WellPoint’s premium rate hikes reinvigorated the Democrat’s health care reform push and provided fresh evidence of the need to control rising health care costs and improve the affordability of insurance. But Anthem Blue Blue Cross Blue Shied in California — a subsidiary of WellPoint — is now canceling the scheduled increases after regulators “found that the company overstated future medical costs used to justify increases” and committed numerous other methodological errors. “Correcting the flaws could drop the rate hikes to an average of 15%,” the analysis concluded:

“There will be no rate increases at this point,” Insurance Commissioner Steve Poizner said. “The application was in error. There were all kinds of methodological mistakes.” [...]

WellPoint acknowledged the errors in its rate filing, calling them “inadvertent miscalculations.” Anthem, it said, would file new rate increases for individual policy holders in May, but a spokeswoman declined to say exactly when or indicate how large they would be. …The report from the actuarial consulting firm, Axene Health Partners of Winchester, said that, among its errors, Anthem overstated medical costs by inflating the effect of aging. Reworking the numbers could reduce the average rate hike by 10.2%, it found.

For months, WellPoint, along with AHIP, insisted that growing provider costs and the departure of healthier people from the risk pool necessitated the steep increases, but this report helps explain why the rates were so much higher than medical inflation. Even if we bend over backwards and assume that the company was inadvertently making mistakes without checking its math that doesn’t bring us to a comfortable solution. The sheer carelessness of committing “methodological errors” that cost beneficiaries thousands of dollars is appalling, particularly for an industry that spends millions convincing the public it’s moving to contain health care spending.

In too many states, regulators don’t force insurers to live up to their own hype and as a result companies don’t have any incentive to double check their figures or submit lower increases. Democrats have already seized on the story to argue for a national rate review board that could reject unreasonable increases in states that lack such authority, but I suspect that any real action will occur on the state level. State regulators must begin auditing insurers and literally reviewing the math behind premium increases.

Consumer Watchdog has also put out a release urging Congressional investigators to look into “whether Anthem Blue Cross executives made misrepresentations to Congress in testimony claiming the company’s rate increase was actuarially sound,” arguing that if Americans are required to purchase coverage, insurance companies should be required to show that the premiums they charge are reasonable.

If they don’t, more stories about insurer antics and abuses could very will bring about the kind of public option and rate review provisions that Democrat’s weren’t able to stuff in this health care bill.

Earlier this year, Sen. Chuck Grassley (R-IA) took credit for parts of the health care law he opposes and today, during an interview with NPR, House Minority Leader John Boehner (R-OH) also highlighted the Republican ideas in the bill, while promising to repeal it:

INSKEEP: As you know, Democrats are already pointing to things that are changing in America because of this bill. They will point to the fact that college seniors, who would have been kicked off their families’ insurance plans when they graduated, will get to stay on. Insurance companies are now saying they’re going to end the practice of “rescission,” where they take, or at least modify…

BOEHNER: Both of those ideas, by the way, came from Republicans, and are part of the common sense ideas that we ought to have in the law.

INSKEEP: Well, are you going to repeal those two specific things?

BOEHNER Uh, what I want to repeal are the other 158 mandates, commissions, boards that set up all the infrastructure for the government to take control of our health care system.

Listen:

If Boehner is unwilling to repeal the Republican ideas in the health care law, he’ll have to preserve a good deal of the legislation, which at its core is built on the Republican principles of personal responsibility and managed competition.

His refusal to call for a full repeal, moreover, could cause a rift with the more conservative members of the Republican party. Last week, for instance, Rep. Steve King (R-IA) — who has proposed a bill calling for complete repeal — warned leadership that “if we leave any component of it in there, it has, it’s just become a malignant tumor that’s attacking our liberty and our freedom and it’s diminishing our aspirations and it saps our overall productivity as a nation,” King said. “If we can’t come to that conclusion, then I want some new people to come help me.”

Currently, repeal legislation has has no more than 62 co-sponsors in the House and 20 in the Senate.

Last month, the Arizona legislature eliminated funding for KidsCare, the state health program covering 38,000 children of the working poor, to help close the state’s $5 billion budget gap. By ending the program, the state forfeited billions of dollars in federal matching funds and left uninsured children with few health care options.

But the new health care law — which Arizona is challenging in court — has led them to re-think this decision. The law requires states that want to continue receiving federal health care funds to maintain eligibility in Medicaid and CHIP. And so yesterday, as the legislative session came to a close, the Republican controlled legislature did a do-over and restored state funding to the program so that it can benefit from the increased federal funds under health reform. East Valley Tribune explains:

What happened in the interim, though, was President Obama signed new health care legislation. That law eventually will provide extra cash to help Arizona with health care costs. But that law also says states must maintain their health care programs as they were the day he signed the bill, not only to get future increases but even to maintain existing federal aid. Legislative budget staffers pegged the loss at $7.8 billion a year.

Arizona is trying to preserve the federal dollars from the very health care reform it thinks is unconstitutional. Gov. Jan Brewer (R-AZ), in fact, “urged legislators to restore the programs” and plans on signing the legislation into law, proving once and for all that the money states will receive under reform will trump any ideological repeal effort.

As Emma Sandoe explains in this report, states that choose to opt out of the Medicaid expansion will lose billions of dollars in federal funding and will be no closer to grappling with the strained public health programs in their states.

Following Arizona’s lead, Mississippi is moving to finalize legislation prohibiting insurers from offering abortion coverage in the exchange, even if it’s paid for with private dollars. The state legislature sent the bill to Gov. Haley Barbour (R) yesterday, after House leadership tabled a motion to re-consider.

In some ways, the Mississippi bill may be even more draconian than Arizona’s law. While women in Arizona would still be able to purchase an abortion waiver with private dollars in an exchange, women who want to buy abortion coverage in Mississippi that goes beyond the life of the woman or if the pregnancy is the result of rape or incest, would be forced out of the exchange. From Senate Bill 3214:

SECTION 2. Legislative findings and purposes. (1) The Legislature of the State of Mississippi finds that Section 1303 of the federal Patient Protection and Affordable Care Act, states are explicitly permitted to pass laws prohibiting qualified health plans offered through an exchange in their state from offering abortion coverage.

(2) It is the purpose of this act to affirmatively opt out of allowing qualified health plans that cover abortions to participate in exchanges within the State of Mississippi.

SECTION 3. Opt-Out. (1) No abortion coverage may be provided by a qualified health plan offered through an exchange created pursuant to the federal Patient Protection and Affordable Care Act within the State of Mississippi.

Health reform has opened a Pandora’s box of state efforts to restrict abortion coverage by removing coverage from the exchange and placing other restrictions on abortion access. Most recently, the Oklahoma Senate overrode the governor’s veto to pass a law that requires “women seeking an abortion have a viewable ultrasound and listen to a detailed description of the fetus prior to the procedure.” “Though other states have passed similar measures requiring women to have ultrasounds, Oklahoma’s law goes further, mandating that a doctor or technician set up the monitor so the woman can see it and describe the heart, limbs and organs of the fetus. No exceptions are made for rape and incest victims,” the New York Times observed.

Similarly, the Florida state senate just voted 22-17 “in favor of a new government mandate that women seeking abortions must pay for ultrasounds — which averages from $200 to $1,000 — and, in most cases, view live images of the fetus.” “They also adopted an amendment banning abortion coverage for individuals and businesses who buy insurance under insurance exchanges.” The bill is set for a final vote Thursday in the Senate and will then move to the “deeply conservative” House.

For more on this wave of new abortion restrictions, click here.

Gov. Arnold Schwarzenegger (R-CA), who had previously described national health care reform as “health care to nowhere” that’s infected with “bribes, deals and loopholes,” is expected to announce today that California will fully comply with the new law. According to an advance copy of a speech obtained by the AP, the governor will call on lawmakers to set politics aside and “start implementing the law.” “If reform is to succeed, he says, it is up to the states to make it happen.” Schwarzenegger’s endorsement will make him the first Republican governor to publicly support health reform, delivering a major victory for HHS Secretary Kathleen Sebelius, who been trying to portray the law as beneficial to the states. The governor’s support also comes as Republicans across the country are distancing themselves from reform, suing the federal government, and refusing to implement its early provisions.

Over at California Healthline, Kate Ackerman runs down how residents could benefit from the new law:

- Effective Immediately — Small Business Tax Credits: According to a March issue brief from UC-Berkeley’s Center for Labor Research and Education, California residents who work at small businesses or are self-employed represent a disproportionate 71% of the state’s total uninsured population. The center estimates that small California businesses could receive more than $4.4 billion in tax credits over 10 years through the reform provision.

- April 1, 2010 — Medicaid Expansion Option: By Jan. 1, 2014, states are required to expand Medicaid eligibility to non-elderly residents with incomes less than 133% of the federal poverty level. However, the reform law allows states as of April 1, 2010, to phase in the Medicaid expansion to take advantage of federal matching dollars…. California and other states that face significant budget shortfalls are unlikely to expand their Medicaid programs before 2014. California officials have estimated that it will cost the state $2 billion to $3 billion more each year to cover new Medi-Cal beneficiaries.

- Effective 90 Days After Enactment — High-Risk Pools: California already has a high-risk pool — the Major Risk Medical Insurance Program — but it does not meet the requirements of the new health reform law because it caps enrollment at 7,100 and insurance benefits at $75,000 per year because of limited funding. The federal high-risk pool under the reform law calls for subsidized premiums and no annual caps on benefits. A bill (AB 1887) by Assembly member Mike Villines (R-Clovis) would establish a new high-risk insurance pool that would operate alongside MRMIP until 2014, when health plans will be prohibited to deny coverage to individuals because of pre-existing conditions.

- Effective Six Months After Enactment — Extending Coverage for Young Adults: UCLA’s 2007 California Health Interview Survey found that 29.5% of Californians ages 23 (when most health plans stop covering dependents) through 25 were uninsured. Some health plans, including California giant Kaiser Permanente, have announced that they will comply with this reform provision before it takes effect in September.

- Effective Six Months After Enactment — Prohibiting Pre-Existing Condition Exclusions for Children: The reform law prohibits health plans from excluding coverage to children with pre-existing conditions. By 2014, this provision will apply to all individuals. Assembly Member Mike Feuer (D-Los Angeles) has introduced a bill (AB 2244) that would go beyond the federal health reform provision by also limiting discriminatory changes for children with pre-existing conditions.

In 2007, Schwarzenegger unsuccessfully attempted to reform California’s health care system. Much like the new national law, his plan would have required Californians — even illegal immigrants — to purchase health insurance coverage, mandated businesses with 10 or more employees to offer insurance or pay a fee and expanded public health programs. Schwarzenegger’s proposal would have prohibited insurers from denying coverage to individuals with pre-existing conditions and required companies to spend at least 85% of their premium proceeds on patient care.

Earlier this month, Rep. Henry Waxman (D-CA) abruptly canceled hearings to investigate whether ending the deductibility of the retiree drug subsidy would cost employers billions of dollars. Without missing a beat, the Daily Caller’s Jonathan Strong and House Republicans are speculating that Waxman called off the much-publicized event to suppress embarrassing internal documents revealing that the health care law may cause employers to drop their existing health care coverage:

Publicly, Waxman said the investigation showed the companies’ disclosures were properly filed. But a new report from committee Republicans reveals the documents Waxman obtained included embarrassing evidence that the health-care law could drive up insurance premiums and force employers to dump employees from their health plans.

“Turns out Obamacare means if you like your health plan you can lose it. The president didn’t have to actually strong-arm companies into dumping their employee health insurance because his bill carried financial incentives to virtually guarantee that result,” Energy and Commerce Committee ranking member Rep. Joe Barton, Texas Republican, said. Most significantly, documents unearthed by the investigation highlight companies that are considering dumping employees from their current health-care plans in the face of new costs from the health-care law. President Obama repeatedly promised his health-care law would let Americans keep their current insurance if they’re happy with it.

Two things. First, if the Democrats were really interested in phasing out employer-based coverage, they would have adopted the Wyden/Bennett reform framework, which cuts the umbilical cord between worker, employer, and health care coverage. Secondly, if Republicans were interested in preserving the employer based system they would have supported a strong employer mandate to offer coverage (and their own health reform plans would reflect this). Instead, they spent the duration of health care reform arguing that requiring employers to provide health coverage would lead to dramatic job losses and drive companies out of business.

As for the actual substance of Barton’s claim — it’s overblown. The new health reform law may gradually ween us off our dependence on employer-based coverage as employees of larger companies will eventually be given the option of enrolling in a state-based exchange. But this will happen incrementally and inconsistently. Large employers want to continue offering benefits and for the foreseeable future, they probably will.

The real argument in the retiree benefit rebate debate, however, has always been two fold 1) are insurers actually losing billions and billions of dollars (those same documents that Barton was reading from tell us that they’re not) and 2) will eliminating the deductibility of the retiree credit cause employers to dump retirees into Medicare Part D? According to, Medco Health Solutions, a pharmacy benefit manager, this too is unlikely.

The “most likely choices for a large percentage” of companies was to stick with their current retiree drug plans, despite the less-attractive tax treatment, or to switch over to something called an employer group waiver plan, which signs up retirees for the Medicare benefit as a group and is typically administered by an insurer or PBM. “David B. Snow Jr., Medco’s chief executive, said in an interview that “the majority of the customers feel a sense of [having made a] promise that they don’t want to break” by dropping retiree benefits. “Will some do that? Probably,” he said. “I definitely don’t think it’s the majority.”

Nevada is the third state to officially opt-out of the interim high-risk pool program put forward in the new health care law, paving the way for the federal government to enroll uninsured state residents in a federal high risk pool program. The health care law established the pools as an interim measure to provide coverage for Americans with pre-existing conditions until the exchanges become operational in 2014. States that fail to build upon their existing programs or establish new pools will cede control to the federal government. Georgia does not currently operate such a program.

In a letter to HHS Secretary Kathleen Sebelius, Gov. Jim Gibbons (R) blamed the feds for not providing enough money for the pools:

In a letter to U.S. Health and Human Services Secretary Kathleen Sebelius, Gibbons said the estimated $61 million Nevada would receive to implement the pool under the recently signed federal health reform bill would be “grossly inadequate” to serve as many as 100,000 people who may be eligible.
Click here to find out more! [...]

“We estimate Nevada’s share of the $5 billion national pool will only allow approximately 2,900 individuals to be served,” Gibbons wrote, adding that more than 500,000 Nevadans are uninsured and an estimated 100,000 may be eligible to join the pool. “We do not believe financial or human resources are available to manage the pool,” the governor wrote. “There will be a significant problem managing the few who become eligible, but an even larger problem managing the frustration of people not eligible for the pool.”

Gibbons isn’t wrong to argue that the federal government will probably need to put more money towards the program, but the sentiment seems to contradict the often repeated Republican claim that the federal government should stay out of the health care business altogether. In fact, the three other states that have chosen not to build their own pools or embellish their existing programs — Georgia, Louisiana, and Nebraska — have all portrayed the federal health care law as a grotesque abuse of federal power. Earlier this month, Gibbons even signed an “executive order appointing a Las Vegas attorney to represent Nevada in a multistate lawsuit filed in Florida challenging the constitutionality of the law after Democratic Attorney General Catherine Cortez Masto refused.” Now, he’s relying on the federal government to cover the uninsurable population, helping bring about the very thing he fears — greater government involvement in the health care sector.

Sen. John McCain (R-AZ) initially proposed state-based high-risk pools as a way to cover Americans with pre-existing conditions during the presidential campaign (conservative organizations like the Heritage Foundation seem to support the idea as well) and was heavily criticized by Democrats for underfunding the initiative. Now that Obama has accepted the idea into health reform, Republicans are taking their swings and opting out of McCain’s idea.

States have until Friday to tell the federal government if they will voluntarily establish or build upon an existing state-based high-risk pool program.

Responding to a Reuters article detailing how WellPoint used a computer algorithm to rescind the health insurance coverage of breast cancer patients, Congressional Democrats sent a letter to the major insurance companies urging them to “ensure that rescissions occur only in cases of fraud or intentional misrepresentation of material fact” and “immediately institute a policy of independent, external third party review.” In less than 24 hours, WellPoint, UnitedHealth, Humana and Blue Cross of California have all agreed to implement “the new standard in May 2010,” but their pledge, while certainly significant, should not be taken at face value.

After all, federal law has required insurers to end rescissions since Congress passed the Health Insurance Portability and Accountability Act (HIPAA) in 1996. That law gave states the authority to enforce the rescission ban, but permitted the federal government to take over if states failed to adequately protect consumer interests. Over the last 14 years, insurers have been able to take advantage of weak state regulations to purge their rolls of costly patients without triggering a response from the federal government. What’s still unclear is how or if the federal government will enforce the rescission requirement under health reform. The new law restates the rescission prohibition and leaves enforcement of the rule to the states. The federal government is again the regulator of last resort. A fail-safe, if you will.

In short, regulators must trust but verify. As health policy analyst Peter Harbage said, “People have this idea that someone is going to flip a switch and rescission and other bad insurance practices are going to end. Insurers will find ways to undermine the protections in the new law, just as they did with the old law. Enforcement is the key.”

HHS Secretary Sebelius has issued a statement touting the new progress, but she can also encourage states to reevaluate their regulations to ensure they’re in compliance with the federal guidelines (and the insurers new promise). And if states can’t protect their residents from insurance rescissions, then the federal government must. Otherwise, it will be another five or ten years until the next crop of rescission horror stories crop up in the press.

Draft guidelines issued by the National Association of Insurance Commissioners (NAIC) suggest that health insurers may attempt to game the medical-loss ratio (MLR) requirements in the new health care law by re-classifying certain administrative expenses as medical costs and “deducting taxes and regulatory fees from the premium expense insurers must report.”

The new health care requires insurance companies to spend at least 80% of customers’ premiums on medical care in the individual insurance market, and 85% in the employer/group market until 2014; insurers who can’t meet these minimum standards will have to issue rebates to their customers. But the draft guidelines posted on the NAIC’s website say that insurers may try to “spend more” on medical care without sacrificing profits by expanding the definition of medical service. From the draft:

The denominator (premiums) in the PPACA MLR is reduced by federal and state taxes and licensing or regulatory fees and the numerator (claims) is increased by expenses for activities that improve health care quality. Both of these adjustments will result in a higher MLR than one calculated as incurred claims divided by earned premiums with no adjustment. As discussed below (question B.1.c), PPACA could be read to also include loss adjustment expenses in the numerator, which would further increase the result. In either case, we believe current MLR’s for most issuers in the small group and large group markets, when calculated with the PPACA adjustments, would be higher than the PPACA minimums. The situation is less clear in the individual market. Some issuers would likely have MLR’s below 80% even after the adjustments, while others would be well above the minimum.

The health care law tasks the NAIC — a private body not subject to federal transparency rules and largely funded by the insurance company — with defining the standard definitions, “subject to the certification of the Secretary.” As Judy Dugan, Research Director at Consumer Watchdog, told me during a phone interview, “Previously, having a low MLR was beneficial for a company because Wall Street liked a low MLR, so insurance would be very strict just doing direct medical costs in MLR.” “Now they want to shift the game” by announcing to Wall Street, “our MLR is going to go up by a couple of points but don’t worry we’re shoving administrative costs into it.”

According to page 19 of the health law, administrative costs simply have to meet the new broad definition of “activities that improve health care quality” to be added to the company’s medical loss ratio percentage. “This is how WellPoint has already increased their MLR average by two percentage points,” Dugan said, referring to the company’s recent call with investors. “They just unilaterally announced that they are shifting a number of functions that were previously considered administration into MLR category.”

A recent report from the Senate Committee on Commerce, Science, and Transportation also noted that health care industry analysts predict “companies will review their current spending and attempt to shift as many expenses as possible from administrative to medical,” concluding that “a key to the insurance industry’s profitability over the next several years will be ‘how much MLR recharacterizaiton the HHS Secretary allows.’” Consumer advocates believe that the NAIC’s central role in defining MLR categories and insurers’ ability to reclassify costs as “activities that improve health care quality” category will keep ensure the “industry’s profitability.”

Throughout the health care debate, the GOP saw conspiracy in every single legislative step and maneuver. Republicans claimed that Democrats were giving out judgeships, extra funding for hospitals and the Medicaid program, positions in the administration and threatening to close down Air Force bases to secure the votes of wavering members. They insisted that the Democrats were writing a secret bill behind closed doors and spread all kinds of rumors about death panels, government rationing and the horrors of British-like single-payer health care.

Now, the conservative American Spectator is claiming that the administration purposely delayed the release of a recent Center for Medicare and Medicaid Service’s (CMS) report — which found that national expenditures would increase by 0.9% under health reform — until after a key Congressional vote on health reform. The Spectator’s HHS source told the magazine that Secretary’s office received a copy of the report “more than a week before the Congressional votes on the bill” and quotes him as saying, “[t]he reason we were given was that they did not want to influence the vote.” “[T]here were a number of meetings here almost right after the analysis was submitted to the secretary’s office. Everyone went into lockdown, and people here were too scared to go public with the report,” the source said.

But as NBC’s First Read found out, there isn’t any truth to this conspiracy either:

1. The Office of the Actuary didn’t receive the language of the reconciliation bill until March 18 (when the legislation was posted), so the Spectator’s assertion that HHS had a copy of the Actuary’s score a week before congressional passage — on March 22 — doesn’t make sense.

2. Past scores from the Office of the Actuary came out AFTER passage of the legislation. For the House bill that passed on Nov. 7, 2009, the Actuary’s score came out on Nov. 13. And for the Senate bill that passed on Dec. 24, 2009, the Actuary’s score came out on Jan. 8, 2010. This most recent Actuary report is dated April 22.

3. Given points #1 and #2, it’s hard to see how the Actuary’s score was available before the CBO’s, which came out on March 18.

Indeed, point 3 is particularly convincing since CMS references the CBO analysis in its report and relies on the study to reach certain conclusions. It’s also difficult to imagine that the CMS report would have swayed too many votes. Lawmakers were familiar with CMS’s conservative methodology because the office had already released two other reports, all which assumed an increase in national spending; this latest report, in fact, is almost a copy/paste of the CMS’ previous conclusions.

For the record, the Chief Medicare Actuary, Richard Foster, has described the Spectator’s story as “completely inaccurate,” but Republicans still aren’t convinced. They are calling on Democrats to hold a hearing about the analysis.

From tea bags to death panels, from thick thousand page binders to “don’t tread on me” signs, Republicans have developed some creative ways to visually represent their opposition to health care reform. Now, a conservative group has invited Pennsylvania candidates for Senate and the governorship “to a shooting range to fire bullets into a junker that represents policy ideas it opposes.”

The Commonwealth Foundation is billing its FreePA event as a “celebration of the freedoms we enjoy but are under attack by Harrisburg and Washington” which embodies “a healthy love for the right to keep and bear arms, and CF’s habit of welcoming debate on the issues“:

The truth is that the opponents of our principles are the ones who refuse to engage in civil discourse about our pressing public policy problems. They know that their anti-freedom agenda is being rejected by the general public, so they won’t show up to public events like LiveFreePA and explain why they want to take away your rights and monitor your behavior, and then tell you and your family how to live your lives. Not only that, now they’re talking to the newspapers proclaiming how you should spend your Saturday on May 8th.

You know what? If I were a nanny-stater, I wouldn’t show up either. And I sure wouldn’t want you to come, have a good time, and show these politicians what gun safety and a sense of humor look like, and be encouraged to keep fighting for freedom. That’s why I hope you’ll join us May 8th to pump a few rounds (or fire a cannon…) into a beat-up car bearing anti-freedom policy ideas like “ObamaCare,” “Card Check,” “Cap and Trade,” and other failed, wealth-redistributionist ideas.

The group has invited “10 Republican and Democratic candidates to the May 8 event at a Lancaster County shooting range,” and so far all four Republicans and one Democrat, Jack Wagner, have confirmed that they’re attending. Admission is $65 for shooters and includes breakfast, lunch, beer, shooting activities and cigars!

Last Friday, the Vermont House approved “its own version of legislation passed earlier by the Senate” that would allow the state to design “a single-payer system, in which a government agency would administer and make all payments for health care” or a public option. California passed similar legislation earlier this year, and theoretically, under a provision added to the new health care law by Sen. Ron Wyden (D-OR), both states could opt-out of the requirements of federal health care reform and establish a single-payer structure.

But there are at least two problems that could deter states from leaving national reform and developing their own initiatives. First, sates can’t implement their own “innovative solutions” until 2017, after they’ve already spent time and energy establishing the new state-based exchanges and regulating insurers. Democrats may have moved back the date to allow for a smoother and more uniform implementation process, but delaying the opt-out date will only discourage states from establishing their own systems. States that still chose to pursue their own plan, will have to reconcile their programs with the federal requirements for Medicare, Medicaid, FEHBP, Indian Health Service and, most importantly ERISA — a 1974 law that, among other things, preempts states from enacting legislation that is “related to” employee benefit plans. Under Wyden’s provision, states could easily obtain a waiver from participating in the new federal exchanges if their innovative reform meets certain requirements, but states will have to go to Congress if their reform affects the health insurance offered by large employers.

As the Center for Policy Analysis’ Ellen Shaffer suggests, this is a major set back for single-payer advocates:

Section 1332 [see text below] provides that they can apply to the Secretary of HHS to opt out of the Exchanges beginning in 2017, if they have a plan to provide comparable benefits to at least as many people as the Exchange would have been estimated to cover, at no greater cost. At that point, if the Secretary grants the waiver, the states are guaranteed the transfer of federal funds that would have gone to pay for premium subsidies through the Exchanges. However, states have to apply to coordinate funds and programs with all the other federal programs. The bill offers each state a streamlined process to coordinate its waiver requests, but the Secretary can only grant funds for those programs where she has existing authority. For example, HHS does not have jurisdiction over ERISA, which is administered by the Department of Labor, so an ERISA waiver is not possible under this legislation. Within HHS, the Secretary already has waiver authority for some programs, but not all.

During the House Education and Labor Committee’s mark-up, Rep Dennis Kucinich (D-OH) introduced an amendment that would authorize and require “the Secretary of Labor, in consultation with the Secretary of Health and Human Services” to waive the ERISA pre-emption (Sec. 514) for states that have enacted a state single payer system. The committee adopted the amendment, but it was left out of the final House bill.

Kucinich characterized health care reform as a “detour” from the single-payer cause when he publicly announced that he would support the bill; Vermont and California will soon learn that it’s certainly of no great help.

Jennifer Haberkorn, formerly of the Washington Times but now with Politico, is reporting that states will face the “first real test of how cooperative the states will be in implementing the massive new health care reform law comes on Friday,” when they have to decide if they’re willing to cooperate with the interim high-risk pool provision of the law — which encourages states to establish coverage pools for individuals who cannot find affordable coverage in the individual health insurance market. If states chose not to implement the high risk pool program, the federal government will enroll eligible state residents into a national pool.

Georgia’s insurance commissioner John Oxendine, a Republican who is also running for Governor, already announced that the state won’t participate in the high-risk pool requirements, thus inviting the federal government to directly contract for the provision of services within the state. And now, Kansas has also made the “preliminary decision” to opt out of the measure and bring about the very kind of federal intrusion that Republicans seek to avoid:

“From our standpoint, we just want to do what’s right for Kansas,” said John Meetz, a government affairs liaison at the Kansas Insurance Department. “We’re not looking at it as a political decision.”

Louisiana Gov. Bobby Jindal and Insurance Commissioner James J. Donelon have made a preliminary decision to opt out of the program, Donelon said Monday.

He is a Republican and one of the dozen elected insurance commissioners in the country. But he said Louisiana’s decision was based largely on the concern that the states will be stuck with the bill. “On the surface, it appears to me to be a no-brainer,” Donelon said. “We can’t afford this.”

Jindal’s decision to invite the federal government into Louisiana — rather than using the new federal funds to improve the state’s existing high risk pool program — seems to contradict strong opposition to federal overreach into state health care policy. “I encourage those in Washington, D.C. to pick up a U.S. Constitution and read it,” Jindal has said of the bill. “If the 10th Amendment of the Constitution means anything, we need to stand up for the fact that the federal government can’t force Americans to buy a certain product as a requirement to be an American. If the federal government can do this, what can’t they do? Where does it stop?”

Apparently, it starts with Louisiana residents enrolling in a federal high risk pool program.

The nation is rightly focused on Arizona’s draconian new immigration law, but Gov. Jan Brewer (R-AZ) — who is running for her first full term in office this year — has just signed another regressive bill that could severely restrict women’s access to abortion coverage.

On Saturday, “at the Center for Arizona Policy Family dinner before 1600 guests,” Brewer signed SB 1305, the first-in-the nation bill that would prohibit insurers in the state-run health care exchange “from providing coverage for abortions unless the coverage is offered as a separate optional rider for which an additional insurance premium is charged.”

The new Arizona law is a radical mini Stupak. It prevents insurers from offering abortion services, except under the most extreme circumstances, even if only private money were used to pay for those services. Most if not all women in the exchange would only be able to purchase coverage through an impractical, separate abortion “rider” or leave the exchange entirely and find coverage in the shrinking individual health insurance market. Since it’s unlikely that many insurers will offer abortion riders or that women will purchase them in anticipation of needing an abortion — in fact, “in the five states where abortion riders are currently required, no insurance company offers them” — the Arizona law will severely disadvantage poorer women who would likely have to pay out of pocket for abortion services.

Many other states are considering similar bans, but only Arizona has the distinction of leading the nation in adopting the most conservative social policies. Earlier this month, Brewer also signed a measure requiring abortion providers “to report on the individual abortions they perform. Though the names of the women would remain confidential, the bill would also require statistics on how many times courts bypassed parental consent laws, among other things.”

In October, former Senate Majority Leader Bill Frist (R-TN) broke with his party to argue that health care reform “is not socialized medicine” and suggested that he could have voted for the bill. “You hear a lot of people on the extreme say that socialized medicine is going to come in and control everything. Socialized medicine is where the government owns the hospitals. They own the doctors and they decide how much people are getting paid. And that’s not what’s in these bills,” Frist told Washington Journal.

Yesterday, during a panel at the American Hospital Association with Tom Daschle, Frist again characterized the new law as a moderate measure that he “sort of likes.” From Emily Walker of MedPage Today:

Frist, a thoracic surgeon, told Time magazine back in October that if he were still in Congress, he would vote for the bill. And his support apparently hasn’t wavered. On Monday afternoon he said he would give an “A” grade to the provisions in the law aimed at expanding insurance to an additional 32 million people. Cost, however, is another matter. While most Republicans would likely slap a failing grade on the cost aspect of the law, Frist said he’d rank it a “C.”

“I like the bill,” Frist said during a panel discussion with former Democratic Senate Majority Leader Tom Daschle at the American Hospital Association’s (AHA’s) annual meeting. “I think it’s got lots of positive stuff in it, other than the costs.”

Frist also praised President Obama’s second health summit, saying the President had “persuasive charisma” and “command of the subject.” “You have a president there who got his hands dirty, but still looked presidential,” Frist said.

Earlier this month, Frist predicted that the state lawsuits challenging the constitutionality of health reform would likely fail. “”I don’t think that is going to be successful,” Frist told reporters after a speech last Thursday to educators in Nashville. He added, “From a justice, fairness and equity standpoint, I’m very proud of this administration and that America has addressed this.”

One of the most common Republican narratives about the new health care reform law argued that eliminating the subsidy to private insurers participating in Medicare Advantage would force insurers to stop offering coverage, causing 10 million seniors to lose their Medicare benefits. Throughout the debate, Republicans introduced numerous amendments and motions instructing Congress to remove the $136 billion in cuts to the Medicare Advantage program. Sen. John McCain (R-AZ) was so sure that the cuts would leave seniors dry, he urged them to rip up their AARP cards to protest the organization’s support for the bill.

Immediately after reform became law, however, some industry observers saw indications that the fears were overblown. Earlier this month, BNet’s Ken Terry wrote that “If these companies were really concerned about the impending cuts, they’d be heading for the exits right now.” “The insurers’ decision to stick with Medicare Advantage undermines Republicans’ assertion during the reform debate that the Medicare cuts would hurt seniors.” Indeed, now even insurers are admitting that they may very well survive the cuts. From Business Week:

Stephen J. Hemsley, chief executive officer of UnitedHealth Group Inc., told analysts on an earnings call this week that reduced payments won’t keep the company’s products from competing with Medicare insurance offered directly from the government. Kathleen Sebelius, the Health and Human Services secretary, told a House Appropriations subcommittee that she expects “a robust array of choices for Medicare recipients.” [...]

“Sebelius is right” about Medicare Advantage, said Elizabeth A. McGlynn, associate director of Rand Health at the Rand Corp., a research institute in Santa Monica, California. “We’re going to see a variety of responses from plans. We may see plans that choose to go out of the business, and I think we’ll see plans that get very creative in how they choose to position themselves.”

The expectation is that the competitive bidding requirements eliminating the subsidy will force inefficient Medicare Advantage plans to follow the model of the efficient ones. Insurers may respond to the cuts by pressuring providers to lower their prices and take advantage of the law’s bonus payments but few will simply pull out and leave the market. Under reform, Medicare Advantage plans that provide quality benefits efficiently, would receive a 5 percent bonus on top of their competitive bid to pay for extra benefits.

Even with the loss of the subsidy, insurers aren’t exactly going bankrupt. As Terry observed, “The $13 billion a year reduction isn’t so much if you compare it to the insurers’ total revenues or consider all of the new business they’ll get as baby boomers start signing up for Medicare. The shortfall will also be covered by increased business from people under 65 who will have to buy insurance under the reform legislation. That windfall will start in 2014, right around the time that the decrease in Medicare Advantage payments starts to bite.”

Health care reform has shifted the abortion debate to the states, where conservative lawmakers are using the law’s opt-out language as an opportunity to prohibit insurers from offering abortion coverage in the new exchanges, but also severely restrict women’s ability to purchase abortion services with private dollars. Tennessee became the first state to pass legislation stripping abortion coverage from the new exchanges and Missouri, Mississippi, Oklahoma and now Louisiana are not far behind.

Last week, the Louisiana House passed a bill by a vote of 76-13 which “Prohibits all health insurance issuers from including abortion in any health care coverage available in the state,” while insisting that the law is still unconstitutional. “Nothing in this Act shall be construed or implied to recognize any independent right to abortion under the constitution or laws of this state, nor shall it be construed or implied to recognize the constitutional validity of the Patient Protection and Affordable Care Act of 2010, P.L. 111-148,” the bill states.

But conservative lawmakers are not simply opting their states out of providing abortion coverage in the exchanges, they’re taking advantage of the renewed debate to pass other pet restrictions. “At least 22 U.S. state legislatures are seeking new ways to restrict abortions.” They include:

- OKLAHOMA: Gov. Brad Henry (D) vetoed two separate abortion measures. One would have “required women seeking abortions early in their pregnancies to undergo an invasive form of ultrasound and listen to a detailed description of the fetus before having the procedures,” while the other would have banned wrongful birth lawsuits.

- NORTH DAKOTA: “A North Dakota grassroots pro-life organization is announcing the official beginning of an effort to circulate petitions for an initiated measure that would prohibit physicians from decapitating and crushing the skulls of living unborn children.”

- KANSAS: Doctors must give a medical diagnosis justifying late-term abortions under a new bill, which was vetoed by the governor April 15. An override attempt is expected.

- UTAH: “A new law makes self-induced abortion a homicide. It was prompted by a girl who paid a man $150 to beat her to try to induce a miscarriage.”

- MISSOURI: The state Senate passed a bill requiring the physician to provide materials “detailing the risks of an abortion and the physiological characteristics of an unborn child at two-week gestational increments” at least 24 hours prior to an abortion. The bill also requires women to be informed about fetus’ possible ability to feel pain. It now moves to the state House.

- NEBRASKA: Governor Dave Heineman (R) signed legislation “banning most abortions 20 weeks after conception or later.” Another measure discourages providers from offering abortion by allowing women to sue doctors that don’t follow a meticulous pre-abortion review process.

- VIRGINIA: “On a 20 to 19 vote, the Democratic-led Senate agreed to an amendment proposed by McDonnell (R) that would limit state funding for abortions to those performed in cases of rape or incest or when the life of the mother is at risk.”

Jessica Arons says that all of this is “a predictable outcome of the Nelson language in the health reform bill.” “It reignited the abortion wars in the states.” “Nelson opened the door for them to legislate away private insurance coverage of abortion and the states are walking right through. This is no longer about public funding for abortion (and in fact, it never really was); this is about making abortion impossible to obtain for women of all means.”

Last month, Sen. Chuck Grassy (R-IA) — a vocal opponent of the new health care law — issued a press release taking credit for some provisions in the new health care law. “The health care legislation signed into law yesterday includes provisions Grassley co-authored to impose standards for the tax exemption of charitable hospitals for the first time,” the release boasted. “The provisions enacted in the new health care law are the result of Grassley’s leadership on tax-exempt organizations’ accountability and transparency, including hospitals.”

Now, Grassley’s office has issued another release, highlighting how the new law would help Medicare beneficiaries in rural Iowa:

Q: What’s the impact of Americans living stronger and longer?

A: Americans are living stronger and longer as nutrition and medical technology improve. According to the Administration on Aging, one out of every eight Americans is age 65 and over. That number will jump to one out of five Americans by 2030….Making sure doctors are available to Medicare patients is another challenge for policy makers. When doctors in states like Iowa are not fairly reimbursed for their services, it makes it difficult to recruit doctors and it makes it a challenge for them to keep their doors open to new Medicare patients. I worked successfully to improve Medicare payments to doctors in rural states like Iowa and, in turn, access for beneficiaries, as part of the health care reform enacted this year. I’ve previously won passage of legislation to help hospitals in rural America keep their doors open.

Grassley delivers a different massage to a national audience. Last month, Grassley told MSNBC’s Andrea Mitchell that he supports the state lawsuits challenging the constitutionality of health care reform, saying “you know, the bad outweighs the good. It’s just that simple.”

Republicans have responded to passage of the health care law by promising to build a new movement to repeal the measure. Rep. Michele Bachmann (R-MN), Rep. Steve King (R-IA) and Sen. Jim DeMint (R-SC) introduced legislation to rescind the law, but with financial reform debate heating up, Republicans have put the repeal effort on the back burner. And, they’ve become anxious about replacing some of reforms popular provisions.

On Thursday, King appeared on the Scott Hennen Show to express his frustration with his party’s reluctance to support a full repeal and register his disapproval with all parts of the law:

KING: And this should have happened almost instantly and spontaneously. And instead it’s going slow because there are Republicans who are arguing they don’t want to have to be opposed to every component of ObamaCare. They want to nuance this a little bit. And whenever you get nuance, you get divided by the enemy. And they scatter you across the battlefield and take you apart. We’ve got to stand on this thing as a central square. And our leadership has been pretty good. Mike Pence has signed on to the bill and he’s been very clear in where he stands. I don’t have John Boehner signed on yet. I don’t have Eric Cantor signed on. A number of the other people in leadership have not.

King is so universally opposed to ObamaCare that he declared his opposition to a provision that would allow younger Americans to stay on their parents’ policies until they turn 26. King awkwardly recalled an allegory about ordering grown-up children to dig up an iron pen once they turn 18. Listen:

“If we wait and see, we will see an Obama juggernaut take over this country and we’ll never get our freedom back,” King said. He also hinted that he could leave the Republican party if he can’t convince his colleagues to support the measure. “If we leave any component of it in there, it has, it’s just become a malignant tumor that’s attacking our liberty and our freedom and it’s diminishing our aspirations and it saps our overall productivity as a nation,” King said. “If we can’t come to that conclusion, then I want some new people to come help me.”

For all their uncertainty, Republicans still seem intent on running on some kind of repeal. Earlier this month, House Minority Leader John Boehner (R-OH) said repealing this bill “has to be our No. 1 priority.”

Back in October, Anthem Blue Cross and Blue Shield of Maine, the state’s largest private insurer, sued the state after Maine’s Superintendent of Insurance denied Anthem a rate increase that would have required Maine residents to pay an “additional $12 million in annual premiums for the same level of benefits.” Under Anthem’s proposed increases, the average policyholder would have had to spend “more than $13,000 in premium and deductibles, prior to becoming eligible to receive any health benefits under the policy.”

After reviewing Anthem’s annual rate increases for policies sold within the individual health insurance market, Maine rejected the company’s proposed rate increase of 18.9%, but allowed the company to “break-even” in its individual market division and increase “rates by just 10.9%.” According to court documents obtained by the Wonk Room, Anthem, a subsidiary of Wellpoint Inc., argued that beyond simply ‘breaking-even’, the government must guarantee the company a 3% profit.

On Wednesday, the Maine Superior Court affirmed the decision by state regulators to cut the increase, ruling that Maine law does not “expressly entitle insurers to a mandated profit margin“:

The judge also said it was not improper for the superintendent to consider the state of the economy and profits from Anthem’s other lines of insurance in making her decision on the proposed increase.

Insurance Superintendent Mila Kofman called the decision “good news for Maine consumers.’’ Attorney General Janet Mills said Anthem “cannot impose high rate increases on the backs of individual policyholders to maximize its corporate profits.’’

“In the past three years alone, Anthem turned over $200 million in dividends to its parent company Wellpoint, one of the largest health insurers in the country,’’ Mills said.

This ruling establishes a positive precedent for future lawsuits (which are almost inevitable given the new health care law’s rate review procedures) and the case in Massachusetts, where insurers are suing the state for using its rate review authority to reject “235 of 274 increases proposed by Massachusetts health insurers for small businesses and individuals.”

Currently, more than thirty states have the authority to regulate premiums in the individual or small group markets and Sen. Dianne Feinstein (D-CA) has proposed legislation to allow the federal government to review and reject insurance premium increases in states that don’t already have this authority. The industry is obviously resisting the effort.