The effort will focus on selling the merits of the Patient
Protection and Affordable Care Act to 2.7 million Americans with
little or no health coverage, who are 18-to-35 years old, mostly
male, and largely nonwhite, including many who are black or
Hispanic, officials involved in the planning told Reuters.

The idea is to get them enrolled in private health plans
through online marketplaces that will offer coverage in all 50
states at prices defrayed by federal subsidies, which many
should qualify for because of their lower incomes and lack of
adequate insurance.

Participation of young consumers is central to the success
of the new state healthcare exchanges, and Obama’s reform law,
because the young tend to have little need for medical services
and are cheaper to insure. That will compensate for older,
sicker people who are expected to sign up in droves because the
law bans discriminatory pricing and treatment for those with
preexisting conditions.

Some supporters of the 2010 law have worried in recent months
that the administration was not doing enough to inform this
group, and the public generally, about changes the reforms will
bring. Of particular concern is the word on the healthcare
exchanges, where individuals and families with low-to-moderate
incomes will be able to purchase private health insurance at
prices set according to income.

Current and former administration officials said the
outreach will employ the same methods used in Obama’s reelection
campaign, which relied heavily on social media, grass-roots
organizing and demographics to reach young people, minorities
and women. Members of the young target audience tend to be
concentrated in major metropolitan areas, and about a third are
believed to live in just three states: California, Texas and
Florida.

“Whatever happened in the past 3-1/2 years, this is the most
important moment now because we’re no longer dealing in
abstraction. Millions of people are going to be able to touch
and feel something,” said David Simas, who oversaw opinion
research for Obama’s reelection. He became a deputy senior
adviser to the president in February and is one of the leading
advisers for the campaign.

Due to begin this month, the marketing push will cost
hundreds of millions of dollars and will complement promotions
by private groups including the nonprofit Enroll America, which
is headed by a former Obama White House aide and supported by
healthcare groups, private companies and consumer advocacy
organizations.

Officials say the government outreach will be covered by
about $1.25 billion the administration has scraped from funds
within the Department of Health and Human Services (HHS) and the
original congressional allocation for implementation.

Republicans in Congress have blocked new money for the
effort so they can use its failure as a winning issue in the
2014 congressional midterm election campaign. House Republicans
just voted to repeal the law in what was their 37th attempt to
kill or defund some part of it.

Reuters spoke to several government officials, including
Simas, about the implementation drive.

The objective is to “surround” low-income young adults with
messaging about the healthcare benefits by tapping channels more
apt to reach them: cable television, radio, churches, Facebook,
Twitter, YouTube, online chat rooms and youth-oriented
magazines. The White House and HHS are also in discussions with
celebrities, sports leagues and franchises that may be willing
to help promote coverage.

The Spanish-language cable networks Univision, Telemundo and
impreMedia are already considering a nationwide expansion of
their joint media program, which has been praised by Obama, to
advocate for healthcare reform in California. The three news
competitors have agreed with a private healthcare foundation,
called the California Endowment, to encourage Latinos to enroll
in the state’s health insurance exchange by sponsoring print,
television, radio and Web-based promotions.

One White House official said the youth-targeting strategy
was so important to the success of enrollment that if it didn’t
work, none of the larger efforts would make a difference.

The Affordable Care Act (ACA) – widely referred to as
Obamacare by many Americans – has already begun to bring
fundamental changes to the $2.8 trillion healthcare system
through a series of reforms aimed at lowering out-of-pocket
costs, improving access to preventive care and encouraging new
healthcare business models intended to restrain cost growth.

Beginning Oct. 1, the law will also begin offering
subsidized health coverage to millions of low-to-moderate income
people through the online state-insurance marketplaces and an
expansion of the Medicaid program for the poor in states that
accept the provision. Coverage begins Jan. 1, when the law takes
full effect, and individuals who don’t have it will face a
penalty that begins at $95 in 2014, rising to 2.5 percent of
annual income in 2016.

The government aspires to sign up 7 million uninsured and
under-insured Americans in the first year of reform.

NO HARD SELL

Obama has avoided the bully pulpit since signing the
healthcare legislation into law, according to former advisers
who concluded that strong public opposition would not begin to
change until after the reforms became tangible.

But the president has made two public appearances over the
past month to explain the ACA benefits. During the Oct.
1-to-March 31 enrollment period, he will do more, though
sticking with the soft sell, said administration officials.

Critics complain the White House has adopted too low a
profile on health reform so far, and fear the effort to explain
to a skeptical and in many cases misinformed public is coming
too late to persuade them that participation is a good thing.

One of the most prominent recent critics has had a change of
heart. Democrat Max Baucus, chairman of the Senate Finance
Committee, sounded the alarm in April about how few details were
shared with Congress about outreach efforts. He warned of a
coming “train wreck” if the administration were to fail to
enroll enough Americans for coverage.

The comment, which was zealously seized upon by healthcare
reform’s Republican foes, clearly worried the White House. Since
then, Chief of Staff Denis McDonough has taken on a more
prominent behind-the-scenes role by holding meetings every two
weeks with Baucus on healthcare. He chats as often by phone with
HHS Secretary Kathleen Sebelius.

“I’m more confident about implementation today,” Baucus said
in a statement in response to a query from Reuters. “The
administration has been much better about keeping me and my
colleagues up-to-date on their efforts.”

To prepare for the autumn enrollment, White House officials
say Sebelius and her lieutenant, Marilyn Tavenner, administrator
of the Centers for Medicare and Medicaid Services, will travel
this summer to meet with local leaders and community organizers
as part of a “soft-education campaign” about coming benefits.

By the time the marketing push gains momentum in September
and October, government officials say an important messaging
advantage will be working in its favor.

As many as two-thirds of the intended audience, they say,
have had insurance coverage but lost it after being laid off or
switching to an employer who doesn’t offer it. That means the
message can focus on the cost and relative value of the plans.
Pricing information is still being worked out, but premiums will
run more than the penalty. One fear is that the $95 disincentive
is too low to prompt young people to pay more for insurance they
may not believe they need.

The worry is unwarranted, said Simas. “When you ask a
26-year-old male or female why they don’t have insurance, they
say they can’t afford it – ‘The job doesn’t offer it, I can’t
afford it.’ Rarely will you hear that it’s not important.”

(Reporting by David Morgan; Editing by Michele Gershberg, Fred
Barbash and Prudence Crowther)

In an official interview transcript released on Sunday by
Democratic Representative Elijah Cummings, the manager said he
and an underling set aside “Tea Party” and “patriot” groups that
had applied for tax-exempt status because the organizations
appeared to pose a new precedent that could affect future IRS
filings.

Cummings, top Democrat on the House of Representatives
Oversight and Government Reform Committee conducting the probe,
told CNN’s “State of the Union” program that the manager’s
comments provided evidence that politics was not behind IRS
actions that have fueled a month-long furor in Washington.

“He is a conservative Republican working for the IRS. I
think this interview and these statements go a long way toward
showing that the White House was not involved in this,” Cummings
told CNN’s “State of the Union” program.

“Based upon everything I’ve seen, the case is solved. And if
it were me, I would wrap this case up and move on,” he added.

Cummings, a Maryland Democrat, said he would release a full
transcript of the committee’s interviews with IRS officials by
the end of this week, if the panel’s Republican chairman,
Representative Darrell Issa, does not.

Issa has released his own excerpts of interviews with IRS
employees the committee is conducting jointly, which the
Republican says suggests the added attention given to Tea Party
groups originated from Washington, D.C. and had political
motivations.

Issa vowed to press ahead with the investigation and said
the IRS manager’s comments “did not provide anything
enlightening or contradict other witness accounts.”

“I strongly disagree with … Cummings’ assertion that we
know everything we need to know about inappropriate targeting of
Tea Party groups by the IRS,” the California Republican said in
a statement released by his office.

Revelations that the tax agency set aside conservative
groups for scrutiny has raised a political furor over the past
month, leading President Barack Obama to fire the IRS
commissioner. The House oversight panel, several other
congressional committees and the FBI have launched
investigations.

The Treasury Inspector General for Tax Administration issued
a report on the matter last month finding no evidence of
involvement beyond IRS officials.

Still, Republicans have raised questions about whether the
scrutiny was directed politically at Obama’s opponents and have
sought evidence of any White House involvement.

The House oversight committee has now completed five lengthy
interviews with IRS employees, including four based in the
Cincinnati office where applications for tax exempt status are
handled.

Cummings said congressional investigators now know what
happened based on these interviews.

CINCINNATI SOUGHT ADVICE FROM WASHINGTON

The excerpts of interviews with IRS workers released by
Cummings indicate that the IRS manager and an underling first
decided to contact Washington, D.C. IRS officials for guidance
on the cases from groups aligned with the anti-tax Tea Party
movement.

They did so to consolidate them, as they might be
precedent-setting for future cases, the manager said, according
to the interview transcripts.

It was an unidentified Cincinnati IRS worker who reported to
the manager, identified as John Shafer by committee aides, who
identified the first Tea Party case. That individual has not
been interviewed by the committee yet.

Investigators asked Shafer if he believed the decision to
centralize the screening of Tea Party applications was intended
to target “the president’s political enemies.”

“I do not believe that the screening of these cases had
anything to do, other than consistency and identifying issues
that needed to have further development,” the manager answered,
according to a transcript released by Cummings.

Asked if he believed the White House was involved, the
manager replied: “I have no reason to believe that.”

John Shafer could not be reached for comment.

“They wanted to make sure that it was handled in a way
whereby when other cases came behind it that were similar, that
they would be treated in a consistent way,” the lawmaker said.

Another Cincinnati screener who worked for Shafer, Gary
Muthert, indicated in committee interviews released in part by
Issa last week, that “Washington wanted some cases,” to review.

Democratic committee staff said Muthert’s involvement came
later, after the initial screener and Shafer first sought advice
from Washington about the legal aspects of the newly-emerging
cases.

(Reporting by David Morgan and Kim Dixon; Editing by Maureen
Bavdek and Theodore d’Afflisio)

Representative Elijah Cummings, top Democrat on the House of Representatives Oversight and Government Reform Committee, which is conducting the probe, said excepts of the IRS manager’s interview with investigators shows the agency set aside “Tea Party” and “patriot” groups to ensure that treatment of their applications for tax-exempt status was consistent.

“Very significant,” Cummings told CNN’s “State of the Union” program. “He is a conservative Republican working for the IRS. I think this interview and these statements go a long way toward showing that the White House was not involved in this.”

“Based upon everything I’ve seen, the case is solved. And if it were me, I would wrap this case up and move on,” he added.

The Maryland Democrat also said he would release a full transcript of the committee’s interviews with all IRS officials by the end of this week, if the panel’s Republican chairman, Representative Darrell Issa, does not.

But Issa vowed to press ahead with the investigation and said the IRS manager’s comments “did not provide anything enlightening or contradict other witness accounts.”

“I strongly disagree with … Cummings’ assertion that we know everything we need to know about inappropriate targeting of Tea Party groups by the IRS,” the California Republican said in a statement released by his office.

Revelations that the tax agency set aside conservative groups for scrutiny has raised a political furor over the past month, leading President Barack Obama to fire the IRS commissioner. The House oversight panel and the FBI have launched investigations.

Republicans have raised questions about whether the scrutiny was directed politically at Obama’s opponents and have sought evidence of any White House involvement. But Cummings said congressional investigators now know what happened.

According to CNN, investigators asked the Cincinnati manager if he believed the decision to centralize the screening of Tea Party applications was intended to target “the president’s political enemies.”

“I do not believe that the screening of these cases had anything to do, other than consistency and identifying issues that needed to have further development,” the manager answered, according to CNN.

Asked if he believed the White House was involved, the manager replied: “I have no reason to believe that.”

Cummings said conservative group applications were set aside after a screener identified a case that appeared to be precedent-setting for others.

“They wanted to make sure that it was handled in a way whereby when other cases came behind it that were similar, that they would be treated in a consistent way,” the lawmaker said.

(Reporting by David Morgan; Editing by Maureen Bavdek)

The vote, by a divided Food and Drug Administration advisory committee of outside health experts, could modestly enlarge the market for Avandia in the United States and lay the groundwork for further research into the drug’s health risks. FDA will now take the vote into consideration for a final decision on how the pill also known by the generic name rosiglitazone can be used.

The committee did not consider a specific change in protocol. But 13 experts on the 26-member panel who backed modification said current restrictions that require prescribing physicians and pharmacists to be certified should be relaxed or eliminated after a reexamination of Glaxo safety data settled longstanding concerns about the danger of death from cardiovascular disease.

“In general, this drug doesn’t look any different than any other diabetes drug,” said Dr. William Hiatt, a cardiologist from the University of Colorado, who was among seven experts who backed lifting restrictions altogether.

Five committee members favored keeping the current sales restrictions, while one voted to withdraw Avandia from the market altogether.

Glaxo, which no longer plans to promote Avandia, issued a statement saying the company would work with FDA as it considers its decision. “We continue to believe that Avandia is a safe and effective treatment option for type 2 diabetes when used for the appropriate patient and in accordance with labeling,” Dr. James Shannon, Glaxo’s chief medical officer, said in a statement.

The British drugmaker’s stock closed nearly 1.5 percent lower in London trading before the committee voted.

Avandia was once the world’s best-selling treatment for type 2 diabetes, with annual sales of $3.2 billion.

In 2010 its use in the United States was heavily restricted and it was withdrawn from the market in Europe because of the possibility of increased risk of heart attack and stroke. Only 3,000 people in the United States take it today, down from about 120,000 just before the restrictions were put in place.

Much of the advisory committee’s two-day meeting focused on a Duke University reexamination of a Glaxo safety study known as Record that confirmed initial findings of no significant increased heart risk from the drug. That reassured some experts that earlier concerns with the quality of the research had been unwarranted and encouraged support for the restrictive protocols, while retaining continued guidance on potential dangers for patients and care providers.

A DEPARTING TRAIN

But others said the original data was incomplete and compiled through a flawed study design, while other research pointed to the possibility of significant increased risk of cardiovascular death.

“When you look at the overall totality of evidence, it is not sufficient enough to either implicate or exonerate rosiglitazone versus cardiovascular risk,” said advisory panel member Dr. Sanjay Kaul of the Cedars-Sinai Heart Institute.

Several committee members endorsed suggestions for a major new clinical trial to determine precisely the drug’s risks in the face of a growing worldwide diabetes threat. But other experts concluded that years of negative publicity made funding major research unfeasible except for new diabetes treatments now in the pharmaceutical pipeline.

“The train has left the station,” said Gerald van Belle, director of the Clinical Trials Center at the University of Washington.

Experts including the advisory committee’s chairman, Dr. Kenneth Burman of the Washington Hospital Center, favored the creation of a registry to monitor the health of patients who currently take the drug if major studies into safety and efficacy were not an option.

Some experts view Avandia as a potential alternative to other diabetes treatments, including insulin, that could become more important as the incidence of obesity and diabetes grows, bringing with it a host of costly chronic ailments ranging from heart and kidney disease to blindness and dementia.

“When treating diabetes we really do need drugs that lower blood sugar without causing hypoglycemia, and there’s not a lot that’s available,” Dr. Ellen Seely of Harvard Medical School.

“When you’re dealing with individual patients, you come up often against dead ends on what you can do. And it’s important to have options,” she said.

But panel members agreed the market potential for Avandia may never again be large.

Glaxo has settled lawsuits filed by tens of thousands of U.S. patients who had taken Avandia and claimed Glaxo failed to inform them about safety risks. Several thousand other cases remain pending.

The drugmaker last July agreed to pay $3 billion to settle what U.S. officials called the largest case of healthcare fraud in U.S. history. The agreement resolved allegations that Glaxo failed through 2007 to provide the FDA safety data on Avandia and that the company improperly marketed other drugs.

(Reporting by David Morgan; Editing by Gary Hill and Cynthia Osterman)

The two-day FDA advisory committee meeting is not expected to bring about a major boost in sales for the onetime blockbuster product. But its findings may help revive the credibility of the British company’s original research and shed light on today’s U.S. regulatory approach to the health risks posed by new drugs.

Avandia was once the world’s best-selling treatment for type 2 diabetes, with annual sales of $3.2 billion. Its use was heavily restricted in 2010, though, because of the possibility of increased risks of heart attack and stroke. It was withdrawn from the market in Europe in 2010, and only 3,000 people in the United States take it today.

The advisory panel session on Wednesday opened with a critical assessment of a Duke University “readjudication” of Glaxo’s Record safety study that is the basis for the expert panel’s deliberations over the next two days. FDA staff said in briefing documents earlier this week that the Duke analysis backed Glaxo’s safety findings for Avandia but also found that scores of smaller trials raised questions over whether the pill increases heart risks.

Dr. Thomas Marciniak, medical team leader of FDA’s Division of Cardiovascular and Renal Products, warned panelists that the readjudication by the Duke Clinical Research Institute cannot be considered independent. The effort was financed by and conducted in collaboration with the drugmaker, which has also paid thousands of dollars in consulting fees to Duke’s lead investigator, he said.

“They got it right for what they were allowed to say,” said Marciniak. Some Record documents were redacted, he said, and original records of potential adverse events were deleted.

“The readjudication was limited because it relies largely on the original database and source documents in collaboration with GSK,” he added.

Marciniak said it would have been better for FDA to handle all the data on Avandia with company authorization. He offered to treat Glaxo Chief Executive Officer Andrew Witty and five of the CEO’s colleagues to dinner at an expensive London restaurant if his views prove wrong.

NO AVANDIA PROMOTION

Glaxo has said it has no plans to promote Avandia again, even if the FDA panel recommends lifting restrictions on sales of the drug, whose generic name is rosiglitazone maleate.

“The FDA is putting significant resources behind this meeting, but even if they allow Avandia to return to full marketing strength, I don’t think that would do much for Glaxo from a business standpoint,” said Morningstar analyst Damien Conover.

Conover said there was only a slight chance that the meeting will prompt the FDA to ease sales restrictions significantly.

“But if they do, that could signal that the FDA is a little more willing to accept more side effects than it has in the past,” Conover said.

Glaxo has settled lawsuits filed by tens of thousands of U.S. patients who had taken Avandia and claimed the company failed to inform them about risks. Several thousand other cases remain pending.

European regulators required the Record safety trial because of concerns that drugs in Avandia’s class – called thiazolidinediones – may increase the risk of heart failure.

The trial met its primary objective by showing that Avandia, when combined with either metformin or a member of an older class of diabetes pills called sulfonylureas, was at least as safe as the combination of metformin and a sulfonylurea.

But the FDA clamped down on Avandia’s use in September 2010 after most members of an FDA advisory panel voted that the Record data raised significant concerns that the drug might indeed pose a greater risk of heart attack and stroke than standard treatments, including fellow thiazolidinedione Actos (pioglitazone) from Takeda Pharmaceutical Co’s.

Although the FDA allowed Avandia to remain on the U.S. market, the agency commissioned the Duke Clinical Research Institute to analyze results of the Record trial to better assess the drug’s safety and to examine criticisms that the trial was poorly designed and its data was mishandled.

But in a briefing document on Monday ahead of the two-day meeting this week, the FDA said the study’s methods and analyses passed muster with the Duke group. Moreover, it said the group, part of Duke University’s Medical School, appeared to agree that Avandia was not associated in the Record trial with increased risk of heart attacks and stroke.

Avandia had been on a downhill slide since 2007, when Dr. Steven Nissen, head of cardiology at the Cleveland Clinic, said an analysis of 42 studies showed Avandia increased the risk of a heart attack by a 43 percent.

The FDA now requires heart-safety data for new diabetes drugs because of the Avandia experience. Sales of the drug, which was approved in 1999 and makes patients more sensitive to their own insulin, plunged after the negative publicity.

Glaxo last July agreed to pay $3 billion to settle what U.S. officials called the largest case of healthcare fraud in the nation’s history. The agreement resolved allegations that the company failed through 2007 to provide the FDA with safety data on Avandia and marketed other drugs improperly.

(Additional reporting by Ransdell Pierson in New York; Editing by Lisa Von Ahn)

In her first public comments on an issue Republicans have sought to portray as a scandal, Sebelius vigorously defended her efforts to rally private support for a summer outreach campaign to persuade uninsured Americans to sign up for subsidized health coverage through new online state insurance marketplaces.

Republicans in the House of Representatives have launched a probe of her fundraising efforts, while party members in both the House and Senate have asked for outside probes to determine whether the secretary was illegally trying to circumvent Congress or violated ethics rules by seeking funds from companies she regulates.

In testimony before the House Education and the Workplace Committee, President Barack Obama’s top healthcare adviser said her actions were sanctioned by long-standing health law and match steps taken by her predecessors to promote new program roll-outs in the past, including Medicare drug benefits.

“I could legally solicit funds from anybody regulated by our office. I chose not to do that. But promoting a public-private partnership? You bet,” Sebelius said.

Obama’s Patient Protection and Affordable Care Act is expected to extend health coverage to well over 25 million uninsured Americans during the next decade through subsidized marketplaces and an expansion of the Medicaid program for the poor.

But as administration officials have raced to implement the law by January 1, Republicans have repeatedly blocked public money for the effort and now accuse Sebelius of seeking private support for implementation in an attempt to circumvent them.

The Department of Health and Human Services has said that since March, Sebelius phoned the nonprofit Robert Wood Johnson Foundation and tax adviser H&R Block to seek financial assistance for Enroll America, which will serve as a private sector flagship for a campaign coordinated with outreach efforts by states and the federal government.

“Those are the only two conversations I’ve had about contributing resources,” she told lawmakers.

Neither the foundation nor H&R Block is regulated by HHS.

But Sebelius disclosed on Tuesday that she also phoned medical products maker Johnson & Johnson, Catholic health system Ascension Health and private healthcare system Kaiser Permanente to talk about Enroll America. All three are regulated by HHS, but the secretary said she asked none for money.

Johnson & Johnson spokesman Ernie Knewitz said Sebelius talked to the company in April and that it has made no contribution to Enroll America. Ascension Health and Kaiser Permanente had no immediate comment.

CONVERSATIONS ACROSS AMERICA

Representative Tom Price, a Georgia Republican, asked about media reports that she solicited funds from the healthcare industry.

“No, sir. That is not true,” she replied.

Representative Trey Gowdy, a South Carolina Republican, wanted to know what she would say if healthcare executives felt pressured to contribute money: “Your response would be what? That they’re just too easily pressured or that they misunderstood the conversation?”

“I can’t answer what they felt,” Sebelius said. “I have had conversations with people all across this country including insurance companies, pharmaceutical companies and others using the statutory authority that is clearly given to the secretary of health.”

In tense questioning, Gowdy pressed Sebelius to identify who in the administration she consulted in planning the fundraising phone calls: “I’m looking for a name. Can I get a name? I’m looking for a name and you said ‘we’. Who’s we? Did you ever discuss it with anyone at the White House?” he asked.

“No, sir,” she replied.

Separately, Senator Orrin Hatch, top Republican on the Senate Finance Committee, which oversees healthcare, said Sebelius had effectively admitted pressuring companies she regulates. “That’s bullying plain and simple and promotes a ‘pay to play’ environment that undermines the public trust in government,” Hatch said in a statement.

Enroll America, closely aligned with the Obama administration, has dozens of supporters from healthcare companies to special interest organizations such as AARP, the lobby group for older Americans.

It has been trying to raise money for an outreach effort expected to get under way late in June as government officials prepare to open the new marketplaces for enrollment on October 1.

Reform advocates say the effort is crucial to the success of the marketplaces, or exchanges, which are the lynchpin for the future of the entire reform package.

“It was always recognized from the day the president signed the bill that there would never be enough government funding and that there would not be enough opportunity if this is only a government-run program,” Sebelius said on Tuesday.

(Reporting by David Morgan; Editing by Michele Gershberg and Dan Grebler)

The findings, published in the journal Health Affairs, could
point to a larger-than-expected impact from the bitter political
feud engulfing a major provision of the healthcare reform law
due to take full effect next year.

The law calls for Medicaid coverage to be expanded to people
with earnings of up to 133 percent of the federal poverty level,
but a Supreme Court decision last year allowed states to decide
whether to participate.

Researchers in two separate Medicaid studies say leaving
more adults without coverage also risks buoying mortality rates
by blocking access to care, leading to higher costs. The poverty
line currently stands at $11,490 for an individual and $23,550
for a family of four, and the current threshold for Medicaid
eligibility means the services are often limited to dependent
children and their parents, pregnant women and those with severe
disabilities including the very old.

Republican-led states such as Arizona, Kansas and Maine are
nearing the end of legislative debates on whether to join the
Medicaid expansion.

“We’re trying to sort of inform the debate. If a state
policymaker has the goal of covering as many people as possible
and reducing the financial risk for that population, expanding
Medicaid is the most rational choice,” said Carter Price,
co-author of a study by RAND Corp, a nonpartisan think tank that
receives government funding.

“It’s also better for the state fiscally because states fund
a lot of programs for uncompensated care,” he added.

BIGGER TOLL

Under Obama’s 2010 Patient Protection and Affordable Care
Act, the federal government is offering to pay states 100
percent of the cost of expanding Medicaid for three years
beginning in 2014, declining to 90 percent in subsequent years.

Before the Supreme Court decision, the Medicaid expansion
was expected to extend coverage to more than 16 million
uninsured people, with incomes of about $15,500 for an
individual and $32,000 for a family of four.

The latest estimate from the Congressional Budget Office
anticipates 3 million fewer Medicaid recipients than predicted
before the Supreme Court ruling.

“Our numbers are certainly higher than theirs. But we’re all
in the three-to-four million range,” Price said.

The RAND study found that 3.6 million people, all of them
living below the federal poverty line, would be locked out of
Medicaid coverage in 14 states with Republican governors who
oppose the expansion: Alabama, Georgia, Idaho, Iowa, Louisiana,
Maine, Mississippi, North Carolina, Oklahoma, Pennsylvania,
South Carolina, South Dakota, Texas and Wisconsin.

Those states would forego an estimated $8.4 billion in
federal funding for the Medicaid expansion in 2016 alone, while
continuing to incur an annual $1 billion cost from caring for
the uninsured, RAND found.

The figures could climb higher. According to the nonpartisan
Kaiser Family Foundation, a total of 20 states have failed to
move forward on the expansion. Eight more remain undecided.
Those include some with large populations, such as Ohio,
Michigan and Arizona, where Republican governors who favor
expansion have run into legislative opposition from within their
own party.

Some states have decided to let would-be Medicaid recipients
obtain subsidized private insurance plans instead through new
online marketplaces being set up under the health law. But
unlike Medicaid, those plans carry copay and deductible charges
that would make it harder for people living below the poverty
line to cover out of pocket.

RAND found that if all 14 states in its study opted out of
the expansion, they would impede a projected reduction in
mortality rates. Fully expanding Medicaid would reduce mortality
by 90,000 lives per year, the study said. The number would fall
to 71,000 without those states.

A separate study led by researchers at the University of
Wisconsin looked at a state health program that covers childless
adults with incomes of up to 200 percent of the federal poverty
level.

The program, launched in 2009, offers less-generous benefits
than the Medicaid expansion that Wisconsin has rejected. But
within 12 months of enrollment, beneficiaries had increased
outpatient visits 29 percent and emergency room visits by 46
percent. At the same time, costly in-patient care fell 59
percent while preventable hospitalizations dropped 48 percent.

(Editing by Michele Gershberg and Matthew Lewis)

Based on a memo released by senior administration officials,
about 5 million consumers could be able to choose from a variety
of plans from at least five insurance companies with coverage
that meets new quality standards set down by the 2010 Patient
Protection and Affordable Care Act.

Each insurance company applicant would offer 15 separate
plans on average.

The administration did not provide a state-by-state
breakdown. Officials, who spoke on condition of anonymity, said
some markets now dominated by one or two insurers may not see
significant change.

The data was described as preliminary but officials said it
was encouraging as an early indicator of consumer choice and
competition that could help restrain health insurance costs and
help some avoid the sticker shock that Republicans and some
analysts have predicted.

Healthcare analysts cautioned that competition alone would
not guarantee affordable rates or convenience.

Dr. Arthur Kellermann of RAND Health said it was important
to have enough plans to provide choices and promote competition.
But “having a zillion plans to pick from may be bewildering for
people coming into a market they’re not that familiar with.”

The Obama health plan is under political pressure from
skeptical Republicans as well as Democratic lawmakers worried
that a troubled rollout could hurt their chances in the 2014
midterm elections.

The state marketplaces are expected to attract 7 million
enrollees beginning Oct. 1. The markets, or exchanges, are seen
as the linchpin for the law’s package of sweeping reforms.

The data in the memo is based on insurer applications to
sell plans in 19 states, including the huge markets of Texas and
Florida, where the administration is setting up federal markets.
Data also comes from states including California that have
released data on their own marketplaces. All these states
account for some 80 percent of anticipated enrollees, or about
5.6 million people.

All told, the administration will run exchanges in 33 states
and provide substantial support in two others. Fifteen states
and the District of Columbia are working to establish their own
marketplaces. All exchanges are slated to begin operating on
Jan. 1, when the reform law comes into full force.

Some analysts have forecast rate increases of 30 percent or
more for the exchanges, which will offer individuals and small
groups greater coverage levels with a broader range of benefits
than are often available in today’s marketplace.

A report issued on Thursday said rate hikes of up to 60
percent could occur in states with federal exchanges. The report
was released by Center Forward, a Washington coalition led by
former Democratic Representative Bud Cramer that aims to find
common ground between Republicans and Democrats in Congress.

The administration will not release cost data for the
federal exchanges until September. But officials said the level
of participation so far could suggest enough competition to
restrain cost growth and pointed to preliminary forecasts for
state-run exchanges in California, Oregon and Washington that
suggest lower-than-expected costs.

In any case, by purchasing coverage through the
marketplaces, consumers with low-to-moderate wages can qualify
for federal subsidies that would limit their insurance premiums
to somewhere between 2 percent and 9.5 percent of annual income.

The White House memo said three-quarters of states with
federal exchanges would see at least one new insurer enter the
market with plans for individual coverage.

One in four insurance company applicants are new to the
individual market, and about two-thirds of new entrants are
looking at states that today have one dominant insurer.

New insurers include state cooperative plans set up in 6
states with the help of federal loans, according to separate
market data. The states are Arizona, Louisiana, New Jersey,
South Carolina, Tennessee and Wisconsin.

The administration also said it will offer multi-state plans
in at least 31 states in 2014, with coverage expanding to all 50
states and the District of Columbia no later than 2017.

As part of a politically embattled administration effort to
rally support for the landmark reform law, Sebelius appealed to
physician assistants as care providers who treat large numbers
of people with little or no health insurance, including those in
Republican-controlled states that have rejected the 2010 Patient
Protection and Affordable Care Act.

Sebelius, Obama’s top healthcare adviser, has run into
mounting opposition from Republicans over efforts to marshal
private sector support for a public outreach campaign that could
determine whether Obama’s signature domestic policy achievement
succeeds or flops, just as the 2014 midterm election campaign
gets under way.

Republicans in Congress, who are blocking public funds for
reform implementation, say Sebelius may have acted improperly by
seeking private donations for a nonprofit group that will help
lead a public outreach campaign this summer. The administration
says Sebelius’s actions were fully authorized by law.

“It’s absolutely critical that we reach out to uninsured
Americans and get them ready to sign up for coverage,” Sebelius
told a meeting of the American Academy of Physician Assistants,
which has 46,000 members.

“You’re already a trusted source of health information,” she
said. “They come to you with questions about their future. And
for you to learn about the new options coming their way and
helping to share that information could be a huge bridge that we
need.”

Physician assistants are not medical doctors but practice
medicine as part of medical teams in hospitals, clinics and
physician practices. They represent a fast-growing job segment
in healthcare, with 6,000 new entries each year to a field that
currently includes about 100,000 practitioners.

Under the reform law, millions of uninsured people will
become eligible on Jan. 1 for subsidized private health
insurance, either through new online state marketplaces or an
expanded Medicaid program for the poor.

The Obama administration has already committed hundreds of
millions of dollars to a summer publicity campaign to persuade
young, healthy uninsured people to sign up for coverage. Large
numbers are needed to avoid a potential spike in costs that
could occur if new customers are limited to sick or older people
who are costlier to insure.

Tuesday’s appeal by Sebelius could help reach uninsured
populations in isolated rural and urban settings, where doctors
are in short supply and physician assistants are often the
caregivers who patients see.

Since January, the health secretary has spoken to a wide
range of “stakeholders” including companies and nonprofit groups
to encourage nonfinancial support for reform implementation and
public outreach, according to HHS officials.

Sebelius’s remarks to physician assistants followed on the
heels of a $150 million program to use health centers as health
insurance enrollment sites by hiring and training thousands of
new outreach staff.

She said physician assistants have considerable experience
with the uninsured and understand that many have given up on the
idea of being able to afford coverage or live in a state whose
leaders oppose the healthcare reform law.

“Connecting uninsured and underinsured patients that you
already serve with quality health insurance that they may need
for their future is one of the best things that we can do to
advance their health,” she said.

(Reporting by David Morgan; Editing by Leslie Adler)

On top of the troubles the administration is facing over its handling of the attack on the Benghazi mission, the Internal Revenue Service’s targeting of conservative groups, and the Justice Department’s seizure of Associated Press phone records, Republicans hope to target Health and Human Services Secretary Kathleen Sebelius.

They are questioning her soliciting of funds on behalf of a non-profit group, called Enroll America, from two private entities, a practice which if not unprecedented is at the very least unusual. Federal law bars officials from soliciting any organization or individual with whom they do business or regulate.

Enroll America is run by the president’s former campaign backers to do something Congress refused to fund: sell “Obamacare” to the public.

An HHS statement last week said that since March Sebelius solicited financial donations for Enroll America from H&R Block Inc, the tax preparation company, and the Robert Wood Johnson Foundation, a philanthropic entity devoted to public health issues. Asked Monday for a list of all solicitations before or after March, an HHS spokesman referred Reuters to the department’s original statement.

Neither H&R Block nor the Robert Wood Johnson Foundation are regulated by HHS, the department’s spokesman said, so there was nothing improper or illegal about soliciting them.

Enroll America is intended to serve as the private sector flagship for a massive public outreach campaign intended to get millions of uninsured Americans to sign up for subsidized insurance coverage through new online marketplaces, or exchanges, that will begin open enrollment on October 1.

NO COMMITMENT

H&R Block said it has made no commitment to Enroll America. “We received a phone call from the Secretary during which the Secretary discussed supporting Enroll America,” the company said in a statement. “While we took her suggestion under consideration, we have made no commitment,” it said.

The Robert Wood Johnson Foundation said in a statement that it had “recently approved new funding” for Enroll America, bringing its total contributions to the group to nearly $14 million since 2010. It did not say how much of that, if any, came in response to Sebelius’ solicitation.

It’s the second controversy over the novel method used by the Obama administration to promote its agenda: using campaign-style organizations staffed with loyalists and former campaign or White House aides to mobilize grassroots support for government policies. The first involved Organizing for Action, an independent non-profit group seeking to harness both the energy and personnel from Obama’s re-election campaign in support of the president’s legislative agenda.

The Enroll America issue is complicated by the fact that Republicans in Congress have succeeded in blocking proposed government spending that otherwise could have been used to achieve the ends pursued by the independent group.

That has given lawmakers, such as Republican U.S. Senator Lamar Alexander, an opening to allege a violation of the federal “anti-deficiency” act, which bars agencies from accepting “voluntary” services except when authorized by law.

In defense of the help the department is getting from Enroll America, an HHS spokesman said it is permitted by a section of the Public Health Service Act that allows the secretary to encourage support for new and innovative health programs.

Some conservative legal experts say finding a clear-cut violation of the law is a long shot. “I would be skeptical of the claim that it’s illegal, unless someone made a really compelling case. However, the appearance is such that it at least raises questions,” said Jonathan Adler, a law professor at Case Western University who opposes healthcare reform.

But legal issues may be the least of the concerns for supporters of the healthcare law.

They worry that a political storm over Obamacare, with congressional hearings likely, could discourage private donors to Enroll America and jeopardize the administration’s ability to find the funds needed to reach a public that is already largely unaware of the healthcare reforms.

One of the biggest concerns is that younger, healthier people will not sign up for health plans on the exchanges, driving the costs up for coverage of the people who do sign up.

“The danger” to the health program, said former Obama healthcare adviser Nancy-Ann DeParle, “is that people don’t come and enroll and get insured. That leaves the health plans in the exchanges trying to cover people without any young, healthy people, and it drives the price up.”

REPUBLICANS PROMISE PROBES

Republicans certainly see an opportunity.

“Our guys on the Hill think this is the fourth scandal,” said Republican strategist Matt Mackowiak. “It fits into that narrative Republicans are building not only about incompetence in the executive branch but also dishonesty.”

“This is a good issue for Republicans,” Mackowiak added. “We want to maximize it.”

The Republican-controlled House Energy and Commerce Committee has launched an investigation into the fundraising to determine whether it involved regulated companies and has asked nearly a dozen healthcare firms including major insurers such as Aetna Inc, a member of Enroll America’s advisory council, to say whether they have received solicitations.

Republicans in the House and Senate have also called on the non-partisan Government Accountability Office to investigate.

“People are watching it very closely. We’re hearing about it from constituents, people who are incredibly concerned,” said Republican Representative Marsha Blackburn.

Enroll America was launched in September 2011 in part by leaders of Families USA, a key backer of the healthcare reform effort as it moved through Congress in 2009 and 2010. It is led by Anne Filipic, who worked on public engagement projects in the Obama White House. It’s managing director, Chris Wyant, directed Obama’s eastern Ohio field operation during the 2012 election campaign.

It includes on its boards of directors and advisers, executives of Teva Pharmaceuticals USA, Blue Shield of California, Kaiser Permanente, and CVS Caremark as well as officials of major health-related trade associations, such as the American Hospital Association and the National Association of Health Underwriters.

Filipic said she is confident that Enroll America will get the funds it needs for the outreach campaign. “We feel really good that we’ll have the resources we need,” she said.

(Reporting by David Morgan; Additional reporting by David Ingram and Fred Barbash; Editing by Fred Barbash, Martin Howell and Eric Beech)