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Tuff-Stuff

03/22/10 8:36 AM

#309900 RE: HoosierHoagie #309899

Google (GOOG -0.5%) may reveal the closure of its Chinese search engine as soon as today, putting pressure on the firm to expand in Japan and South Korea to foster growth.
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Tuff-Stuff

03/22/10 8:39 AM

#309902 RE: HoosierHoagie #309899

PALM redder again.U have PUTS this period?
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Stock Lobster

03/22/10 8:47 AM

#309909 RE: HoosierHoagie #309899

Nulllification fight begins: Health-Care Fight Shifts to States, Agencies After House Vote

By Alex Nussbaum

March 22 (Bloomberg) -- Health legislation passed yesterday by the U.S. House changes some rules immediately on insurance coverage while leaving much of the fight over how to remake the medical system to federal regulators, states and courts.

Insurers led by UnitedHealth Group Inc.and WellPoint Inc. must cover children with pre-existing health problems at once under the legislation, headed for a Senate vote, and let parents keep children on their insurance plans through age 26. The insurers will also be banned from revoking coverage because of severe illness and from limiting lifetime or annual benefits.

Beyond those changes, it will be up to U.S. regulators and state lawmakers to structure the marketplaces where health plans will compete, write the rules governing their profit and decide which medical benefits must be covered. While insurers may gain as many as 32 million customers, the potential for pumped-up profits remains unclear, said Sheryl Skolnick, a health-industry analyst at CRT Capital Group LLC.

“There’s going to be a whole other round of uncertainty associated with the implementation of this,” she said in a telephone interview March 19. “There’ll be much, much more to fight on and much, much more to write on.”

The U.S. Health and Human Services Department will have two years to set penalties on hospitals with high readmission rates and longer to test new payment systems for Franklin, Tennessee- based Community Health Systems Inc., the largest U.S. chain, and its rivals. Officials in Idaho and Virginia have promised lawsuits over the bills’ mandate that all Americans get insured.

Senate, Obama

Democrats must shepherd the package of changes through the U.S. Senate before President Barack Obama can sign their $940 billion health-care overhaul, one of his top domestic priorities, into law. The measures subsidize coverage for uninsured Americans, financed by Medicare cuts to hospitals and fees or taxes on insurers, drugmakers, medical-device companies and Americans earning more than $200,000 a year. The tax on those earners begins in 2013.

The subsidies and the expansion of Medicaid, the joint federal-state program for the poor, won’t kick in until 2014. Other changes will take effect with Obama’s pen stroke.

While the measure immediately bans insurers from barring coverage for children with pre-existing conditions, adults won’t be protected until 2014. Until then, they’ll be eligible to join high-risk pools funded by $5 billion in federal grants.

The drug industry, led by New York-based Pfizer Inc., will begin offering discounted drugs to elderly Medicare patients next year, part of $80 billion in concessions agreed to by pharmaceutical companies. Generic copies of biotechnology drugs will be allowed for the first time, though the Food and Drug Administration must draft rules governing the process.

Revealing Costs

Insurers also will have to reveal how much of members’ premiums they spend on medical care, as opposed to executive salaries or other administrative costs. Next year, they’ll owe a rebate to customers if the insurers spend less than 80 percent on benefits for people in individual or small-group plans.

How heavy a burden that imposes on industry will depend on the health and human services department, said Carl McDonald, an Oppenheimer & Co. analyst in New York, in a March 17 note to clients. The cap will be easier to meet if it’s applied companywide rather than to individual lines of business, he said.

The agency also will set formulas for Medicare payments, define the “essential benefits” that insurers must provide and draft rules on how carriers verify claims and pay doctors. Health and Human Services Secretary Kathleen Sebelius, who has spent weeks criticizing insurers’ “jaw-dropping” rate increases, will have the final verdict, McDonald said.

Out From Spotlight

“Over the next couple of years, HHS will be consistently churning out regulations and documents explaining exactly how health reform will be implemented,” he said. “Given the stance of this administration toward health insurers over the past year, it’s hard to see how much of this will be favorable.”

Insurers may benefit by exiting the spotlight of the current political debate, said Len Nichols, a health economist at George Mason University in Fairfax, Virginia. Their arguments that premiums are rising because medical costs are outpacing inflation may hold more sway with government actuaries, he said in a telephone interview.

“It’ll get out of the blatantly political and into the hands of folks who are more used to dealing with these issues,” he said. “It will move the conversation from the headlines to the arena of the actuarial gladiators, which is probably where it should be.”

Health Shares

Health insurance company shares have gained 71 percent in the past 12 months, as measured by the six-member Standard & Poor’s 500 Managed-Care Index, led by the 124 percent increase for Coventry Health Care Inc. of Bethesda, Maryland. WellPoint, based in Indianapolis, is the biggest U.S. health plan by enrollment, and its shares have gained 80 percent.UnitedHealth, of Minnetonka, Minnesota, is second. Its shares have gained 61 percent over 12 months.

Starting in 2014, states have their say. The legislation leaves it to them to set up and run the online marketplaces, known as exchanges, where customers will comparison-shop for coverage. Among other powers, the exchanges will be able to banish plans for premium increases deemed to be unjustified.

Lawmakers may merge exchanges with neighboring states, exposing carriers to more competition. They could set up government-run insurance plans for low-income buyers ineligible for Medicaid to pool their bargaining power or apply for federal waivers to impose stricter rules on insurers.

The legislation also creates an Independent Payment Advisory Board to suggest cuts in spending by Medicare, the government health program for the elderly and disabled, that could threaten payments for drug and device-makers. Starting in 2014, the panel’s recommendations would take effect unless federal lawmakers substitute their own reductions.

A tax on high-cost “Cadillac” policies offered by health plans kicks in in 2018. The industry also faces about $60 billion in additional fees under the health bill through 2018, and more beyond, though it was able to postpone the levy until 2014.

“We suspect that over time, the industry lobby may find ways to chip away at those payments,” said Dave Shove, a BMO Capital Markets analyst, in a March 19 note. “For now, we consider this a successful exercise in kicking the can further down the road.”

To contact the reporter on this story: Alex Nussbaum in New Yorkanussbaum1@bloomberg.net.

Last Updated: March 22, 2010 00:00 EDT
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Stock Lobster

03/22/10 9:06 AM

#309922 RE: HoosierHoagie #309899

BL: Obama May Pay Price for Pushing `Political Chips' on Health-Care Overhaul

By Edwin Chen and Julianna Goldman

March 22 (Bloomberg) -- Barack Obama achieved what every Democratic president since Harry Truman has attempted when the U.S. House passed a health-care overhaul. Now he’ll find out what price he and his party may pay for the victory.

The bill’s passage, which affects 17 percent of the nation’s economy, came without a single Republican vote, a measure of the partisan divide over the issue that has fueled distrust of Congress and damaged Obama’s approval ratings.

“There’s no doubt that he’s pushed a lot of his political chips in the middle of the table,” David Axelrod, a senior White House adviser, said in an interview. “If we had not been successful, I think there would have been a lot of crepe hanging in this town, and most of the crepe would have been hung on this building. And he knew that.”

“What was on trial here was not just whether we could solve the health-care problem, but whether we could solve any problem,” Axelrod said.

Republicans complain about both the substance of the $940 billion bill and the process by which it was passed. Democrats considered how to defend their vote for it during this year’s congressional election campaigns.

“This obviously is hugely important to the president, but you have to realize that there are some people who took a vote that will probably cost them their election,” said New York Representative Anthony Weiner, a Democrat. “I hope that the administration sees this as not only a triumphant moment, but also a little bit of a humbling one.”

Scale Back

Obama will likely be forced to scale back energy and climate-change legislation, several House members said.

In remarks last night after the House acted, Obama thanked Democrats for rising “above the weight of our politics.”

“This wasn’t an easy vote for a lot of people, but it was the right vote,” he said at the White House.

At one point in January, when his prospects looked bleak, the president said he’d be willing to serve just one term if that was the cost of delivering on health care, which he has made the center of his domestic agenda.

He persisted as one obstacle followed another: Deadlines came and went, and finally his party lost a Massachusetts Senate seat held by the late Edward Kennedy since 1962, after Republican Scott Brown campaigned against Obama’s plan.

After Brown’s victory deprived Democrats of the 60 Senate votes they needed to stop Republican delaying tactics, some top aides urged Obama to seek a less-sweeping health-care overhaul while Republicans stepped up their calls to start over.

Obama rejected that advice. The legislation he’s about to sign will provide coverage for tens of millions of Americans, impose “the toughest insurance reforms in history,” as he put it on March 20, and set the U.S. on course toward universal medical insurance.

‘Opportunity Cost’

Still, Obama’s victory leaves him depleted. “There has been a large ‘opportunity cost’ that the president and the Democratic Party have paid for going down this road,” said William Galston, a onetime domestic policy adviser to President Bill Clinton.

Obama is unlikely to find either Democratic or Republican willingness to work on issues of mutual concern.

“The president just has a limited ability to ask Democrats to cast any more tough votes going forward,” said Vin Weber, a Republican strategist and former congressman from Minnesota.

Said Representative Baron Hill, an Indiana Democrat, “I feel like I am walking the plank.”

“In the short term, it’s going to cost me,” Hill said. “It remains to be seen whether or not people will see the benefits that are in the bill 10 years out.”

‘Huge Price’

Obama and Democratic allies have already begun selling those benefits, convinced that many consumer-protection features will become evident later this year -- and be appreciated before Election Day.

To be sure, not all Republicans say the president’s victory presages gains for their party in the November midterm elections.

“I believe the Democrats should pay a huge price for this,” said Darrell Issa, a California Republican, “but I am not going to predict that they will.”

Within his own party, Obama used the soft power of persuasion more than the arm-twisting associated with Lyndon Johnson, aides and advisers said.

The vote brought him closer than any president to putting the U.S. on a path to universal health coverage. In November 1945, seven months into his presidency, Truman proposed a national health-care program.

‘Unpopular Votes’

White House spokesman Robert Gibbs said the health-care debate wouldn’t cause Obama to think small, arguing that the administration’s successes are cumulative.

Some analysts disagree with that calculation.

The president, starting with the economic-stimulus bill, “pushed Democrats into casting a lot of unpopular votes,” said George Edwards, a presidential historian at Texas A&M University in College Station, Texas. “And now people will be saying: ‘Don’t ask me to cast more that are going to end my career.’”

Edwards said the divisions created by the health-care fight create some possibilities. Obama may “emphasize things that have more support, that are less divisive, that are more positive -- jobs and the economy,” he said.

To contact the reporters on this story: Edwin Chen in Washington at EChen32@bloomberg.net; Julianna Goldman in Washington at jgoldman6@bloomberg.net

Last Updated: March 22, 2010 00:48 EDT
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Stock Lobster

03/22/10 9:16 AM

#309929 RE: HoosierHoagie #309899

HAL $30 Puts, in from Friday: