A new Center on Medicare and Medicaid Services (CMS) analysis of the non-tax provisions in the new health care law has found that increased utilization by the 34 million newly insured Americans will raise total national expenditures by 0.9% between 2010 and 2019, outweighing the effects of the cost containment provisions in the law (the Medicare Commission, the excise tax, payment updates to Medicare). The report also doubts that providers will be able to “improve their own productivity to the degree achieved by the economy in large” and predicts that the payment updates may lead some Medicare providers “for whom Medicare constitutes a substantive portion of their business” to stop seeing Medicare patients.

The analysis is not without its positives, however:

- The law covers 34 million Americans.

- Overall out-of-pocket spending would decline by $237 billion from 2010-2019.

- It extends the life of the Medicare trust fundby 12 years.

- Public expenditures will actually decrease as a percentage of national health expenditures from 52% to 51%.

So what to make of these mixed results? First, the CMS report analyzes the first 10 years of reform, during which the rate of growth will increase as the uninsured are brought into the system. But after these first 10 years, it’s likely that the Medicare savings and the tax on high cost insurance plans will ultimately bring spending back down. Second, CMS, like the CBO, uses a narrow spectrum of evidence. For instance, the center does not score any savings from preventive care or system modernization (see Table 1 on pg. 23) and omits “any Federal savings pertaining to the excise tax on high-cost employer-sponsored health insurance coverage, the fees on insurance plans, the excise tax on devices, and other non-Medicare revenue provisions of the PPACA.” It also warns policymakers against interpreting the results too literally, since “the responses of individuals, employers, insurance companies, and Exchange administrators to the new coverage mandates, Exchange options, and insurance reforms could differ significantly from the assumptions underlying the estimates presented here.”

Indeed, there is a whole body of research that makes different assumptions and reaches different conclusions. In December, the Commonwealth Fund and the Center for American Progress Action Fund released a study that quantified the savings from the provisions that CMS largely ignores. Economists David Cutler, Karen Davis and Kristof Stremikis relied on business literature about the inefficiency in the health care sector, experiences of health practitioners, and the real world experiences of Geisinger Health System, Health Partners, Denver Health and others and estimated higher savings from modernization and payment reform. As a result, they found that the annual growth rate “in national health expenditures falls from 6.4 percent absent reform to 6.0 percent under the Senate proposal.” Similarly, the administration’s Council of Economic Advisers also released a report last year which found that health reform would reduce health care spending by 1 “percentage point over an extended horizon.”

Despite all this, conservatives are already using the new report to substantiate their criticism of the law. The House leadership blasted the analysis to reporters last night and today Rep. Paul Ryan (R-WI), House Minority Leader John Boehner (R-OH) and the House of Representatives Republican Conference all tweeted the analysis.

Their reaction represents a study in contrast. After the CBO found that health reform will lower the deficit, the GOP dismissed the findings by claiming that Democrats tricked the budget office with accounting gimmicks and funny numbers. The actual cost “over a decade is about $2.3 trillion on paper,” they claimed. “The far more likely deficits are $460 billion over the first 10 years, and $1.4 trillion over the next 10.” Now that the CMS produced a report which find that the law would marginally increase medical spending over the next decade, Republicans are clinging to the conclusion without questioning the methodology. But if the GOP’s initial claims are true, shouldn’t the cost increases be much higher?

Over the past year, as health care premiums have skyrocketed and more Americans became uninsured, the profits of the health insurance industry have soared. WellPoint — the nation’s largest insurer — “posted an eightfold increase in profit for the fourth quarter,” and UnitedHealth recently reported that it’s first quarter profits increased by 21%. Insurers and their representatives, however, continue to insist that their earnings make up only a tiny fraction of overall health care spending and argue that policy makers should focus their cost containment efforts on other industries.

During Tuesday’s hearing before the Senate Health, Education, Labor, and Pensions Committee (HELP), AHIP President and CEO Karen Ignagni explained that “according to government data — just to level set — we’re 4% of national expenditures. The profits of our industry, according to Fortune Magazine…in 2008 were roughly 2%. In 2009, were about 3.2[%]. That’s where we are relative to other stakeholders in the health care sectors that have 3 and 4 times those levels,” Ignagni said.

But at that same hearing, Michael McRaith, Director of the Illinois Department of Insurance, argued that insurers have a certain level of discretion in how they report their profits and could manipulate the books to show lower figures:

McRAITH: We regulate insurance companies at the low-end of their capitol levels. We do not regulate what is too much capital or surplus. A company can decide that surplus is not profit. So when a company tells you it’s making 2.2% profit, what it’s telling you is that the discretionary decision that’s been made about how to report that number — it is not a reflection of capitol received or the financial strength of that individual company, necessarily.

Watch a compilation from Tuesday’s hearing:

As one former CFO of a major insurer explained to me, all insurers are required to maintain “incurred but not reported” reserves (IBNR) and they use actuarial statistics to “guestimate” how much of that premium is “reserved” for future claims that have not yet occurred and/or not yet reported over the expected term of the policy, and how much of the remaining premium portion is designated to the margin “from which expenses are deducted.”

“Insurers report their reserves to State Insurance commissioners annually who review them to gauge the financial soundness of each insurer. While actuaries have well defined methods for computing these reserves, there is always a bit of wiggle room. And I suspect that ‘wiggle’ is what McRaith is talking about. And the risk here is where insurance commissioners can lean towards consumers or towards insurers when assessing the adequacy and accuracy of reserves. Overstating reserves understates earnings and vice-versa,” the CFO said.

In other words, insurers are only as rich as their comparison. As Sen. Jack Reed (D-RI) explained during the hearing, “profit [earnings as a percent of revenue] is one measure, but return on equity is another measure. You can compare them not only to device makers, and other parts, but if you compare them to the manufacturing sector, insurance is doing pretty good I think. So it’s all the point at which you’re comparing.”

Reuters’ Murray Waas has a fascinating look into how WellPoint — the nation’s largest insurer — has stretched the nation’s relatively lose anti-rescission laws to cancel health insurance coverage for individuals when they need it most. After they become ill.

The insurer is using a computer algorithm that automatically targeted “policyholders recently diagnosed with breast cancer” and investigated them for “fraud”:

Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women’s specific cases without a signed waiver from them, citing privacy laws.

That tens of thousands of Americans lost their health insurance shortly after being diagnosed with life-threatening, expensive medical conditions has been well documented by law enforcement agencies, state regulators and a congressional committee. Insurance companies have used the practice, known as “rescission,” for years. And a congressional committee last year said WellPoint was one of the worst offenders.

But WellPoint also has specifically targeted women with breast cancer for aggressive investigation with the intent to cancel their policies, federal investigators told Reuters. The revelation is especially striking for a company whose CEO and president, Angela Braly, has earned plaudits for how her company improved the medical care and treatment of other policyholders with breast cancer.

The disclosures come to light after a recent investigation by Reuters showed that another health insurance company, Assurant Health, similarly targeted HIV-positive policyholders for rescission. That company was ordered by courts to pay millions of dollars in settlements.

While the practice of rescinding coverage is fairly common — since “it is important for these companies’ profit margins that they get rid of policyholders with expensive diseases” — the deliberate nature of these rescission are truly shocking.

Theoretically, existing federal law, as well as well as the new health care reform, protects consumers from rescission and policy cancellations. Insurers have been required to renew policies in the individual health insurance market under the Health Insurance Portability and Accountability Act (HIPAA) since 1996, but they often “do not follow federal standards and instead follow state laws that offer weaker consumer protections.” The federal law allows insurers to cancel policies due to non-payment of premiums; “fraud or other intentional misrepresentation”; if the insurer is leaving the market; if an individual or employer moves out of geographic area of the plan; or, in the case of an association policy, if an individual has left the association contracting with the plan” — and states are responsible for enforcing these rules and have jurisdiction to create even stronger regulations.

But insurers take advantage of weak state regulations — in fact, insurers have used their political power to prevent states from adopting stronger regulations — and the lose definition of ‘fraud’ to purge their rolls of costly patients. “The legally accepted definition that it is intentional misrepresentation, but state laws all very” and intentional is hard to determine, health policy wonk Peter Harbage told me during a phone interview. Did an individual intentionally exclude a prior condition or was the condition undiagnosed or simply forgotten? “Insurers have tried to stretch the definition as far as they can and that’s what we’re seeing with WellPoint,” he said.

Democrats have promised that the new health care law will end such abuses, but Harbage is skeptical. The new reform law restates existing HIPAA regulations without giving the federal government greater oversight abilities. “People have this idea that someone is going to flip a switch and rescission and other bad insurance practices are going to end,” he’s quoted in the article as saying. “Insurers will find ways to undermine the protections in the new law, just as they did with the old law. Enforcement is the key.”

To that end, Harbage says that there are at least three things lawmakers can do to strengthen the existing legislation: consumer education, prior review and data tracking. “Third party review of recissions is realistic. Having the state review every rescission before it’s made is something that could happen. At a minimum, you could have states track who’s being rescinded. They don’t even know when a rescission occurs. Regulators could be much more proactive in educating people about their rights. People generally have no idea where they can go or who they can turn to,” Harbage said.

Incidentally, WellPoint has a long history of exploiting the so-called ‘fraud” loophole to rescind or cancel coverage. As Waas notes, a 2007 investigation by the California Department of Managed Health Care selected 90 instances in which Anthem Blue Cross of California “dropped the insurance of policyholders after diagnoses with costly or life-threatening illnesses to determine how many were legally justified” and found that none were. Similarly, an “investigation last year by the House Energy and Commerce Committee determined that WellPoint and two of the nation’s other largest insurance companies — UnitedHealth Group Inc and Assurant Health, part of Assurant Inc — made at least $300 million by improperly rescinding more than 19,000 policyholders over one five-year period.” Read that full report here.

Several news outlets are reporting that Republicans are preparing to re-litigate the health care reform debate by blocking the nomination of Donald Berwick, Harvard University professor, to head the Center for Medicare and Medicaid Services (CMS). As the Washington Post notes, “Democrats in the Senate said that, given Berwick’s national stature and broad-based support, he would be easily confirmed under ordinary circumstances,” but “Berwick must first clear the Senate Finance Committee, where ranking Republican Charles E. Grassley (Iowa) said that he plans to vigorously ‘explore the nominee’s preparedness for the enormous challenges that face the agency.’”

The Republican Policy Committee has already prepared a memo — which I’ve obtained — that links Berwick to the British health care system and presents him as someone who supports rationing and a government takeover of health care (Download the full memo HERE):

Donald Berwick, President Obama’s nominee to head the Centers for Medicare and Medicaid Services (CMS), has a history of support for government rationing of health care resources on cost grounds. He has spoken favorably about Britain’s National Institute for Health and Clinical Excellence (NICE), which denies patients access to life-saving treatments the National Health Service (NHS) deems too expensive. The American people should have their eyes open to the ramifications of NICE-style rationing in the United States as part of Democrats’ brave new health care world….They may see a Medicare Administrator who explicitly advocates for rationing as indicative of Democrats’ government takeover of health care…

All this is to be expected, particularly since Republicans have pledged to turn the 2010 midterm elections into a referendum on health care reform. But it’s worth pointing out two things.

First, Republicans are deliberately misinterpreting Berwick’s comments about transforming the American health care system from one that pays for the quantity of care into one that pays for value of care. Berwick has built a reputation of finding innovative ways of squeezing value out of every health care dollar and “persuading hospital administrators and doctors to adopt his recommendations.” But his approach — which is based on the idea that “less intensive, less invasive—and less expensive—healthcare can sometimes be more effective than the most aggressive care” — is nothing like the one-size-fits all government-takeover caricature.

Instead, he understands that to find solutions to specific problems, different communities will have to experiment with different solutions. “How could Congress possibly know enough to specify for every community, the exact design for care that is safe, effective, timely, patient-centered, equitable and sustainable?” Berwick asked during a speech in December. “The legislation does contain long sections focusing on quality,” Berwick acknowledged, “and there legislators lay out possibilities. But it is up to health care communities to test, adapt and perfect these strategies in real world.” His focus on improving care quality, while lowering costs has won over some fairly influential admirers. Nancy Nielsen, the immediate past president of the American Medical Association praises Berwick’s “ability to inspire doctors and hospital administrators to work together.” “Don is so widely respected because he has worked in such a collaborative way,” she said.

The second point is that while Berwick will certainly have discretion in running the delivery reform pilot projects in Medicare as well as other liberties, it’s difficult to argue that he’s be able to transform the American health system into NICE. However “radical” his views may or may not be, ultimately he’ll be working within the confines of a fairly conservative law. Even if he is the biggest single payer advocate/socialist in the world, the bill’s managed competition core as well as the obvious need to work with, and to a certain level please, the different health care stakeholders, will naturally prevent the next British invasion.

Alaska is the latest state to sue the federal government over the constitutionality of health care reform, bringing the total number of challenges to 21 (20 have joined the Florida lawsuit, while Virginia has filed its own challenge). Alaska Governor Sean Parnell (R) — who is currently filling in for Sarah Palin but plans to run for a full term in this year — appeared on Fox News’ Greta Van Susteren last night and explained that he was joining the suit to prevent the federal government from ordering Alaskans to buy gym memberships and vehicles from General Motors:

PARNELL: The question really is, should we allow the federal government to require citizens to engage in commerce? You know, your previous people on the show were speaking to that because Congress could now conceivably require all Americans to buy federally approved gym memberships in order to lower obesity and blood pressure rate. Or the attorney general’s memorandum, you know, speculated, you know, they could now order us to buy GM cars under the threat of a tax surcharge so the federal government can better manage its stake in GM. It’s just…

Without mentioning that the Supreme Court has long held that the federal government has the right to regulate commerce or explaining how the lawsuit fits into the current state of law, Parnell argued that the effort is more about liberty, than health care. “I began to realize that we got to stop making this about the health care debate and start making it about our liberty. If those folks who have been on the front lines of — fighting for civil liberties, you know, people to the left of us for years and years, understood that this is about liberty, not about health care, it’s about being mandated to make a choice on a commodity — I think people would take a different view of things,” he told Van Susteren.

I suspect that many Alaskans will still think it’s “about health care.” Alaska is one of the states with the most expensive health insurance in the country, which is the main reason why 19.4% of the residents are without coverage. Chronic health issues such as obesity and prevalence of smokers are relatively high and health care costs have risen faster than the national average. Although Alaska has a fairly robust public health infrastructure — thanks to federal aid — the state does not impose rate restrictions or other regulations on the private health insurance market and a relatively small percentage of employers offer health coverage.

Sen. Mark Begich (D-AK) blasted the governor for ignoring Alaska’s health crisis and spending “countless hours and hundreds of thousands of dollars” on the frivolous lawsuit.” “That level of state dollars and resources could be better spent keeping our economy healthy, creating jobs for Alaskans and protecting public safety,” he said.

On a related note, Oklahoma may also soon join Alaska in challenging the health law. Leaders of the Oklahoma House and Senate said Tuesday “they plan to sue the U.S. Congress, president and U.S. Secretary of Health and Human Services to prevent provisions of the act President Obama signed into law last month from taking effect.” “A resolution authorizing the legislative leaders to file the lawsuit and allowing Oklahoma residents to opt out of mandated health insurance is heading toward final passage” and the state’s attorney general, who has initially refused to join the case, “said he would join the lawsuit if required by legislative action.”

This morning, the Senate Health, Education, and Labor Committee (HELP) held its first post-health reform hearings on Sen. Dianne Feinstein’s (D-CA) proposal to allow the federal government to review and reject insurance premium increases in states that don’t already have this authority. President Obama included the idea in his health care plan, but it was kept out of the final bill for budgetary reasons, leaving federal regulators without the ability to protect consumers from unreasonable premium hikes.

Already, CEOs of Cigna and Aetna have hinted that they will increase premiums in the near future and during today’s hearing, AHIP President and CEO Karen Ignangi also suggested that high health care premiums are only a symptom of rising health care costs and said that lawmakers should not fault insurers and their relatively small profit margins for rising prices. She argued that Feinstein’s bill did not address the root cause of rising prices and repeatedly invited the Senators to consider the industry’s cost-containment proposals. Ignagni’s effort to shift the blame for rising premiums was unsuccessful, however. The industry’s profits and salaries have made headlines in recent days and several Democrats questioned Ignagni about the increases. Sen. Jack Reed (D-RI) and Michael McRaith, Director of the Illinois Department of Insurance, caught Ignagni in a contradiction:

REED: How do you respond to Mr. McRaith’s point that publicly traded companies essentially respond to Wall Street their strategy is denying claims and raising premiums above the cost of inflation. That doesn’t seem to be a cost saving strategy.

IGNAGNI: Sir, our members have, are organized to provide the highest quality care for the lowest price to consumers and to business purchasers…Our members are very clear about their fiduciary responsibilities, in terms of maintaining solvency and their responsibilities to consumers…

REED: So they have no responsibility to their share holders?

IGNAGNI: I said that they have fiduciary responsibility. They have responsibilities with respect to solvency…

REED: What’s their primary responsibility? Their fiduciary responsibility is to their share holders.

IGNAGNI: Their primary responsibility in a growing concern…to do the job you have been asked to do by people who purchase your product.[...]

REED: Frankly, we’re having a discussion about firms that go to the Street and say ‘our strategy is we’re going to deny claims and raise premiums above the medical inflation.’

IGNAGNI: Sir, I thought I said this and I apologize if I didn’t say it, but I dont’ know of any company that has gone to Wall Street that says it is in business to deny claims. [...]

McRAITH: There are companies operating around the country with loss ratios of 50% or less. All I would submit is that what Ms. Ignagni is saying is true…then rate review will only enhance and support that position.

Watch a compilation:

Indeed, Ignagni is arguing that compared to other health care stakeholders, insures maintain relatively small profit margins and raise premiums only to keep up with medical inflation and maintain company solvency. And while Ignagni is correct in her analysis, her frame of reference — placing insurance spending within the broader context of overall health care spending — is purposely misleading. Within the context of overall health care spending, insurers’ profits seem small. But within the context companies’ revenues, insurers skim off approximately 15-20 percent of premium dollars for administrative costs and profits and make a good penny, as the astronomical pay increase to WellPoint’s and UnitedHealth’s CEOs suggest.

That said, insurers are not the main drivers of health care spending. Policy makers do need to adopt more stringent systematic cost controls, but if insurers are as efficient as Ignagni says, why would they oppose federal rate review? There is a lot of waste and inefficiency in health care, and insurers are low hanging fruit and not a bad place to start.

The new health care law requires insurers to provide dependent coverage for children up to age 26 for all individual and group policies by September 23, but two of the nation’s largest insurers have agreed to implement the changes earlier. WellPoint and UnitedHealth Group will voluntarily extend coverage to these younger individuals by June 1 and the Wall Street Journal is interpreting the move as an industry effort to rehabilitate its tarnished image:

While not far-reaching, the policy change is a sign that the country’s largest insurer by revenue is moving quickly to comply with the new law’s provisions. The industry got off on the wrong foot with critics right after the law’s passage with a narrow interpretation of the law’s coverage provision for sick children. Moves such as the one UnitedHealth made are likely to build back good will among regulators, Democrats and critics.

This is probably true, although agreeing to a change two months before it’s implemented probably won’t convince anyone of the benevolence of insurers. After all, insurers have been reluctant to allow younger people to stay on their parents policy because they would rather enroll those same individuals in more profitable individual policies. The coming of exchanges, however, will significantly shrink the individual market and possibly diminish insurers’ ability to profit from that market. Adding young and healthy people to their parents’ policy early is a good alternative that keeps young people insured without creating a coverage gap.

Meanwhile, the Department of Health and Human Services — which has been moving quickly to implement reform — has announced that it will establish the “Office of Consumer Information and Insurance Oversight charged with developing and implementing major reforms affecting the private insurance market.” “The new office will design and administer the temporary high-risk pools, establish new rules on medical loss ratios and oversee the state-based health insurance exchanges,” Inside Health Policy reports. According to the federal registry, the office will consist of the following components: Office of the Director (AUA), Office of Oversight (AUB), Office of Insurance Programs (AUC), Office of Consumer Support (AUD) and Office of Health Insurance.

There is also some speculation that the new office will be run by Jon Kingsdale, “who recently resigned as executive director of Massachusetts’ health insurance exchange.”

While the final health care reform law probably resembles the GOP’s 1993 health care plan closer than some of the more progressive alternatives Democrats proposed during the 2008 Presidential election, Republicans and their conservative allies have gone to great lengths to portray reform as a radical government takeover of health care. Organizations like the Heritage Foundation and politicians like Mitt Romney and Chuck Grassley, who have historically supported centrist reform provisions like the individual mandate, state-based exchanges and tax credits to help Americans purchase affordable coverage, are now abandoning their old positions and aligning themselves with conservatives who argue that health reform is unconstitutional. The shift is part of an election strategy designed to convince Americans that the new health care law is a left-wing to expand government control over the health care system.

President Obama, however, has repeatedly credited Heritage and Romney for providing the foundation for several reform provisions, placing some conservatives on the defensive. Just today, Robert Moffit of the Heritage Foundation attempted to distance his organization from national reform:

First, Heritage did not originate the concept of the health insurance exchange. Furthermore, the version of the exchange we did develop couldn’t be more different than that embodied in this law. For us, the health insurance exchange is to be designed by the states. It is conceived as a market mechanism that allows individuals and families to choose among a wide range of health plans and benefit options for those best suited to their personal needs and circumstances. People would have a property right in their health policy, just like auto or homeowners’ policies, and be able to take it with them from job to job. Under the Heritage design, individuals could choose the health plan they want without losing the tax benefits of employer-sponsored coverage. The exchange we propose would be open to all state residents and — very importantly — be free of federal regulation. [...]

For the record, we think that the law’s federal mandate is unconstitutional. Our legal center, led by former attorney general Edwin Meese III, notes that Congress has no authority to force an American to buy any good or service merely as a requirement of being alive.

Yes, in the early 1990s, we, along with other prominent conservative economists, supported the idea of such a mandate. It seemed the only way to solve the “free-rider” problem, in which individuals can, under federal law, walk into any hospital emergency room nationwide and rack up big bills at taxpayer expense.

Two things. First, it’s true that the exchanges and the individual mandate in the final health care law are different than Heritage would have liked, but that, after all is the nature of the political process. The final legislation is a collection of conservative and progressive ideas (more the former and the latter) and one can’t argue that modifying a conservative ideas renders it completely unrecognizable. The new health care law requires each state to establish its own exchange and gives states a great deal of flexibility in running, operating and regulating the new health insurance markets.

Second, Moffit’s claim that Heritage foolishly supported the individual mandate when it was part of a fad in the 1990s is just inaccurate. As Lee Fang points out, Heritage boosted Romney’s health reform plan as recently as 4 years ago, calling the individual mandate “Not an unreasonable position, and one that is clearly consistent with conservative values.”

The fact is, conservatives openly acknowledged the bipartisan nature of health care reform throughout 2009 and are now backing away from the law for purely political purposes. In September 2009, for instance, Rep. Eric Cantor (R-VA) told a town hall meeting that “Republicans and Democrats agree on 80 percent of fixing the nation’s healthcare system.” Rep.Charles Boustany (R-LA), who delivered the Republican response to the President’s congressional address in September, also said, “I would venture to say that we agree on about 80% of the issues right now. It’s just a matter of hashing out those few areas where we disagree, but there’s really not been that kind of real discussion, and it needs to happen.”

Andrew Romano forces Mitt Romney to explain why he continues to defend federal the Massachusetts health care plan while calling for the repeal of its federal cousin, ObamaCare. Romney’s argument boils down to this: health reform should be done on the state level with help from the federal government. “I reject the idea of a federal mandate imposed on states and individuals,” Romney tells Romano. “If instead one said at the federal level, ‘We’re going to give resource flexibility to states to use money they’re already receiving as a way to help the poor buy insurance,’ that says, “All right, we’re using funds that have already been allocated, we’re letting states create their own plans, and we’ll see how that works. And we’ll learn from the experience.”

But didn’t Romney suggest that the Massachusetts plan would be a model for the nation? He explains:

NEWSWEEK: Back in February 2007, you said you hoped the Massachusetts plan would “become a model for the nation.” Would you agree that it has?

ROMNEY: I don’t … You’re going to have to get that quote. That’s not exactly accurate, I don’t believe.

NEWSWEEK: I can tell you exactly what it says: “I’m proud of what we’ve done. If Massachusetts succeeds in implementing it, then that will be a model for the nation.”

ROMNEY: It is a model for the states to be able to learn from. During the campaign, I was asked if I was proposing that what I did in Massachusetts I would do for the nation. And the answer was absolutely not. Our plan is a state plan. It is a model for other states—if you will, the nation—it is a model for them to look at what we’ve accomplished and to better it or to create their own plans.

NEWSWEEK: There are obvious similarities between Obamacare and what you did in Massachusetts. Do you acknowledge that what you did in Massachusetts has become a model for nation under Obama, whether you wanted it to or not?

ROMNEY: I can’t speak for what the president has done. I don’t know what he looks at. He never gave me a call. Neither he nor any of his colleagues [gave me] a call to ask what worked and did not work, and how would they improve upon it and so forth. If what was done at the state level, they applied at the federal level, they made a mistake. It was not designed for the nation.

Let’s bend over backwards, ignore his long history of inconsistency, and give Romney the benefit of the doubt. Perhaps by “nation” he really means 50 different states. In that case, his argument would be the following:

1) Massachusetts reform is unique to Massachusetts.

2) The federal government should let the states reform their own systems as they see fit.

3) States can use the Massachusetts plan as a model, if they wish.

In short, there is no larger role for the federal government in health reform than giving states money to try different experiments. But if you consider this argument on its own merit, you quickly realize that their Romney’s “plan” would lead to serious national inequality and disadvantage the states that need reform the most.

Romney was able to pass and sign health care reform in 2006 because Massachusetts already enjoyed a relatively high insurance rate (10.7% uninsured in 2005, compared to 15.7% national average), a large tax base, robust state regulations and a fairly liberal electorate. Other states don’t have these advantages. Nationally, state uninsured rates “vary from just under 8 percent to almost 25 percent” and, the states with the least resources often have the highest uninsurance rates. They would be most disadvantages under Romney’s state-based approach because they don’t have the economic, political or structural capacity to invest in something as big as health care reform and their populations face more prevalent rates of obesity, diabetes and other expensive chronic conditions. Asking these states to take some federal dollars and just expand coverage (somehow) ignores the reality of state government (almost every state has to balance its budget every year) and the economic challenges states are facing in funding their existing health programs.

Romney’s approach may make for a good sound bite, but in reality it’s a Darwinian solution that would leave the poorest states with the most pronounced health crisis to fend for themselves. If this is really his position, then we should make him own it.

On April 8th, Mitt Romney told a New Hampshire newspaper that the individual mandate was “unconstitutional” and reiterated his pledge to repeal ObamaCare. “I think it’s unconstitutional on the 10th Amendment front,” he said. This week, however, Romney told Kavon Nikrad, a conservative blogger, that he does not support repealing the “unconstitutional” individual mandate or the provision that prohibits insurers from banning coverage to individuals with pre-existing conditions. From the RightOSphere blog:

“You have stated your intention to spearhead the effort to repeal the ‘worst aspects’ of Obamacare, does this include the repeal of the individual mandate and pre-existing exclusion?”

The Governor’s answer:

“No.”

Gov. Romney went on to explain that he does not wish to repeal these aspects because of the deleterious effect it would have on those with pre-existing conditions in obtaining health insurance.

Indeed, while Romney, is doing some awkward kabuki to position himself as a can-do reformer and a conservative Tea Partier, having signed an individual mandate into law on the state level, he understands the insanity of repealing it. Romney has repeatedly defended the individual mandate as a “conservative” policy and has argued that it’s essential for covering every American.

“Everybody in America today has health care,” he said during a recent interview on Fox Business. “If they get sick, even without insurance, they get free care, paid for by government. We said no more of that. No more free riders. We want people taking personal responsibility for getting health insurance if they can afford it.” And, he’s right. The individual mandate creates incentives for otherwise healthy Americans to purchase insurance and may be the the only way to achieve affordable universal coverage. Without a mandate, only the sick who need health care would be motivated to purchase it. The pool of insured would be weighted with sick individuals, forcing the costs of the premium to escalate.

Recently, Romney hinted that he may change his position on ObamaCare if he wins the Republican Presidential nomination in 2012 and take credit for some aspects of the national reform law.

Yesterday, former New York Governor George Pataki (R-NY) officially launched Revere America, an organization dedicated to repealing health care reform. Pataki also backed off his claim that the mandate in Massachusetts’ health care law is “unconstitutional,” telling the Boston Herald that he “misspoke” and really knows nothing about the Massachusetts plan:

“I misspoke,” said Pataki, calling a Herald reporter to clarify his point about an hour after saying the Massachusetts health-care individual mandate crafted under Romney is “unconstitutional.”

In his second call – made after a story was published on bostonherald.com and after a Herald reporter sought comment from Romney – Pataki insisted his comments were about President Obama’s reforms and said he has no idea whether Romney’s and Obama’s plans are alike.

“The only thing I’ve done is read newspaper reports, and in the reports they’ve said (the two plans) were similar,” Pataki said. “I used to be a governor, and when people from out of state came in and told me what New York should do, I didn’t like it. This is a decision for the people of Massachusetts.”

Pataki also appeared C-SPAN’s Washington Journal and accused Democrats of ignoring public opinion and passing health reform without “even following the rules of the Senate.” He said Revere America will be going to be in all 50 states to mobilize the grassroots and “get over a million e-mail addresses of people who would support us in working to repeal ObamaCare and work with us to replace it with true health care reform.”

Asked how he could build support for a campaign to repeal legislation that would lower the deficit, reduce health care spending, and secure and expand coverage, Pataki explained that he would perpetuate misinformation to build on existing public perceptions. “They say it’s going to reduce the deficit. The objective analysis I have seen is that it will increase the deficit by at least a half trillion dollars and probably a lot more over the course of the next decade,” Pataki said. “And the American people know they’re wrong on that. They say they’re going to drive down health care costs, but I think the American people know that this is going to increase health care costs.” Pataki also regurgitated the now debunked claim that the law would require 16,000 IRS agents, claimed that the reform process was “totally done in the dark” and said he doubted anyone read the health care bill before voting for it.

Former Gov. George Pataki (R-NY), who is heading up an effort to petition the government to “repeal and replace” the new health care law, took a shot at Mitt Romney today, telling a Connecticut newspaper that Massachusetts’ health care reform law contained an “unconstitutional” individual mandate:

Former New York Gov. George Pataki blasted the Bay State’s health care reform created under former Gov. Mitt Romney today, telling the Herald it’s “unconstitutional.” He also conceded that Romney is “probably the (Republican) front runner” in the 2012 presidential election.

“I think the idea of what they call an individual mandate … is not just wrong, in all likelihood it’s unconstitutional,” Pataki told the Herald in a telephone interview today [...] Pataki, who would not rule out a 2012 presidential run, is kicking off his push to repeal health care reform at the Paul Revere park on Sunday. He’s started a non-profit called “RevereAmerica.org” and plans to tour campaign hot spots like Iowa and California. “We want to mobilize people who understand our freedom is at risk again and we have to wake up and reclaim our government,” said Pataki. He’s pushing to rake in $15 million for the campaign along with millions of signatures from congressional districts to show politicians where the average American stands.

Pataki’s comments come as a growing number of conservatives are beginning to question Romney’s ability to successfully distance himself from national health care reform, given its similarities to the Massachusetts plan. Since President Obama signed the reform bill, Romney moved quickly to condemn the new law as an abuse of federal power, arguing that health care reform is a right reserved for the states. He has also defended the success of his own, very similar, proposal. Many conservatives, however, don’t believe that voters will make the distinction.

Early last month, The Club for Growth mocked Romney for calling his plan “the ultimate conservative plan” and the CATO Institute has now put together a video explaining the fundamental similarities between RomneyCare and ObamaCare.

The conservative American Spectator is also warning Republicans that a Romney presidential bid could undermine any effort to repeal the national law. “Romney would not be able to credibly campaign against the national health care law,” Phillip Klein wrote today on the AmSpecBlog. “And as a result, were he the Republican nominee, it would kill the movement to repeal ObamaCare.”

Romney himself may even agree with Pataki. He has repeatedly praised the individual mandate for insuring 98% of all Massachusetts residents, but has also argued that the measure violates the sovereignty of the states. “I think it’s unconstitutional on the 10th Amendment front,” he said last week.

The new health care law will add approximately 16 million Americans to the public Medicaid program and private health insurers are positioning themselves to enter this expanded market. For all the talk about government involvement in health care, the state-federal Medicaid program is predominantly filtered through private companies which claim to lower costs by managing care and providing better access to primary doctors.

From the program’s beginnings in the mid-1960s, states have struggled with skyrocketing health care costs and diminishing provider participation (the program’s reimbursement rates are generally lower than private insurers or Medicare). By the 1990s, policy makers began to see managed care as a way to control spending and improve patients’ access to primary care physicians. Approximately 70% of Medicaid enrollees are already covered by some sort of managed-care plan “rather than by a fee-for-service model in which the states simply pay bills for care.”

Now, private insurers are hoping to expand that reach. Yesterday, UnitedHealth Group Inc. released a report “describing a variety of managed-care strategies it says will help cash-strapped states solve budget problems and doctor shortages that hobble the government health-care programs for the poor.” While cash strapped states are strongly considering partnering with private insurers — Florida has five counties that are are administered solely by managed-care companies and legislators are considering measures to bid out the rest of the state — evidence on the degree to which managed care actually accomplishes these goals varies. Medicaid patients in some states seem to have better access to doctors, while other surveys have found that overall improvements in access associated with managed care are minimal.

Ken Terry explains that the real attraction to states is not that manged care is able to significantly lower health care costs, but that it helps states “budget their Medicaid expenditures.” However, “If that budgeting was working so well — in other words, if it meant the states could drive hard bargains with private insurers — they wouldn’t be complaining that Medicaid is eating up more and more of their revenues. And insurance companies wouldn’t be seeing Medicaid as the goose that promises to lay golden eggs”:

The big golden egg, of course, is healthcare reform, which is expected to boost Medicaid rolls by 30 percent nationwide starting in 2014. That windfall isn’t evenly distributed: Texas and California are expected to add about 2 million new Medicaid enrollees each, while Florida anticipates adding 1 million new Medicaid recipients as a result of the federal law. Overall, ten states will increase their Medicaid populations by at least 50 percent.

United argues that moving most of these patients — as well as more of the current Medicaid recipients — into managed care will save about $90 billion. A larger share of the projected savings, United contends, will come from applying managed-care techniques to long-term care. Much of United’s argument rests on the theory that better care coordination reduces costs. Which is a fine argument so far as it goes. So far, however, commercial managed care plans mainly save money by paying doctors and hospitals less than they could earn from fee-for-service plans or Medicare.

It’s unclear how managed care plans will fare in reducing costs over the long term. What is clear, however, is that now that health reform is law and private insurers are positioning themselves to enter new markets, the plan seems a lot less government centered than both opponents and proponents envisioned.

The new federal health care law requires that insurers spend at least 80% of customers’ premiums on medical care in the individual insurance market, and 85% in the employer/group market. Starting in 2011, insurers that don’t meet these requirements will have to issue rebates to consumers “based on the amount insurers’ spending falls below these minimums.” Yesterday, a new report released by the Senate Committee on Commerce Science and Transportation found that while many of the nation’s largest insurers “modestly increased the percentage of premium dollars they spent on medical care in 2009,” the disparities “in medical spending between market segments remained larger than ever.

Health insures, in other words, still view the individual and small group markets as their most profitable sectors and they continue to spend a smaller percentage of premium dollars on actual medical care — shifting a significant amount towards administrative expenses and profits. For example, while the largest insurers used about 15 cents out of every premium dollar for administrative expenses in the large group market, “they used more than 26 cents out of every individual premium dollar for administrative expenses,” the report notes. [Note: the original report says "medical expenses" rather than "administrative expenses." I contacted the staff and they said that this was a mistake.]

Some insurers are already meeting the new federal requirements, while others will have to spend more on medical care to comply with the law:

The analysis found that the largest for-profit health insurers spend a lower percentage of their customers’ premium dollars on patient care than other health insurers. The analysis also found that in the individual and small group markets, health insurers spend a significantly smaller portion of each premium dollar on medical care than they do in the large group market.

Look:

The problem will come when insurers that fall short, try to meet the new minimums. The ratio is closely monitored by Wall Street investors and so insurers will have every incentive to continue spending less on care and increasing profits. They may try to artificially inflate their MLR by reclassifying administrative costs as ‘medical care.’ Already, WellPoint — the nation’s largest insurance company — announced that it has reclassified some of its administrative costs as medical spending in order to increase its medical loss ratio. As the report notes, “By reclassifying these expenses as medical benefits, the executives projected that WellPoint’s 2010 medical loss ratio (which the company calls its “benefit expense ratio”) would increase by 170 basis points, or 1.7%. Because WellPoint expects to collect more than $30 billion in premiums from its commercial health care customers in 2010, this “accounting reclassification” means that the company has converted more than a half a billion dollars of this year’s administrative expenses into medical expenses.”

Health and Human Services Secretary Kathleen Sebelius has written a letter to the National Association of Insurance Commissioners (NAIC) requesting their assistance in defining medical loss ratio (MLR) standards in the new health care law and has issued two formal requests for public comment on how best to define the term. Since the MLR requirements are one of the few ways to prevent insurers from earning outrageous profits before most of reform’s provisions kick in, HHS “and state insurance commissioners will have to remain vigilant and focused on ensuring that consumers get the benefit of the new federally mandated medical loss ratios.” These definitions, in other words, have to be air tight to ensure that companies can’t simply reclassify their expenses.

After President Obama signed the new health care bill into law, large corporations like AT&T, Catepillar and John Deer announced that a provision in the law that preserves the subsidy employers receive for providing retirees with prescription drug coverage, but prevents companies from deducting it from their taxes, would lead to billions in losses. Energy and Commerce Chairman Henry Waxman (D-CA) called a hearing to investigate the claims and Republicans immediately seized on business’ opposition to the provision to argue that the new law would severely disadvantage employers and hurt the economy. Conservatives even portrayed Waxman’s hearings as a “witch hunt” against “companies who dare speak out about the costs and consequences of Obamacare.”

Well yesterday, Waxman unexpectedly canceled the April 21st hearing, but not before releasing the results of the committee’s investigation into the corporation’s claims. Committee staff “reviewed records produced by each company,” met or spoken with representatives of the companies, as well as with a number of industry trade associations” and concluded that while the companies “acted properly and in accordance with accounting standards” in projecting losses from the bill, “the actual impact on annual company cash flows will be only a fraction of the amount of the noncash charges reported to the SEC”:

Although the reported noncash charges are quite large, the impact is spread over a long period of time. The tax change also does not take effect until 2013. The actual impact on the companies’ annual cash flows will be much smaller than the amount reported in the filings. Companies that made the filings calculated the present day value of taxes that will be paid over 30 or more years. In fact, AT&T told the Committee staff that its figure was calculated to “infinity.” [...]

The result is that the annualized impact on each company will be less than the amount charged against earnings. AT&T reported a one-time charge of $1 billion to the SEC, but documents provided to the Committee estimate that the tax change will reduce the value of the subsidy by just $44 million annually. Caterpillar reported a one-time charge of $100 million, but the documents it provided to the Committee estimate that the annual cost will be just $8 to $10 million. While Verizon reported a one-time charge of $970 million, it predicted an annual decrease in net income of $100 million, less than 1% of the $10.4 billion in net income the company reported for 2009.

In fact, when staff spoke to these companies, they acknowledged that reform could help reduce their health care spending. John Castellani, the President of the Business Roundtable, said, “If implemented right, the law has the potential to make employers and employees better off because it could bend the cost curve.” “Should the structural reforms intended to reduce the costs of delivering healthcare under the PPACA ultimately prove successful over time, self-insured companies like AT&T would likely benefit from such reduced costs,” an AT&T representative added.

None of this is very surprising, however, because closing the double dipping provision for retiree benefits does not result in a loss of real wealth. For the last seven years taxpayers have been bribing these companies to continue providing prescription drug coverage to their retirees by paying for 28% of their expenses. AT&T and Boeing cashed the checks and deducted the value of the credit from their taxes. Under the new health reform law, companies are still being bribed, but they’re no longer able to deduct that money from their taxes and so they must revise their future earning projections. They’re revising how much they think they will receive in subsidies in the future.

Last night, Fox News hosted what may have very well been the first conversation about how the constitutional challenges fit into the current state of law. Greta Van Susteren invited Charles Fried, the former U.S. Solicitor General under President Regan, to explain his opposition to the lawsuits. Fried did what few Fox News guests ever attempt: he used Supreme Court precedent to predict how the Court would respond to the lawsuits.

Fried was so certain that the Court would preserve the health law, he promised to eat an Australian leather hat on television if was ever overturned:

VAN SUSTEREN: You have said this lawsuit in Florida is ridiculous. Why?

FRIED: That’s correct, it is ridiculous, because, first of all they say that they are going to pass a statute which will exempt Florida citizens from the reach of the act. If the act is unconstitutional you don’t need it. And if the act is constitutional, it is useless, because we fought a civil war about that. State legislatures can’t just bow out of the constitutional federal statute. So that’s nonsense, and I think any serious person knows that.

So, the question is, is it constitutional? And it seems to me, though there are a lot of things to object in this, and I would be the first to say so, the constitution is not one of them. If you don’t like it, repeal it or amend it. But don’t ask the courts to do the job for you, because they won’t. [...]

VAN SUSTEREN: The issue that will confront the federal judge, and the Supreme Court if it goes on, is whether or not the Commerce Clause gives the federal government the power to do this….And does the constitution in your opinion, sir, enable them?

FRIED: It certainly does. The statute which I have in front of me, I bothered to read it, says that the health insurance industry is an $854 billion dollar industry. That sounds like commerce. The Supreme Court just five years ago with Justice Scalia in the majority said that it is all right under the Commerce Clause to make it illegal for California for residents in California to grow pot for their own use, because that has affect on interstate commerce. Well, if that has affect on interstate commerce, what happens in an $854 billion national industry certainly does.

VAN SUSTEREN: Is there any possibility, in your mind, or any thought that you could be wrong?

FRIED: Well, I suppose I could. But I’ll tell you what, I would be happy to come on this program and eat a hat which I bought in Australia last month made of kangaroo skin.

Watch it:

All of this is a major obstacle for those who argue that the mandate violates the 10th amendment. The Court has decided that the Commerce Clause grants Congress the authority to regulate economic activity among the states. And, since federal laws are supreme to the laws of the states (under the supremacy clause), states have to heed the new mandate requirements. The tenth amendment only provides that states retain powers that are not granted to Congress. (H/T: MMFA)

Yesterday, former Gov. George Pataki (R-NY) announced that he will head a new organization to lead the charge for repealing health care reform. Pataki’s group, Revere America, will launch a nationwide petition drive to “repeal and replace” the health care reform legislation in Boston on April 18 – the 235th Anniversary of Paul Revere’s ride — after which Pataki will “embark on a cross-country tour that will ultimately take the Revere America petition drive to all 50 states.” “Revere America is being launched to counter the forces of liberalism by advancing common sense public policies rooted in our traditions of freedom and free markets, and that will once again make America secure and prosperous for generations to come,” Pataki said.

Pataki appeared on Morning Joe today to explain what those “common sense public policies rooted in our traditions of freedom and free markets” actually are. Here is Donny Deutsch challenging Pataki to name five Republican health care ideas that could replace the existing law:

PATAKI: First of all, we can lower the cost of health care by having true medical malpractice reform….Second of all, we can allow people to purchase across state lines.….Third, put in place health care accounts where you have health savings accounts so you can follow the model that many companies have used where they have comprehensive health care coverage that has a high deductible…. Four, put in place some off the very good things that are in the bill like pre-existing conditions and lifetime caps. And five, undo the taxes that have — are going to be suffering under this new health care bill.

Watch it:

If I’m hearing him correctly, Pataki actually only has 3 ideas to reform the health care system and all three are already part of the bill in one form or another. While the malpractice reform provisions could be stronger, the bill does fund state-based demonstration projects to determine the best way to lower malpractice costs. Americans can buy health care across state lines if their state forms a compact with other states and expects actually expect more people to opt for HSAs under the new health care law (taxes for health savings account withdrawals before age 65 for nonqualified medical expenses will increase from 10 percent to 20 percent, beginning in 2011.)

To be clear, these provisions are not exact replicas of Republican proposals. They’re compromises designed to attract Republican support and appease conservative Blue Dogs. (Which, incidentally, is the very kind of bipartisan approach to politics that Republicans have been demanding since they found themselves in the minority.)

Pataki isn’t arguing that we should repeal this bill and replace it with some new innovative proposal to increase access to coverage and lower health care costs. He wants to repeal a fairly conservative reform bill and replace it with its slightly more conservative uncle. That, to me, sounds like a waste of time that only a man who’s hoping to run for future office would be willing to engage in. But more broadly, if all of the repealers’ ideas are already in law, what does it say about their efforts and…well reform itself?

Controversial Gov. Bob McDonnell (R-VA) has proposed an amendment to the state budget that would withhold “state money for abortions, including cases in which the health of the mother is at risk or the child might be born with a deformity. Under the proposal, money could be spent on abortions in cases of rape, incest or when the life of the mother is at risk” — thus meeting the bare minimum requirements of the federal Hyde Amendment.

Lawmakers will now have “a week to consider the governor’s alterations before returning Wednesday for a one-day reconvened session in which they can override the amendments or write them into law.”

McDonnell’s position is somewhat ironic, however. His new funding restrictions are intended to encourage women to go through with their pregnancies, but his other budget proposals would actually make it more difficult for mothers to obtain government assistance. For instance, McDonnell “proposed capping state spending on comprehensive services for at-risk and troubled children. The change would result in a $9.9 million cut to funding for programs that were already reduced by $86 million over two years.”

Currently, Virginia prohibits public funding for abortion for women eligible for state medical assistance for general health care unless: (1) the physician certifies that the woman’s life or health would be substantially endangered if (2) the pregnancy is a result of rape or incest that has been reported to a law-enforcement or public-health agency; or (3) a physician certifies that the fetus will be born with a gross and totally incapacitating physical deformity or mental deficiency. Moreover, a woman may not obtain an abortion until at least 24 hours after a provider offers a medical explanation of the procedure, the probable gestational age of the fetus and offer to review state-prepared materials about alternatives to abortion.

Virginia, which is already spearheading it’s own constitutional challenge to health care reform, may also soon offer legislation that would strip abortion coverage from the exchanges established under the new health care reform law, a conservative anti-abortion site is reporting.

On Sunday, the New York Times’ Kevin Sack reported on the difficulty Mitt Romney faces in convincing conservative voters that the new health care reform law is substantially different from the reform he signed in Massachusetts. “As he promotes himself as a problem-solving pragmatist, Mr. Romney can justifiably point to the landmark universal coverage law in Massachusetts that he, as governor, proposed in 2006,” Sack writes. “But as he appeals to conservative activists and Republican primary voters, he is trying to draw nuanced distinctions between his Massachusetts law and the federal legislation that shares many of its fundamental elements, including a requirement that people have insurance.”

Currently, Romney is denying that Massachusetts served as a template for national health reform reform, but Sack’s article suggests that the former Governor may be prepared to change his position if he wins the Republican Presidential nomination in 2012:

“I keep on scratching my head,” Mr. Obama said at a fund-raising reception in Boston. “I say, ‘Boy, this Massachusetts thing, who designed that?’ ”

In response, Mr. Romney is reminding audiences that Mr. Obama has cast the Republicans as the “party of no,” devoid of ideas. “And yet,” Mr. Romney said in Bedford, “he’s saying that I was the guy that came up with the idea for what he did. He can’t have it both ways.”

He added, “If ever again somewhere down the road I would be debating him, I would be happy to take credit for his accomplishment.”

Taking credit for ObamaCare shouldn’t be too difficult. Romney is already coming around to supporting key portions of the new health care law. On Monday, Romney appeared on Fox News Business and made the case for the individual mandate and subsidizing insurance to individuals who can’t afford to buy their own coverage. “Everybody in America today has health care. If they get sick, even without insurance, they get free care, paid for by government. We said no more of that. No more free riders. We want people taking personal responsibility for getting health insurance if they can afford it,” he said.

“We said, no, no. If you can afford it you have to buy insurance on your own. Half the people can afford it, bought insurance on their own. No more government subsidy for them. Others we had sliding scale based on income.” Watch it:

Last week, Romney added even more nuance to his position, telling the New Hampshire Union Leader that it was unconstitutional for the federal government to require everyone to purchase insurance coverage. “I think it’s unconstitutional on the 10th Amendment front,” he said.

Yesterday, Nebraska Governor Dave Heineman (R-NE) signed legislation “banning most abortions 20 weeks after conception or later on the theory that a fetus, by that stage in pregnancy, has the capacity to feel pain.” The new rule replaces existing law which already prevents women from seeking an abortion after a fetus reaches viability, which is usually reached at about 24-26 weeks of gestation (or 22-24 weeks after conception).

Both the American Medical Association and the American College of Obstetricians & Gynecologist disavow the “science” behind the claim that a fetus can feel pain at 20 weeks postconception, but the so-called “Pain Capable Unborn Child Act” is more of a political statement than a policy proposal. The bill is “created almost entirely as a vehicle for getting anti-choice legislation challenged and potentially reviewed by the Supreme Court” and grew out of an effort to push one of the nation’s late term abortion providers out of the state:

The Nebraska law grew out of a battle over abortion waged in a far different forum. After an abortion opponent killed Dr. George R. Tiller, a leading late-term abortion provider in Wichita, Kan., last year, Dr. LeRoy H. Carhart, who sometimes worked with Dr. Tiller, said he would carry on his legacy by performing some later-term abortions in his clinic in Bellevue, Neb. Lawmakers in Nebraska were outraged at the prospect of becoming, in the words of one of the state’s leading anti-abortion groups, the next “late-term abortion capital of the Midwest.” Early Tuesday, the state’s nonpartisan unicameral legislature passed the new measure overwhelmingly, 44 to 5.

“I didn’t find this bill,” Mike Flood, the legislature’s speaker said, alluding to Dr. Carhart. “It found Nebraska.” Dr. Carhart could not be reached for comment.

The new law grants exceptions in cases of medical emergency, the pregnant woman’s imminent death, or a serious risk of “substantial and irreversible physical impairment of a major bodily function,” but it’s still ripe for legal challenge. My colleague Jessica Arons has identified at least 3 problems:

1) Under Planned Parenthood of Southeastern Pennsylvania v. Casey, no state can place an undue burden on a woman’s right to abortion before viability, which must be determined on a case by case basis. This bill bans abortion starting at 20 weeks, which is several weeks before most fetuses achieve viability.

2) This bill only has a very narrow physical health exception and a life exception, even though precedent requires exceptions for serious mental health concerns as well.

3) The bill is based on a legislative finding that fetuses can feel pain as early as 20 weeks, when there is no medical consensus on that point and in fact it is hotly disputed. Unfortunately after Gonzales v. Carhart, the legislature may now pass laws based on minority medical views, no matter how fringe and unsubstantiated they are.

“The intention of its supporters is to bring an abortion rights challenge before the United States Supreme Court, where they’re counting on Justice Kennedy to be their swing vote, based on the language he used in his brief from the Gonzalez vs. Carhart decision in 2007. Make no mistake: this is a national issue that impacts us all,” Julie Burkhart of TrustWomenPAC, observes.

Heineman also signed another abortion measure discouraging providers from offering abortion by allowing women to sue doctors that don’t follow a meticulous pre-abortion review process.