a sign of potential progress for the nation's battered healthcare system.

The increase, although not universal, has brought new security to thousands of workers, many of whom did not have insurance or were at risk of losing it.An important selling point has been a tax credit that the nation's new healthcare law provides to companies with fewer than 25 employees and moderate-to-low pay scales to help offset the cost of providing benefits. The tax credit is one of the first few provisions to kick in; much of the law rolls out over the next few years.

"We certainly did not expect to see this in this economy," said Gary Claxton, who oversees an annual survey of employer health plans for the nonprofit Kaiser Family Foundation. "It's surprising."

For insurers, the market presents a big opportunity. Nationally, three-quarters of businesses with 10 to 24 workers offer benefits. About half of those with three to nine employees provide health plans. By comparison, 99% of firms with more than 200 employees offer benefits.

Now some insurers are reporting significant jumps in coverage.

In the six months after the law was signed in March, UnitedHealth Group Inc., the country's largest insurer, added 75,000 new customers who work for companies with fewer than 50 employees. The Minnesota company called the increase notable but declined to reveal further details.

Coventry Health Care Inc., an insurer in Maryland that focuses on small businesses, signed contracts to cover 115,000 new workers in the first nine months of this year, an 8% jump.

In California, Warner Pacific Insurance Services in Westlake Village, a major servicer of insurance brokers, has seen business grow more than 10% this year, a company executive said.

And Blue Cross Blue Shield of Kansas City, the largest insurer in the Kansas City, Mo., area, is reporting a 58% jump in the number of small businesses buying insurance since April, the first full month after the legislation was signed into law.

The independent nonprofit insurer has been particularly aggressive in marketing the new tax credit, which can mean a discount of as much as 35% for very small companies with low payrolls.

"One of the biggest problems in the small-group market is affordability," said Ron Rowe, who oversees small-group sales for the insurer. "We looked at the tax credit and said, 'This is perfect.'"

Rowe said that 38% of the businesses it is signing up had not offered health benefits before.

When the law was signed, the company partnered with H&R Block to create a website for small businesses to calculate how much they can save with the tax credit.

For Bistro Kids, a small business in the Kansas City suburb of Gladstone that serves school meals made with locally grown, organic produce, the deal was too good to pass up.

"We said, 'How could we not do this?'" said Kiersten Firquain, 42, a trained chef who started the company after being appalled by the quality of the food her son was being served at school.

"The whole message of Bistro Kids is doing the right thing," she said as she watched students at Oakhill Day School dig into chili and cornbread made with local beef, cheese and corn. "We wanted to do what was right for our employees, not just for our kids."

Like other small-business owners nationwide, Firquain had been keeping a file of health insurance quotes. But every year, the prices seemed to get more out of reach. "It just wasn't realistic," she said.

Now, Firquain is offering her 10 chefs a standard individual preferred provider organization plan with a $1,000 deductible and $30 co-pays. The employees pay $67 to $212 a month, depending on age and gender.

The company's share, including the tax credit, comes to $434 a month per employee, although that may rise next year as more of Bistro Kids' chefs opt for the health plan. So far, four have signed up for benefits.

It's unclear how many businesses around the country are taking advantage of the new tax credit. National statistics will not be available until next year after 2010 tax returns are analyzed.

Many small businesses don't qualify for the tax credit, which is available to employers that have fewer than 25 full-time positions and pay an average salary of less than $50,000 a year.

And only those with fewer than 10 employees and an average salary of less than $25,000 a year can claim the full 35% credit. Employers with more employees and higher salaries can get a smaller credit.

"I'm not sure the credit is big enough to convince anyone to buy insurance that hasn't already," said Russ Childers, an insurance broker in southern Georgia. Childers said he expected about 10% of the firms he works with to qualify for some tax credit.

For many businesses, even the tax credit may not make insurance affordable at a time when the average premium for an individual health plan is more than $5,000 a year and many insurers are hitting businesses with double-digit rate increases.

That has prompted some critics of the health insurance overhaul, including the National Federation of Independent Business, to dismiss the tax credit.

Some insurers have seen a decrease in small-business sales. But in Kansas City, officials at Blue Cross Blue Shield say the credit is a major selling point.

"I hear some people saying that this tax credit is not a big deal, that most small businesses won't qualify," Rowe said. "Well, I wanted to sell to those that do."

Blue Cross Blue Shield of North Carolina, another independent nonprofit that has aggressively marketed the tax credit, also is expecting a substantial uptick in policies when it tallies its numbers next month, said Drew Narayan, the company's sales director.

Nationwide, the Kaiser survey found that 59% of firms with three to nine employees offered health benefits, up from 46% last year.

"Prices keep going up, but we are seeing insurers trying to be competitive," said Neil Crosby, Warner Pacific's director of sales. "And businesses are buying, so they must see some value."

Breasia Studios, a recording studio in Maryland, is one of those businesses.

After learning about the tax credit from a local activist, studio owner Jamal Lee got a health plan for his four employees for the first time. He said it's already making a difference.

"You get more done when people are happy," said Lee, who opened the studio five years ago. "And it feels good to look at my employees and know that I'm helping to provide something that they really need."
Copyright © 2010, Los Angeles Times

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Feds fire warning shot to health insurers

by CNN.com/health -- Health insurance companies trying to bump up rates by more than 10 percent will have to answer to federal regulators, according to a new plan announced by Health and Human Services Secretary Kathleen Sebelius Tuesday. The proposed rule explains how the government will oversee insurers as required by the massive health care bill – the Affordable Care Act – that was signed into law this spring.

After 2011, regulators will decide on a state-by-state basis which rates will be reviewed.The process will determine which rate hikes are “unreasonable,” a tricky definition since “a 10 percent increase by a company that’s not had a rate increase in five years and is looking at a narrow profit margin, is not necessarily the same as a company that’s raised rates three years in a row and is looking at fat profits,” Sebelius said. “We decided we would start somewhere and we went with 10 percent, not as a definition of unreasonable, but as a figure that would bring scrutiny.”

As part of the scrutiny, proposals for large rate hikes will be posted online, along with each company’s justification for the increase. A significant number of plans are likely to be affected; according to HHS, hikes greater than 10 percent make up the majority of rate increases in the individual market over the past three years.

The new federal requirement does not replace but adds a layer to various state laws regulating insurers. According to HHS, 43 of 50 states currently review health insurance rates. In states without “an effective process,” HHS will conduct the review, said spokeswoman Jessica Santillo.

While federal regulators won’t have the power to block rate increases, insurers whose rate hikes are deemed “unreasonable” could be barred from insurance “exchanges” – the planned marketplaces where many companies and consumers will purchase coverage plans, starting in 2014.

The online postings will also discourage sharp hikes by making consumers better informed, Sebelius said.

Insurance companies and the public have 60 days to comment on the rules, before the new regulations take effect.

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N.J. lawmakers approve bill pushing Gov. Christie to submit federal application for family planning services

By Susan K. Livio, NJ.com -- Thousands of working women who lack health insurance would gain access to subsidized family planning services under a bill that won final legislative passage today with some unexpected bipartisan support.

In August, Gov. Chris Christie, a Republican, vetoed an earlier version of this Democrat-sponsored bill, saying he refused to spend money that had not been part of the June budget agreement with the Legislature. But it may have a chance of becoming law this time because the state would not have to spend any money before July 2012, said Sen. Jennifer Beck (R-Monmouth) one of the two Republican senators who voted yes today."The people we are talking about are working women who are looking to plan their pregnancies, and we do have some concern that a lack of access to contraception may lead to unwanted pregnancies," Beck said, who voted yes along with Sen. Diane Allen (R-Burlington). According to the bill, the state would need to put up $1.1 million in order to qualify for $15.1 million from the U.S. Centers for Medicare and Medicaid Services. The money would be used to provide birth control, cervical exams and other family planning services to women earning as much as twice the poverty rate — $29,140 for a family of two — who ordinarily would make too much money to qualify for Medicaid.

Beck said if the federal government accepts the application, the aid would not be available until July 2012. "That’s a long time to wait. I think we need to work with the governor’s office on this issue in the coming budget cycle," she added.

The bill, sponsored by Sen. Loretta Weinberg (D-Bergen) passed, 26-12. Christie spokesman Kevin Roberts said he would not comment on the bill before the governor’s staff reviews it.

Marie Tasy, executive director for New Jersey Right to Life, urged Christie to veto it because so many clinics are operated by Planned Parenthood. She said it would "result in the lucrative expansion and promotion of Planned Parenthood’s abortion business in New Jersey, all to the detriment of women and children’s lives and health, and all paid for by New Jersey taxpayers."

Christie also vetoed a bill to restore $7.4 million in grant shared by 58 clinics, many operated by Planned Parenthood.

© 2010 NJ.com. All rights reserved.

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Double bind on health reform

by Sarah Kliff, Politico.com -- Republican lawmakers on the state level are largely against the new health reform law—but they aren’t against all of the behemoth legislation.

Virginia dominated headlines this week when a federal judge ruled the individual mandate to buy insurance unconstitutional on Monday. Much less noticed: the very next day, a task force appointed by Republican Gov. Bob McDonnell recommended that the state implement a health insurance exchange earlier than federal guidelines require.

“I was pleased with the ruling. I don’t think the government can mandate you have to buy a product,” says Virginia Republican State Sen. Chris Jones. But Jones also sees the value in moving forward on implementation—he sits on the state’s health task force and is adamant Virginia run its own exchange.
“We have to be prudent and plan for implementation as it is before us today,” he tells POLITICO. “It’s the prudent thing we have to do as public servants.”

In Minnesota, outgoing Gov. Tim Pawlenty has repeatedly and vigorously opposed any participation in health reform programs, but one of his own state departments—the Management and Budget Office—is quietly receiving benefits through health reform’s Early Retiree Re-Insurance Program.

And in Alabama, Gov.-elect Robert Bentley, a Republican, said he supports Alabama creating its own health insurance exchange—a key part of the new law. He said this even as his state is party to the 20-state challenge to health reform hearing oral arguments in Florida tomorrow.

The exchanges, which will be web sites similar to Orbitz or Expedia where people can buy insurance, emphasize the GOP-friendly concepts of consumer choice and competition. Republicans are embracing them quietly even as they loudly fight other aspects of the law in federal court.

“Obviously the governors and attorney generals involved with these lawsuits are responding to the politics of this and pursuing a legislative course of action,” says Timothy Jost, a law professor at Washington and Lee University. “My experience with the state officials who are in fact implementing this is that they are civil servants in the best sense of the word. They’re government officials who understand this is the law of the land, and they do the best they can with their state.”

Republicans trumpeted the federal court ruling that struck down health reform on Monday. The judge declared the individual mandate—which requires the purchase of government-approved insurance—unconstitutional. In the closely watched suit brought by Virginia Attorney General Ken Cuccinelli, District Judge Henry Hudson found that the mandate “exceeds the constitutional boundaries of congressional power.”

"The individual mandate at the heart of Obamacare puts the federal government in the business of forcing you to buy health insurance and taxing you if you don't. This is unwise, unaffordable, and as we have argued all along, unconstitutional," said Speaker-elect John Boehner.

But at the state level, the picture looks markedly different. In Boehner’s home state of Ohio, for instance, a health reform stakeholders forum has been meeting for months now and implementation is well underway. And all states, regardless of their politics, have accepted some form of Affordable Care Act grants, according to HealthCare.gov. Thirty-three states have taken either legislative or executive action to implement health reform, according to the National Association of State Legislatures.

“For many conservative states, there’s an anxiety that if they don’t do something it will be implemented for them by the federal government, and they’re not comfortable with that,” says Melissa Boudreault, director of Dell’s State Health Services division. Boudreault has spent months now consulting with states on reform implementation. “When we have conversations with them, they want to make this politically palatable. At the end of the day, it comes down to them saying ‘I think we’d rather control our own destiny.’”

The Obama administration expects the majority of states to participate in one of the most crucial health reform programs: the state-based health exchanges, where individuals and small groups can purchase coverage beginning in 2014. Forty-eight states applied for, and received, $1 million exchange planning grants in August. Of the two states did not apply, one will change course: Minnesota governor-elect Mark Dayton has indicated he would pursue the grant opportunity that predecessor Tim Pawlenty declined.

“We’re currently working with 48 of the 50 states who are all engaging in the process of figuring out where they want to go on exchanges,” Joel Ario, who oversees health exchanges for HHS’ Office of Consumer Information and Insurance Oversight, said on a Tuesday conference call for National Conference of State Legislators.

For their part, Republican governors walk a tightrope between preparing for the implementation of health reform while also rallying against it.

Perhaps the most striking contrast between court challenges and state implementation is in Virginia, where McDonnell has walked a tightrope, opposing health reform one day then implementing it the next.

McDonnell has been an outspoken critic of the health reform law. The day after the federal health reform law passed, he signed the Virginia Healthcare Freedom Act, the first of many state laws prohibiting the mandated purchase of health insurance. The law laid the groundwork for Cuccinelli’s legal challenge.

McDonnell came out strongly in support of the Monday Court ruling. “This decision sets the correct limits on federal power in favor of individual liberty, and supports the critical tenants of federalism enshrined in the U.S. Constitution,” the governor said in a Monday statement.

But at the same time, McDonnell has more quietly gone about the business of implementing health reform. In August he appointed a task force to the Virginia Health Reform Initaitive, which would oversee the work of implementing the federal law.

"Every Virginian needs access to affordable health care. The challenge is how to provide that access in an economically responsible manner,” McDonnell said in an August statement appointing the task force. “The make-up of these taskforces includes a wide array of expertise and opinions from across the Commonwealth. The taskforces are comprised of individuals who recognize the need for Virginia to lead the nation by establishing a responsible model for health reform and will work to the success of this initiative, both professionally and personally."

That taskforce came out Tuesday with an 85-page report advocating that the state move quickly to implement the Affordable Care Act.

“Since so many recommendations hold promise to improve quality, lower cost, or make insurance and care more affordable and accessible, opportunities for ‘early adoption’ should be prudently explored and acted upon,” the task force wrote.
© 2010 Capitol News Company, LLC

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Judge Voids Key Element of Obama Health Care Law

By Kevin Sack, NYTimes.com -- A federal judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first judge to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.

The judge, Henry E. Hudson of Federal District Court in Richmond, said the law’s requirement that most Americans obtain insurance exceeded the regulatory authority granted to Congress under the Commerce Clause. Judge Hudson, who was appointed by President George W. Bush, declined the plaintiff’s request to suspend the act’s implementation pending appeal, meaning there should be no immediate effect on its rollout.

But the ruling seemed likely to create confusion among the public and to further destabilize political support for a law that is under fierce attack from Republicans in Congress and in many statehouses. Party leaders, including the incoming House speaker, Representative John A. Boehner of Ohio, quickly used the opinion to reiterate their call for repealing the law.

In a 42-page opinion, Judge Hudson wrote: “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.”

Allowing Congress to exert such authority, he said, “would invite unbridled exercise of federal police powers.”

Compelling vehicle owners to carry accident insurance, as states do, is considered a different matter because the Constitution gives the states broad police powers that have been interpreted to encompass that. Furthermore, there is no statutory requirement that people possess cars, only a requirement that they have insurance as a condition of doing so. By contrast, the plaintiffs in the health care case argue that the new law requires people to obtain health insurance simply because they exist.

The insurance mandate is central to the law’s mission of covering more than 30 million people who are uninsured. Insurers argue that only by requiring healthy people to have policies can they afford to pay for those with expensive conditions. But Judge Hudson ruled that many of the law’s other provisions could be severed legally and would survive even if the mandate is invalidated.

Judge Hudson is the third district court judge to reach a determination on the merits in one of the two dozen lawsuits challenging the health care law. The other judges, in Detroit and Lynchburg, Va., have upheld the law. Lawyers say the appellate process could last another two years before the Supreme Court settles the dispute.

The opinion by Judge Hudson, who has a long history in Republican politics in Northern Virginia, continued a partisan pattern in the health care cases. Thus far, judges appointed by Republican presidents have ruled consistently against the Obama administration, while Democratic appointees have found for it.

That has reinforced the notion — fueled by the White House — that the lawsuits are as much a political assault as a constitutional one. The Richmond case was filed by Virginia’s attorney general, Kenneth T. Cuccinelli II, a Republican, and all but one of the 20 attorneys general and governors who filed a similar case in Pensacola, Fla., are Republicans.

The two cases previously decided by district courts are already before the midlevel courts of appeal, with the Detroit case in the Sixth Circuit in Cincinnati and the Lynchburg case in the Fourth Circuit in Richmond.

The Justice Department, which is defending the statute, is considering whether to appeal Judge Hudson’s ruling to the Fourth Circuit, which hears cases from Virginia and four other states. That would leave that court to consider opposite rulings handed down over two weeks in courthouses situated only 116 miles apart.

Administration officials emphasized that Judge Hudson’s opinion was just one among several and said they were pleased he had not stopped the law from going into effect.

“We are disappointed in today’s ruling,” said Tracy Schmaler, a Justice Department spokeswoman, “but continue to believe — as other federal courts in Virginia and Michigan have found — that the Affordable Care Act is constitutional.”

Ms. Schmaler added, “We are confident that we will ultimately prevail.”

The administration acknowledges that if the insurance requirement falls before taking effect in 2014, related changes would necessarily collapse with it, most notably provisions that would prevent insurers from denying coverage to those with pre-existing conditions or charging them discriminatory rates.

But officials said other innovations, including a vast expansion of Medicaid eligibility and the sale of subsidized insurance policies through state-based exchanges, would withstand even a Supreme Court ruling against the insurance mandate.

Some state officials said Monday’s ruling would reinforce calls by many Republican governors and lawmakers to slow down its implementation. “I think you might see some air taken out of the balloon nationwide,” said Jason A. Helgerson, the Medicaid director in Wisconsin, where Republicans are about to take control of both the executive and legislative branches.
Judge Hudson, who was previously best known for sentencing the N.F.L. quarterback Michael Vick to 23 months for his involvement in a dog fighting ring, had telegraphed his leanings in a series of hearings and preliminary opinions. But the ruling was nonetheless striking given that only nine months ago, prominent law professors were dismissing the constitutional claims as just north of frivolous.

The case centers on whether Congress can use its powers under the Commerce Clause to compel citizens to buy a commercial product — namely health insurance — for the purpose of regulating an interstate economic market. Absent that authority, the administration argued, Congress could use the taxation powers granted by the Constitution to justify the insurance requirement, because the fine for not obtaining coverage will be assessed as an income tax penalty.

While commending Congress’s “laudable intentions,” Judge Hudson shot down both arguments.

“At its core,” he wrote, “this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health insurance coverage — it’s about an individual’s right to choose to participate.”

The ruling is a political score for Mr. Cuccinelli, who filed the lawsuit on his own rather than joining the Pensacola case. It upstages a major hearing in Florida scheduled for Thursday.

“This case is not about health insurance, it is not about health care,” Mr. Cuccinelli said at a news conference in Richmond. “It is about liberty.”

Mr. Cuccinelli, who was elected in 2009, said he had filed on his own because Virginia passed a law this year aimed at nullifying the federal insurance requirement, giving the commonwealth a distinct constitutional claim. Others attribute the strategy to political ambition, suggesting that Mr. Cuccinelli did not want to share the spotlight and knew he could exploit the accelerated pace of judging in Richmond’s so-called “rocket docket” to raise his profile.

Mr. Cuccinelli filed the lawsuit minutes after President Obama signed the law on March 23 and has been discussing the case on cable television ever since. By late afternoon Monday, he had already posted campaign fund-raising advertisements online that cited his victory.

Even before Monday’s ruling, Mr. Cuccinelli and Gov. Bob McDonnell of Virginia, also a Republican, were seeking an agreement with the Justice Department to bypass the United States Circuit Court of Appeals and file for expedited review by the Supreme Court. That would have the effect of further marginalizing the Pensacola case. The Supreme Court rarely takes such requests, and the Justice Department has not publicly expressed an opinion.

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