The New York Times

Jun. 24: Washington - President Obama, whose vilification of insurers helped push a landmark health care overhaul through Congress, warned industry executives at the White House on Tuesday not to use the bill 'as an opportunity to enact unjustifiable rate increases that don't boost care and inflate their bottom line.'

Mr. Obama made his remarks in the East Room of the White House after a private meeting with executives of leading health insurance companies and with state insurance commissioners who regulate them. As the new law is being implemented, the White House wanted to issue a pointed reminder to insurers and the public that the president intends to monitor the industry's behavior.

'There are genuine cost drivers that are not caused by insurance companies,' Mr. Obama said. 'But what is also true is that we've got to make sure that this new law is not being used as an excuse to simply drive up costs.'

The rules, which take effect Sept. 23, prevent insurers from refusing to cover children with pre-existing conditions; impose strict limits on insurers' ability to cap coverage during any given year; end lifetime coverage caps; and end the practice known as rescission, in which companies, citing minor paperwork mistakes, cancel coverage for people who get sick.

Under the new regulations, companies will be prohibited from rescinding coverage except in cases involving fraud or intentional misrepresentation of facts.

The White House is concerned that health insurers will blame the new law for increases in premiums that are intended to maximize profits rather than cover claims. The administration is also closely watching investigations by a number of states into the actuarial soundness of double-digit rate increases.

'Our message to them is to work with this law, not against it; don't try and take advantage of it or we will work with state authorities and gather the authority we have to stop rate gouging,' David Axelrod, Mr. Obama's senior adviser, said in an interview. 'Our concern is that they not try and, under the cover of the act, get in under the wire here on rate increases.'

The law does not grant the federal government new authority to regulate health care premiums, which remains the province of state insurance departments. But with important provisions taking effect this summer and fall, the Obama administration has repeatedly reminded insurers and the public that it will expose industry pricing to what the health secretary, Kathleen Sebelius, has called a 'bright spotlight.'

The White House meeting follows the release on Monday of a survey by the Kaiser Family Foundation, a nonprofit health policy research group, finding that premiums for the policies most recently bought by individuals had increased by an average of 20 percent.

'The survey shows that the steep increases we have been reading about over the last several months are not just extreme cases,' said Drew Altman, the foundation's president.

Mr. Obama's message to insurers puts the industry on notice and positions the White House politically in case voters start to link premium increases to the new law. With the law expected to play a significant role in the midterm elections, the president has been using his platform to sell the bill's most immediate benefits and, by extension, to defend Democrats in Congress who risked their careers to vote for it.

The insurers have attributed this year's increases to skyrocketing medical costs and to the economic downturn, which has prompted healthier consumers to forgo health insurance, leaving a sicker and costlier pool to cover.

'Our companies are receiving rate increase requests from hospitals across the country of 40, 50 and 60 percent,' said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, a trade group. 'That has a direct impact on the cost of health care coverage.'

The new law requires the health secretary to work with states to establish a process for annual reviews of 'unreasonable increases in premiums.'

Administration officials said Monday that they were still writing regulations to define 'unreasonable increases.'

Mr. Obama's approach to the health insurance industry has rarely been subtle, starting with his campaign, when he spoke of his dying mother's struggle to persuade her insurer to cover her cancer treatments.

Las Vegas Review-Journal

Jun. 23: Lawyers for the federal government have asked a judge to throw out a challenge by Nevada and 19 other states to the health care overhaul law.

The request came in a 79-page motion filed Wednesday in U.S. District Court in Pensacola, Fla. That is the jurisdiction where 20 states seek to block implementation of the Patient Protection and Affordable Care Act, signed into law March 23 by President Barack Obama.

The challenge seeks to have the law declared unconstitutional in part because it includes a mandate that people buy some form of health insurance, a requirement opponents of the law say exceeds the authority of Congress.

Lawyers working on behalf the U.S. Department of Health and Human Services disagreed, saying in their motion that the mandate is critical for the law to achieve its goal of extending health insurance by 2019 to 32 million who cannot afford it.

“Plaintiffs have no standing to raise the claim, and even if they did, Supreme Court precedent establishes that regulation of economic decisions such as how to pay for medical services is valid under the Commerce and General Welfare Clauses of the Constitution,” the filing said.

Lawyers for the states have until Aug. 6 to respond. A judge will hear oral arguments Sept. 14. On Thursday, Gov. Jim Gibbons, who has led the charge to include Nevada in the lawsuit against the health care law, blasted the arguments in the filing.

“Nothing in the Justice Department’s motion filed last night changes my view, we will prevail,” Gibbons said in a statement. “This is not acceptable, and it is illegal.”

The law has been the subject of contentious debate in Nevada. The latest salvos have come between Gibbons and Attorney General Catherine Cortez Masto, who in March refused to follow Gibbons’ demands that she file a lawsuit on behalf of the state to block the law.

Masto argues the lawsuit is futile. Gibbons has said the health care law will increase the state’s Medicaid costs $613 million by 2019. When Masto refused to take the case, Gibbons hired Las Vegas lawyer Mark Hutchison to work on a pro bono basis. A filing fee of less than $5,000 came from donations from the public.

Las Vegas Review-Journal

Jun. 18: The lawyers for two drug companies that came out on the losing end of a half-billion-dollar verdict in the first trial related to the valley’s hepatitis outbreak want the judge who heard the case to block the award.

“On May 7, 2010, plaintiffs were awarded a $500 million jury verdict on punitive damages that is grossly excessive, unsupported by the evidence, and in violation of defendants’ due process rights,” Mark E. Tully and U. Gwyn Williams of Boston wrote in court papers.

Opposing attorney Robert Eglet replied that the “defendants’ hyperbole that this is an ‘astronomical’ punitive damages award should be recognized as blatant fear mongering designed to distract this court from the simple issues before it.”

Eglet represented plaintiff Henry Chanin, who contracted hepatitis C after undergoing a colonoscopy four years ago this month at one of three now bankrupt clinics run by Dr. Dipak Desai, who recently was named in a 28-count criminal indictment.

A jury awarded Chanin, the headmaster at The Meadows school in Las Vegas, and his wife, Lorraine, a combined $505 million verdict in both compensatory and punitive damages.

The jury put Teva Parenteral Medicines Inc. on the hook for $356 million, and co-defendant Baxter Healthcare Corp. was liable for $144 million in punitive damages. Teva manufactured the sedative propofol, and Baxter distributed the drug.

The crux of the lawsuit was that the companies sold inadequately labeled 50-milliliter vials of the drug to small clinics despite evidence that the large vials were being used on multiple patients. Eglet in his opposition said Teva and Baxter were aware of at least 148 prior cases elsewhere in the United States of infection because of misuse and did nothing.

Tully in court papers said the Supreme Court of the United States “has held that grossly excessive or arbitrary punitive damages awards are violative of a defendant’s due process rights” and established three guideposts to help judges determine the constitutionality of such awards. They include consideration of the reprehensibility of the defendant’s conduct; the ratio of the punitive damages award to the actual harm inflicted on the plaintiff; and how the award compares with similar cases.

Tully in court papers asked district Judge Jessie Walsh to reduce the award to a “single digit” ratio over the $5 million compensatory award the jury granted. He argued the U.S. Supreme Court has said any punitive damages awards in excess of four times the compensatory award “might be close to the line of constitutional impropriety.”

Eglet disagreed, saying the defendants misrepresented how the jury arrived at the figure. When properly calculated, he argued, the ratio is 27 times for Teva and 11 times for Baxter.

Nevada law exempts product liability judgments from a cap on damages. The defendants and critics of the jury award question the relationship between Eglet’s law firm, Mainor Eglet Cottle, and Walsh. Records show that firm and its attorneys contributed $40,000 to her 2008 judicial campaign. Eglet said the contributions are a “red herring” designed to discredit “a fine judge.”

Walsh was not assigned the case until late 2009, and not until the plaintiffs and defendants each objected to other judges being assigned the case.

Regarding the punitive damages awarded to the Chanins, Tully suggests $5 million is closer to being reasonable than is $500 million. Eglet countered by arguing the defense ignored a key factor in the judgment, the reprehensible conduct of the defendants.

Associated Press

Jun. 21: Indianapolis - People who buy their own health insurance have been hit lately with premium hikes that far exceed increases in the premiums for employer-sponsored coverage, according to a new survey from the Kaiser Family Foundation.

The nonprofit foundation, which is separate from health insurer Kaiser Permanente, said recent premium hikes for individual coverage averaged 20 percent. Some customers were able to switch plans and pay less so people paying on their own actually wound up paying 13 percent more on average.

That hike tops last year's average 5 percent annual increase for employer-sponsored family coverage and almost unchanged premiums for employer-sponsored single coverage, though foundation Vice President Gary Claxton said the comparisons come with qualifications.

The individual insurance survey asked respondents for their most recent premium increases, which can happen more or less frequently than the annual increases mostly seen in the group market, he said.

About 14 million Americans under age 65 receive health insurance through the non-group or individual market, according to the foundation. In contrast about 157 million U.S. residents get their coverage through an employer.

Some insurers, like Anthem Blue Cross in California, drew heavy criticism this year after requesting premium increases of 20 percent or more from their individual customers. Analysts who follow the insurance industry say reports of those increases helped re-ignite the health care reform debate.

Congress then passed in March a reform bill that aims to offer health coverage to millions of uninsured people and help people buy individual coverage through exchanges that will be launched in 2014.

Kaiser conducted its survey online in March and April. It polled 1,038 randomly selected people across the country about their latest premium increase.

Of the 77 percent who reported being asked for an increase, only 16 percent chose to switch plans by either buying a less-expensive policy or finding another insurer.

The study also found that 45 percent of the respondents said they bought their own coverage because they are self-employed or small business owners.

Las Vegas Review-Journal

Jun. 23: The main promise of ObamaCare was that it would cost less. But it’s a ridiculous claim. The notion that a huge new health administration bureaucracy can really be assembled without adding costs or that any government-run health system can save anyone money without rationing, a common feature of European socialized medicine schemes runs counter to common sense and experience.

The claim was further revealed as a fraud when the Congressional Budget Office last month released new estimates predicting the health care overhaul will likely cost about $115 billion more over the first 10 years than originally projected bringing the estimated cost of the scheme to about $1 trillion.

And now to the president’s second major promise: that people who like their current coverage will be able to keep it. “If you like your health care plan, you’ll be able to keep your health care plan, period,” Mr. Obama declared in a speech to the American Medical Association a year ago. “No one will take it away, no matter what.”

But now, an early draft of an administration regulation finds that many employers will be forced to make changes to their health plans under the new law. That means, “In just three years, a majority of workers 51 percent will be in plans subject to new federal requirements, according to midrange projections in the draft,” The Associated Press reports.

The Obama regulations for “grandfathered plans,” telegraphed four months ago, “take a sledgehammer to ... that pledge” that the average American will be able to keep his health care plan, Philip Klein warned on his American Spectator blog back on Feb. 22. “All of the new requirements proposed by Obama would increase premiums, and by definition, alter the composition of those insurance plans.”

Says James Gelfand, health policy director for the U.S. Chamber of Commerce: “What we are getting here is a clear indication that most plans will have to change.”

Senate Minority Leader Mitch McConnell, R-Ky., said it shows Mr. Obama’s assurance that Americans would be able to keep the plans they currently have was “a myth” all along. “Since its passage, Republican arguments against the bill have been repeatedly vindicated.”