Health reform may expose immigrant status of millions


9:29am EDT

By Salimah Ebrahim

WASHINGTON (Reuters) – As she was ushered into surgery eight years ago, Paula was confident that doctors at Washington’s Howard University Hospital would find the cancer that had been growing in her right breast for months. She was less certain about where she would wake up the next day.

“I felt scared because of the stories in other states … It was always in the back of my mind that a doctor, or an immigration officer dressed as a doctor, could take me,” said Paula, 60, of the fear that she would be exposed as an undocumented immigrant and deported.

Still cancer-free, Paula, who asked to have her last name withheld, waits in the tiny chapel of La Clinica Del Pueblo, a community health clinic in Washington, DC, where she receives routine care.

She and other illegal immigrants worry that their ability to access healthcare at facilities like La Clinica will become even more risky once President Barack Obama’s healthcare law takes effect. The reform requires all U.S. citizens and permanent residents to obtain health insurance, either through the government-run Medicaid program for the poor or by purchasing private insurance via state exchanges starting in 2014.

It also bars undocumented immigrants from participating. As more low-income citizens receive insurance, the fear is that many of the estimated 12 million undocumented immigrants will be easier to identify just because they lack coverage.

“It’s my 3 a.m. nightmare,” said Alicia Wilson, La Clinica’s executive director. “While we do not collect information about the immigration status of our patients, the fact that they will be uninsured could be taken as ‘code’ for also being undocumented.”

Paula is one of thousands of undocumented immigrants who benefit from the DC Health Care Alliance, one of the most generous taxpayer-funded health plans in the country for patients regardless of income or immigration status. Looking out at La Clinica’s crowded waiting room, she firmly clasps the card that gives her membership in the program.

“This is the card that opens a lot of doors … This clinic has protected us and it is helping us to get the help we need regardless of the risks,” said Paula, who entered the United States from Mexico on foot nearly 10 years ago.

In recent years, funding for both the clinic and the healthcare alliance has come under fire from conservative groups who oppose using tax dollars to pay for the care of illegal immigrants, as local governments already struggle with budget cuts in a weak economy.

Wilson and other advocates see that opposition gaining momentum once the healthcare law takes effect, particularly in states where anti-immigration sentiment runs high.


The 4 million U.S.-born children of such immigrants are also vulnerable when policies on immigration and healthcare collide.

According to the Urban Institute, nearly 1 in 10 U.S. families with children are of “mixed status,” with at least one parent who is undocumented and one child who is a citizen.

These children are likely to be eligible for insurance, including the government-sponsored Children’s Health Insurance Program (CHIP). But many remain out of the system because of their parents’ dread that the undocumented spouse will be identified and deported, since U.S. immigration authorities, part of the Department of Homeland Security, must verify a child’s residency status.

“You’ve got a community that’s caught in the nexus, the crossroads of two different laws,” said Jennifer Ng’andu, a lawyer and deputy health policy director at the National Council of La Raza – a national Latino civil rights and advocacy group.

According to Ng’andu, 8 percent of children from families where both parents are U.S. citizens don’t have insurance, compared with 25 percent in households where children live with at least one undocumented parent.

Robert Rector, a senior researcher at the conservative Heritage Foundation, said that making it easier for such families will set an unwelcome precedent that the country cannot afford, even if their children were born within its borders.

“These kids are very expensive. They are getting on average $10,000 a year in public education and welfare and other services that their parents are really going to never earn enough to pay for,” Rector said. “If you say this child was born in the U.S. and therefore gets to stay and we’re not going to do anything about it, you’re kind of creating an unlimited open avenue for future illegal immigration.”


Elisabeth, 26, an undocumented immigrant from Mexico City, is a single mother with three children, two of them U.S. citizens. Her worry that government authorities might split up her family is present each time she takes them to the doctor.

“I have a fear of hospitals, questions about my status and am always worried that the police will intervene, that my children will be taken away from me,” she said. “I live in the fear with every document I fill out, that it all goes to immigration.”

Elisabeth, who also asked for her full name to be withheld, said her own health has been compromised as a result. For two years she suffered in silence as a victim of domestic violence, enduring repeated beatings by her then partner and having her ribs broken while pregnant with her youngest child. The couple has since separated.

The healthcare she has received – such as giving birth to her children in the hospital – has been organized by Mary’s Center, another community clinic in the Washington area, and through the DC Health Care Alliance.

While immigrants do have legal protections that allow them to receive care from hospitals and other providers without endangering their status, even the slightest chance of exposure can be terrifying. In the first half of 2011, 46,486 who claimed to have at least one U.S. citizen child were deported, U.S. Immigration and Customs reported.


Ezekiel Emmanuel, a senior Obama healthcare advisor, acknowledges the concern that the law may expose immigrants.

“We were all aware of it,” he says. “Is that a negative tradeoff for getting universal coverage? Yes … It’s a visible consequence that we couldn’t do anything about given the politics of the situation.”

As the political debate over healthcare becomes increasingly focused on cutting costs, experts expect more scrutiny on the fate of undocumented immigrants.

“We’re in a time of fiscal austerity where you have 8 percent unemployment among predominantly legal citizens and yet you continue to have a system that openly invites illegal immigrants to come and stay,” says the Heritage Foundation’s Rector. “The first solution to the healthcare costs is to enforce the law (barring employment to illegal immigrants).”

Some health policy experts disagree, saying U.S. citizens would benefit even more if the health law included undocumented immigrants within its requirements.

Even when immigrants have insurance, their health costs amount to only half or two-thirds of the expenditures seen with U.S.-born citizens, according to a 2009 study by Leighton Ku, director of the Center for Health Policy Research at George Washington University.

“Many people think immigrants are overusing and overtaking emergency rooms, yet all the data shows they use emergency rooms less than citizens. They use everything less than citizens,” he said.

Broadening the pool of insured people to include those who use less health care means a larger population can help shoulder the costs of sicker Americans. State health insurance exchanges, which will allow individuals to buy subsidized health plans starting in 2014, exclude illegal immigrants, leaving out millions of young, healthy people who could otherwise spread the risk.

Health insurers are seeking a way around the problem, according to a senior official at one of the largest U.S. insurance companies.

“Here you’ve got a law which says everybody has to have coverage, but you have classes of people without access to coverage,” the official told Reuters on condition of anonymity. “Washington makes it very difficult for us to do the right thing.

“Obviously, we’re capitalistic and we want to make money, but at the same time we want the health system to work better, and the health system works better when people have access to coverage.”

An estimated 600,000 undocumented workers have private insurance plans through employer-sponsored programs. But they may lose out if their employers can’t manage those same plans within the state health insurance exchanges, or if premiums rise. The Restaurant Opportunities Center of Los Angeles, which provides affordable health coverage to 75,000 undocumented restaurant workers, is trying to figure that out.

“It’s not merely that they are not eligible for the subsidies, but that they cannot even get a policy from the health insurance exchanges even if they wanted to pay the full cost themselves,” Ku said. “If you’re an undocumented alien, we still let you go to the store and buy cereal or go to a car dealer and buy a car.”

(Editing by Michele Gershberg and Prudence Crowther)

Poll shows most Americans favor Medicaid expansion

Poll shows most Americans favor Medicaid expansion

9:46am EDT

By David Morgan

WASHINGTON (Reuters) – Most Americans back the idea of extending health coverage to their low-income neighbors through the government’s Medicaid program, unless it means higher costs for their own state, according to a new poll.

In a survey released on Tuesday by the nonpartisan Kaiser Family Foundation, 67 percent of respondents gave a favorable view of President Barack Obama’s healthcare reform provision to “expand the existing Medicaid program to cover more low‐income, uninsured adults.”

Support for the idea, which would expand coverage to as many as 16 million uninsured Americans, broke sharply along partisan lines. Nearly nine out of 10 survey participants who said they were Democrats and two-thirds of independents backed the expansion. Six out of 10 Republican participants said they opposed it.

Support dropped to 49 percent when poll participants were asked whether they would like to see Medicaid expanded in their home states, and a slight majority of 52 percent preferred maintaining the status quo when pollsters suggested an expansion could cost their states more money.

The results of the poll of 1,227 adults, conducted in July, have a 3 percentage point margin of error.

Medicaid, which is jointly funded by the federal and state governments and overseen by Washington, currently covers only narrowly defined groups of poor people in most U.S. states, including parents and pregnant women.

Obama’s healthcare law, which was upheld as constitutional last month by the U.S. Supreme Court, would expand Medicaid to cover people with incomes of up to 133 percent of the poverty line. Between 90 percent and 100 percent of the cost of expanded coverage would be borne by the federal government.

The high court ruling gave states the ability to opt out of the Medicaid expansion. Several Republican governors have since vowed to do just that while deriding the plan as a costly expansion of federal bureaucracy.

The governors insist that the expansion will mean higher costs for states and lead to higher taxes or reduced funding for other programs such as education.

Proponents of reform say the Medicaid expansion would ultimately save money for states, while also saving lives by providing access to healthcare for those who need it.

(Editing by Leslie Adler)

McKesson Settles Medicaid Price Fixing Claims,0,6072141.story

McKesson settles Medicaid drug price fixing claims

Illinois to get $10M in $151M deal with 30 states


11:45 AM CDT, July 27, 2012


U.S. drug wholesaler McKesson Corp. has agreed to pay $151 million to settle state claims that it inflated pricing information for over 1,400 brand name drugs, causing Medicaid to overpay for the drugs.

New York Attorney General Eric Schneiderman said the settlement resolves claims by 30 states that McKesson violated state and federal false claims acts. New York and California led negotiations for the states, Schneiderman said in a statement on Friday announcing the settlement. Illinois also is part of the settlement.

Kris Fortner, a spokesman for San Francisco-based McKesson, did not immediately respond to requests for comment. McKesson denied wrongdoing when it settled a similar case with the federal government in April. At that time, it agreed to pay $190 million over the federal portion of the Medicaid costs.

Medicaid, a health care program for people with low incomes, is jointly funded by the federal government and states.

In his statement, Schneiderman said McKesson reported inflated pricing data to First DataBank, a publisher of drug prices that most state Medicaid programs use to set payment rates for pharmaceutical reimbursement.

McKesson marked up prices by 25 percent on brand name prescription drugs when reporting to First DataBank, although those prices did not reflect what the company actually charged for the drugs, court papers said.

New York will receive $64 million of the $151 million in restitution, Schneiderman said, more than any other state. Illinois will receive $10 million, according to a press releasr from Attorney General Lisa Madigan.

“This settlement holds McKesson accountable for attempting to make millions of dollars in illegal profits,” Schneiderman said in the statement.

California will receive more than $23 million, according to California Attorney General Kamala Harris. “We cannot allow dollars meant for patients to be diverted to inflate corporate profits,” Harris said in a statement.

Federal and state governments have recovered more than $2 billion from drug companies alleged to have reported inflated pricing information, U.S. Attorney Paul Fishman in New Jersey, who announced the federal settlement, said in April.

McKesson reported fiscal first-quarter earnings Thursday well above forecasts, helped by cost cuts and lower-than-expected taxes, but its revenue came in below Wall Street projections.

McKesson rose 62 cents to $92.88 in late morning trading.

The case is U.S., ex rel. Morgan v. Express Scripts Inc et al, U.S. District Court, District of New Jersey, No. 05-01714.


Revenues recover but states still tight-fisted

Lisa Lambert


11:18 PM CDT, June 11, 2012


(Reuters) – States are remaining tight-fisted over spending even as their revenues are expected to top the levels seen before the height of the recession, unnerved by the clouds over the U.S. and global economies.

For the upcoming 2013 fiscal year, total U.S. state revenues will increase by $27.4 billion, or 4.1 percent, to reach $690.3 billion. General fund spending, however, will rise by only $14.6 billion, or 2.2 percent, according to a survey of governors’ budgets released on Tuesday.

Tax collections, the largest source of revenue, will likely rise 4.8 percent to $556.6 billion, according to the survey, conducted by the National Governors Association and National Association of State Budget Officers.

“It’s a reflection of the uncertainty that’s going on,” said Scott Pattison, executive director of the state budget officers’ organization. “It shows very cautious budgeting on the part of governors.”

For fiscal 2013, which for most states begins on July 1, state revenues will likely be $10 billion greater than in fiscal 2008, the last year before state revenues collapsed under the combined pressures of the housing downturn, financial crisis and recession, according to the report. States had to slash spending, hike taxes and turn to the federal government for help.

All states except Vermont are required to end their fiscal years with balanced budgets, which means that, unlike the federal government they cannot operate at a deficit.

The U.S. economic recovery that officially began in 2009 has filtered down to states’ coffers only recently.

Altogether, 39 states are pushing up spending in fiscal 2013, although 25 will likely spend less than before the recession. Total state spending will be 0.7 percent below the $687.3 billion of expenditures in fiscal 2008.

But the current surge in revenues is ebbing, according to the Rockefeller Institute of Government. At the same time, voters show no appetite for further tax hikes. That leaves states with little room to fight new threats such as unemployment, a stalling recovery, or turmoil in Europe.

The U.S. Congress has scheduled cuts of up to $1.2 trillion affecting states as part of last summer’s deficit deal. Also, federal lawmakers often find savings by cutting grants sent to states, said Dan Crippen, executive director of the National Governors Association.

“There’s at least as much uncertainty in the public sector as in the private sector and that’s deterring governors from doing much,” he said, adding that the Supreme Court decision on the national healthcare law due this month is obscuring their outlook, as well.

For fiscal 2013, states have closed or are closing gaps equal to $30.6 billion, according to the report. That’s less than half the $64.5 billion in budget gaps they closed in fiscal 2012. The most popular method for balancing budgets is targeted cuts, followed by reducing funding for local governments.


Medicaid, the healthcare program for the poor, is consuming larger shares of the increased spending by states. As part of the 2009 economic stimulus plan, the federal government pitched in extra funding for the program, which the states operate with partial reimbursements from the U.S. government. Now, that money is gone and states are having to cover more of the program’s costs.

State spending on Medicaid rose 20.4 percent in fiscal 2012, and federal spending dropped 8.2 percent. The projected rate of growth for states is much slower for fiscal 2013, 3.9 percent.

“Despite the recovery, when you would expect Medicaid case loads to go down, Medicaid costs continue to go up,” Crippen said, noting large numbers of long-term unemployed and discouraged workers have kept demand high. “Healthcare is still the story, still the challenge.”

(Editing by Leslie Adler)

Copyright © 2012, Reuters

Molina, Centene shares soar on Ohio Medicaid contract wins

Molina, Centene shares soar on Ohio Medicaid contract wins

7:56pm IST

(Reuters) – Shares of Molina Healthcare Inc (MOH.N: Quote, Profile, Research) and Centene Corp (CNC.N: Quote, Profile, Research) spiked in early Friday trade after the health insurers won contracts to continue as Medicaid plan providers in the state of Ohio.

Molina and Centene were among those that protested in April after they did not figure among the five plans that were initially selected to service the state’s Medicaid members.

Molina shares have nearly halved in value since then. Much of the decline was due to the company withdrawing its 2012 earnings forecast on Wednesday, as the costs of a Texas Medicaid plan outstripped premium revenue.

“Retaining the Ohio contract is a huge deal for Molina, since the state represented 25 percent of their earnings last year, and it’s not insignificant for Centene either,” Citigroup analyst Carl McDonald said in a note to clients.

In April, the two companies had lost the Medicaid contract in Ohio for 2013 to peers Aetna Inc (AET.N: Quote, Profile, Research), UnitedHealth Group (UNH.N: Quote, Profile, Research) and three private companies.

At the time, analysts had estimated that Centene would take a hit of 25 cents per share.

Aetna and privately held Meridian Health Plan have now been dropped from the contract, analysts said, adding that they expect both companies to protest the latest decision.

“We believe that there could be more legal action on the horizon before this award is implemented,” Barclays analyst Joshua Raskin said in a note to clients.

Aetna and Meridian could not immediately be reached for comments.

Molina shares soared 26 percent to $22.40, while Centene rose 11 percent to $36.45 in morning trade on the New York Stock Exchange.

(Reporting by Balaji Sridharan and Esha Dey in Bangalore; Editing by Roshni Menon)

States crack down on prescription-drug “doctor shopping”

Wed, May 30 2012

By Mary Wisniewski

CHICAGO (Reuters) – When a new patient comes into Dr. Shawn Jones’ office in Paducah, Kentucky complaining of pain and asks for a specific drug without talking about other symptoms, Jones gets suspicious.

“The first thing they say is they’re in horrible pain and they need pain medicine,” said Jones. “The other thing that gives it away is they want to tell you what works – they tell you they want Percocet. They don’t talk about their symptoms – they don’t say, ‘Oh, two weeks ago I hurt my back.'”

These are the types of red flags that can send Kentucky doctors to check a state database to see if a patient is “doctor shopping” for addictive painkillers.

Prescription drug abuse kills more people a year in the United States than cocaine and heroin combined, according to the Centers for Disease Control. A CDC report last year said 15,000 people died as a result of overdoses of prescription painkillers in 2008 – more than three times the number in 1999.

Kentucky is a hot spot. Nearly 1,000 people in the state died from prescription drug overdoses in 2010, or about three a day, ranking it among the top states for such deaths.

In America as a whole, about 12 million people aged 12 and older reported non-medical use of prescription painkillers in 2010.

Abusers and dealers typically get drugs by finding doctors willing to prescribe them, forging prescriptions, theft from pharmacies or individuals, or buying from “pill mills” — storefront clinics that sell painkillers for cash up front.


State databases such as one used in Kentucky are designed to address the first problem — to alert prescribers that someone may be abusing drugs or diverting them for illegal sale.

Forty-three states now have databases to keep track of who is getting prescriptions for powerful pain relievers such as oxycodone, Vicodin and Opana.

Pharmacists enter prescriptions for controlled substances into the database, so prescribers can see if patients are getting pills at multiple locations.

Another five states have passed laws to create databases, but have not yet implemented them. Missouri and New Hampshire do not yet have such laws, though they have been introduced in the legislatures, according to Sherry Green, CEO of the National Alliance for Model State Drug Laws. There is no national database, though more states are sharing information.

For some doctors, running a “PMP” — shorthand for a Prescription Monitoring Program report — has become as normal a part of seeing new patients as measuring blood pressure.

But the programs have not been without controversy, with a major issue being whether doctors should be required to check the database when prescribing addictive medicine, or whether this should be left to their discretion, said Green.

Some doctors have expressed fears that PMPs could breach patient confidentiality and interfere with needed treatment of pain or could be used against doctors who need to prescribe a lot of pain medicine.

Doctors also object to proposals they see as putting law enforcement above health care. Citing privacy concerns, the Kentucky Medical Association fought successfully against a provision that would have moved the state’s database to the Attorney General’s office, the state’s top legal officer.


In Kentucky, fewer than a third of prescribers have an account with the state’s PMP program. However, a new state law, which will take effect on July 12, makes it mandatory to run a PMP for a new patient getting certain kinds of medicine. Nine other states have passed laws that require doctors to access the PMP database under certain circumstances.

“Before we can ever address the prescription-drug problem … one of the things we have to do is to make sure we have full use of the tools we have,” said Van Ingram, executive director of the Kentucky Office of Drug Control Policy.

Enforcement is up to state medical boards and state systems vary. But most allow doctors and pharmacists to access information from neighboring states – something that helps address the problem of abusers driving over state lines to find a willing doctor.

Improved technology, with a push by the National Association of the Boards of Pharmacy, is helping more states share data.

Doctors and pharmacists who suspect a patient is diverting can alert police. “If you recognize someone is a doctor shopper, you report it to the state police diversion agent,” said Sarah Melton, a clinical pharmacist in Virginia. “I have him on speed dial.”

Another issue for doctors is time, so states are trying to increase database speed so that doctors can get information while a patient is still in the office. About a dozen states allow doctors to delegate people to look up information.

Many states allow law enforcement to access the system – in limited circumstances, and a case must already be under investigation for officials to run a PMP report.

“You can’t just pick someone out of the phone book and run them,” said John Burke, president of the National Association of Drug Diversion Investigators and commander of the Drug Task Force in Ohio’s Warren County.


Doctors need to strike a balance between treating people who genuinely need pain medication, and making sure it doesn’t go to people who don’t, said Samuel Hughes Melton, the husband of Sarah Melton and the president of a Virginia health clinic.

He used a PMP report to discover that a long-time patient had picked up an opiate from another doctor, and had also obtained a prescription for benzodiazepine. The two can be deadly if combined.

“I was able to confront him in the exam room,” Melton said. “I was able to use that information and nudge him into treatment for substance abuse.”

There is some evidence that the databases are leading to the prescribing of fewer addictive medicines.

According to a study by the emergency department of the University of Toledo’s College of Medicine, doctors or pharmacists who reviewed state prescription drug data changed how they managed cases 41 percent of the time.

The study found that 61 percent prescribed either no opioid medications, or less than originally planned, while 39 percent decided to provide more.

“I know a number of emergency-room physicians tell us how much they appreciate the system to discriminate between real patients with real injuries and those who just want drugs,” said Danna Droz, the administrator of Ohio’s PMP.

Jones, the president of the Kentucky Medical Association, said doctors and pharmacists needed more education on abuse and diversion, as abusers become more sophisticated at fooling professionals.

He said he once got a call from a pharmacist questioning a prescription for 90 Percocet pills – when the pharmacist knew Jones rarely prescribed more than 20 pills at a time.

The prescription was forged. Jones reported it to police and the phony patient was arrested.

(Reporting By Mary Wisniewski; Editing by Greg McCune and David Brunnstrom)

UPDATE 1-Coventry profit just misses analysts’ target

UPDATE 1-Coventry profit just misses analysts’ target

8:33am EDT

* Q1 EPS 62 cents vs 63-cent Street view

* Medicaid costs weigh

* Follows Aetna’s Q1 miss on Thursday

April 27 (Reuters) – Insurer Coventry Health Care Inc reported quarterly profit that was slightly lower than expected on Friday, hurt by high costs in its Medicaid plans for low-income Americans.

While overall enrollment in Coventry’s Medicaid plans nearly doubled, costs for a plan in the state of Kentucky were well above premiums.

“Unfortunately, concern over the higher costs in Kentucky will overshadow the otherwise solid results this quarter,” Goldman Sachs analyst Matthew Borsch said in a research note.

Shares of Coventry, a mid-sized health insurer, rose 2 cents to $32.70 in light pre-market trading.

Coventry’s report comes a day after larger rival Aetna Inc’s profit missed Wall Street’s target and said healthcare-claim costs may be about to rise, sending its shares tumbling.

The quarterly earnings of UnitedHealth Group Inc and WellPoint Inc, the two biggest health insurers, exceeded expectations, and both raised their outlooks for the year.

Coventry’s first-quarter net income rose to $170.7 million, or $1.20 per share, from $110.2 million, or 73 cents per share, a year earlier.

Results in the quarter got a big boost from a release of reserves related to its Medicare plans for seniors. Excluding the reserve release, earnings of 62 cents per share were a penny shy of the average estimate of analysts, according to Thomson Reuters I/B/E/S.

Revenue grew 21 percent to $3.69 billion, about $200 million ahead of estimates. Its membership jumped about 16 percent to 5.26 million, as Medicaid enrollment nearly doubled to 924,000.

Coventry saw greater-than-expected medical claims expenses in Kentucky for its Medicaid plan, which became effective late last year. The Kentucky contract represents about 5 percent of company revenue, according to Goldman’s Borsch.

The company backed its 2012 earnings forecast of a range of $3.10 to $3.30 per share. Analysts have been looking for $3.26.

Through Thursday, Coventry shares had risen more than 7 percent this year, less than the 12-percent climb for the Morgan Stanley Healthcare Payor index of health insurers.

Medicare trustee report hangs on uncertain assumptions


Mon, Apr 23 2012

By David Morgan

WASHINGTON (Reuters) – Medicare, the U.S. healthcare program for the elderly, should be able to stave off insolvency for the next 12 years, depending on a number of financial and political assumptions that may prove unrealistic, officials and other experts said on Monday.

The annual report of the Medicare trustees predicted that the program’s key hospital trust fund will become exhausted in 2024, prompting Medicare to begin paying out only 87 percent of scheduled hospital benefits to tens of millions of future retirees and disabled beneficiaries.

With the fate of Medicare a hot-button election year issue for the program’s 49 million beneficiaries, the report is likely to become fodder for Democrats and Republicans as they battle for control of the White House and Congress.

The 2024 forecast is unchanged from a year ago and shows that the deterioration of $549 billion-a-year program’s finances has not accelerated since 2010.

But the outlook is based on assumptions that may be unlikely, including a scheduled 31 percent pay cut for doctors in 2013, which Congress is almost certain to override.

The forecast also assumes that a deficit-reduction agreement to slash Medicare spending by 2 percent a year can be sustained over the coming decade and that the U.S. Supreme Court will not overturn President Barack Obama’s healthcare reform law in June.

The trustees also said Medicare is on an unsustainable path over the long term that could cause expenditures to more than double as a percentage of the U.S. economy, from 3.7 percent now to 10.4 percent in 2086, under a worst-case scenario.

Officials said that even the most optimistic sections of the report underscore the need for reform.

“The sooner the policymakers address these challenges, the less disruptive the unavoidable adjustments will be … and the greater the likelihood that the solutions we adopt will be balanced and equitable,” said trustee Robert Reischauer.

Administration officials seized on the report as evidence that Obama’s Patient Protection and Affordable Care Act has strengthened Medicare by encouraging efficiencies, combating fraud and waste and eliminating unnecessary costs.


“Medicare’s in a much stronger position than it was a few years ago, thanks to the Affordable Care Act,” said Health and Human Services Secretary Kathleen Sebelius, who told reporters that an estimated $200 billion in Medicare savings from reforms had pushed the expected insolvency date back from 2016.

“This is an approach that will put Medicare on a stable trajectory without eliminating the guaranteed benefits that beneficiaries have counted on for decades or shifting tremendous new costs onto seniors,” she said.

But analysts said Medicare could be forced to begin paying only partial hospital benefits earlier if assumptions about physician pay, deficit reduction and the fate of reforms fail to pan out.

“Medicare is in trouble,” said Joseph Antos, an analyst at the conservative American Enterprise Institute. “Are we really holding the line? Absolutely not.”

Earlier on Monday, a new report from the nonpartisan Government Accountability Office raised new questions about Medicare’s ability to improve care delivery, reduce costs and combat waste.

The GAO said Medicare is spending $8.3 billion on a test project that is supposed to improve the quality of private health coverage but has mainly rewarded mediocre insurance plans.

The watchdog agency urged the administration to cancel the Medicare Advantage quality bonus payment initiative, a three-year project described as the largest-scale test to improve Medicare services to date.

The administration defended the program as a necessary effort to determine how best to improve quality and reduce costs in Medicare Advantage, which provides about one-quarter of Medicare beneficiaries with coverage from private insurers.

The demonstration project, designed to promote quality by awarding performance bonuses to private insurers that offer coverage through Medicare, was undertaken to test whether annual quality improvements could be achieved more quickly than under Obama’s healthcare overhaul.

“We think this is a really important step,” Sebelius said. “At the end of 2014, it will have accomplished just what the goal was, which is to give some financial incentives to those plans that are improving quality results.”

Medicare Advantage was adopted under George W. Bush as a way to bring market efficiency to the sprawling government program. Some of the largest providers of Medicare Advantage plans are UnitedHealth Group and Humana Inc.

But Medicare Advantage has proved to be more expensive than traditional Medicare.

Sebelius said that even with the costs of the quality test program, the administration has been able to reduce the cost of Medicare Advantage from 114 percent of the fee-for-service program to 107 percent over the past two years.

(Editing by Maureen Bavdek and M.D. Golan)

Sebelius Equates Civil Rights and Healthcare

Sebelius seeks civil rights support for U.S. healthcare law

Thu, Apr 12 2012

By David Morgan

WASHINGTON (Reuters) – A top U.S. administration official asked civil rights activists on Thursday to help defend President Barack Obama’s embattled healthcare law, saying the reform package faces an “enemy” determined to set American health policy back half a century.

The remarks in a charged election year come two months before the Supreme Court is expected to issue a ruling that could make or break the law.

Health and Human Services Secretary Kathleen Sebelius sought to cast the two-year-old reform law as a vital weapon against racial disparities that have long condemned U.S. minorities to higher infant mortality rates, shorter lifespans and limited access to medical services.

“The enemy is at the door and we know that they would like to dismantle these initiatives,” Sebelius told the annual convention of the National Action Network, a civil rights group led by the Rev. Al Sharpton.

“Healthcare inequalities have been one of the most persistent forms of injustice,” she said. “Now is not the time to turn back.”

Sebelius’ remarks were part of an administration campaign to promote the Patient Protection and Affordable Care Act during a turbulent election year marked by repeated calls for its repeal and a Supreme Court ruling expected in June that could declare all or part of the law unconstitutional.

Civil rights activists and the minority communities they represent are a key segment of Obama’s Democratic base, whose support he could need in great numbers to stave off a Republican challenge in November, especially if the high court strikes down his signature domestic policy achievement.

Research has long shown low-income Americans, including many minorities, have significantly less access to medical care and suffer disproportionate rates of childhood illnesses, hypertension, heart disease, AIDS and other diseases.


Designed to extend health coverage to more than 30 million uninsured Americans, Obama’s healthcare reform law has become a favorite target for Republicans mainly because of an unpopular provision that requires most Americans to have private health insurance by 2014.

“We’ve got folks who are committed to undoing … the important initiatives that we’ve made in the last few years,” Sebelius told her predominantly black audience without making a direct reference to Republicans or other opponents of reform.

“Frankly, they want to go back and undo Medicare and Medicaid from the mid-1960s. They want to roll us back years and years,” she added.

Medicare and Medicaid, the national healthcare programs for the elderly and poor, respectively, were created in 1965 in a period of social and civil rights reforms aimed at ending racial segregation and protecting the voting rights of minorities.

The civil rights movement of the 1960s led to monumental changes in American race relations that allowed Obama to be elected as the first black U.S. president in 2008.

The Republican-controlled U.S. House of Representatives voted last month to partially privatize Medicare and convert Medicaid to a block-grant program for states.

Sebelius called on religious leaders, health advocates and other minority leaders to help the administration educate the public about the healthcare law’s benefits.

The law, which does not come into full force until January 1, 2014, has already benefited minorities by extending private insurance coverage to young adults, providing free preventive services for those with insurance and banning coverage denials for children with pre-existing conditions.

“I’m here to ask you to help,” Sebelius said. “If we can begin to close the disparities in health, we begin to close disparities in other areas, too.”

(Editing by Todd Eastham)

White House Counts on Mandate

UPDATE 1-White House: no contingency plan if healthcare law rejected

Wed, Mar 28 2012

* Top officials have cited options in the past

* Analysts see vulnerabilities for Obama’s base

* Any action unlikely until after November vote (Adds quotes, details and background)

By David Morgan and Jeff Mason

WASHINGTON, March 28 (Reuters) – The White House said on Wednesday that it was not working on contingency plans for President Barack Obama’s signature healthcare law, in the event that the Supreme Court struck down all or part of the sweeping reforms.

After three days of landmark Supreme Court hearings that raised doubts about the law’s fate, White House spokesman Josh Earnest said the administration remains confident that the 2010 reform measure would be upheld when justices issue their ruling toward the end of June.

“There is no contingency plan that’s in place. We’re focused on implementing the law,” Earnest told reporters. “If there’s a reason or a need for us to consider some contingencies down the line, then we’ll do it then.”

A negative ruling from the court would be seen as a major blow to Obama in the middle of an election year, when Republicans are demanding the repeal of the Patient Protection and Affordable Care Act.

Obama’s re-election prospects already face substantial challenges. A new Reuters/Ipsos poll shows that two-thirds of Americans, including a majority of Democrats, disapprove of his performance on another big issue: high gas prices.

The healthcare law and its unpopular individual mandate, which requires most Americans to have health coverage beginning in 2014, came under sharp scrutiny from the high court’s five conservative justices.

Doubts about its future deepened with tough courtroom questioning about whether the mandate exceeds the government’s constitutional authority.

Reform advocates contend that the mandate is vital to the law’s main objective of extending healthcare coverage to more than 30 million uninsured Americans.


Administration officials have spoken openly about possible contingencies in the past.

At a Reuters Health Summit last May, Health and Human Services Secretary Kathleen Sebelius said there would be a number of ways to expand health coverage if the mandate were overturned.

“There are all kinds of sign-up possibilities, auto enrollment and a variety of strategies,” she said.

But analysts say the week’s proceedings may have left Obama in too fragile a position to speak publicly about contingencies.

The White House could undermine his political base by openly preparing for defeat, particularly on the mandate, which is interwoven with popular consumer protections including a measure guaranteeing healthcare access for people with pre-existing conditions.

“They can’t risk having the president look like he’s folding, or giving up, or anything like that,” said Joseph Antos of the conservative American Enterprise Institute.

If the court struck down the law or its main provisions, analysts say the White House would likely postpone any decision on how to move forward until after the Nov. 6 general election.

They add that the loss of the mandate alone could leave the healthcare law at the mercy of congressional gridlock months after the election and raise doubts about the administration’s ability to usher key reforms into place by a Jan. 1, 2014, deadline. (Editing by Xavier Briand)