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The latest news on Obamacare from Business Insider

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    bev veals

    WASHINGTON (AP) — Coping with advanced cancer, Bev Veals was in the hospital for chemo this summer when she got a call that her health plan was shutting down. Then, the substitute insurance she was offered wanted her to pay up to $3,125, on top of premiums.

    It sounds like one of those insurance horror stories President Barack Obama told to sell his health overhaul to Congress, but Veals wasn't in the clutches of a profit-driven company. Instead, she's covered by Obama's law — one of about 100,000 people with serious medical issues in a financially troubled government program.

    Raw political divisions over health care have clouded chances of a fix for the Pre-Existing Condition Insurance Plan, leaving families like Veals and her husband Scott to juggle the consequences. That's not a good omen for solving other problems that could surface with "Obamacare."

    "You don't advertise one thing and then give the customer another thing," said Veals, 49, who lives near Wilmington, N.C. "I finally felt for the first time going through this cancer that I had something dependable, and somebody pulled the plug."

    In a statement, the federal Health and Human Services department said the program "continues to provide excellent coverage." But the department said it was unable to provide current enrollment numbers, which might reflect the impact of belt-tightening this summer that led North Carolina and 16 other states to turn their programs over to federal officials.

    Known as PCIP, the program was intended as a temporary lifeline for people denied insurance because of medical problems. It's supposed to provide coverage at premiums that healthy people would typically pay. PCIP will end Jan. 1, when Veals and other enrollees will be able to transition to new insurance marketplaces where they may be able to find lower-cost plans.

    Jan. 1 is also when Obama's law will forbid insurers from turning away people in poor health. At the same time, virtually all Americans will be required to have coverage. Many who are currently uninsured will be able to get tax credits to help pay premiums.

    Part of the problem with PCIP stems from a decision by the president and Congress more than three years ago to cap funding at $5 billion. Some experts warned that might not be enough to last through the end of 2013.

    Veals is a breast cancer survivor now battling colorectal cancer. A runner, she has participated in more than 125 fundraising races for cancer research. Her husband Scott is self-employed, a slow-motion replay operator for televised sporting events.

    Bev Veals had been uninsured for 27 months before she was able to get on the North Carolina PCIP plan early in 2011. She considers herself a strong supporter of Obama's law.

    But even with insurance, deductibles and copays for cancer care strain the budgets of most families. And that doesn't count lost wages and expenses not covered by insurance.

    "It starts as a hand-packed snowball that someone starts pushing down the hill," said Veals. "It gains momentum and speed, it gets bigger and bigger, and swallows everything in its path."

    The more than $3,000 extra the Veals will have to pay this year "is not discretionary money," she explained. "This is heat-the-house-in-the-winter money."

    When her home health nurse called her at Duke Cancer Center about the health plan changes, Veals was on a chemotherapy pump. Her first thought was they missed a payment. Then she remembered her premium was set for automatic payment and wondered if their account was low. Her mind racing, she worried somebody had hacked their finances.

    Scott Veals called the North Carolina PCIP plan and learned it was being turned back over to the federal government on July 1 because of financing problems. After more digging, he found out their premiums would go down somewhat in the federal plan, to $420 a month.

    But there was a catch: They had already met their deductible in the North Carolina plan, and also reached their annual out-of-pocket maximum of $6,250.

    With the federal plan, they would have another deductible of $1,000 for the rest of 2013, and a total of $3,125 in out-of-pocket costs before reaching that plan's catastrophic limit. Deductibles and copayments shift some financial responsibility to patients.

    "We are paying 18 months of deductibles and out-of-pocket cost for one year's worth of coverage to two insurance companies," said Scott Veals.

    The problems with PCIP bubbled up in February, when federal officials unexpectedly announced an enrollment freeze. Although fewer people had signed up than originally expected, very costly cases were draining its budget.

    A few months later, federal officials gave states running their own PCIP plans an ultimatum: take on some financial risk or turn the programs back to Washington at midyear. In those 17 states, Washington put in new cost-sharing requirements to help keep the program financially viable through the end of the year.

    If the administration saw problems coming, Obama's budget did not reflect it. The president did not request any new funds for PCIP.

    The No. 2 House Republican did make an attempt to pump more money in, but it was fraught with politics. Majority Leader Eric Cantor of Virginia proposed to divert funds from elsewhere in the health care law, unacceptable to Democrats. His idea also failed to get Republican support.

    "Our elected officials, some of whom have been impacted by cancer, must come together to identify a bipartisan solution to fund this program for the remainder of 2013," said Emily Shetty, who handles federal policy and lobbying for the Leukemia & Lymphoma Society.

    Veals and her husband say they are looking forward to full implementation of the health care law next year. But getting through the next few months will be a struggle.

    "We both knew there would be bumps along the road but we never thought there would be this kind of bump," she said.

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    Eric Cantor

    House Republican leadership has a new plan to appear to try to defund Obamacare without really doing so, and it's not making anyone happy.

    It's a strategy predicated on the idea that Republican activists are stupid. Many of them are stupid. But they're not stupid enough to fall for this.

    Here's the background. Congress must pass a new continuing resolution by Sept. 30 to keep the federal government open for business. Conservative Republicans want that bill to contain no money for implementing the president's health care law. Obamacare defunding won't pass the Senate, so if Republicans insist on it, they're likely to force a government shutdown, which would be very unpopular.

    So House Majority Leader Eric Cantor is proposing to send two bills to the Senate: One that keeps the government open and spending about as much money as it has been, and another that amends that spending bill to defund Obamacare. Then, Senate Democrats will be able to pass the former and send it to the president's desk, while defeating the latter.

    Under this strategy, House Republicans get to pass an Obamacare defunding bill, Senate Democrats get to pass a bill that includes spending on Obamacare, and the government stays open. Everyone's happy, except of course for conservative activists who actually want Obamacare defunded.

    Here's why Cantor feels compelled to pursue a strategy that is sure to antagonize his base. If they don't get sidetracked by a fight over Obamacare, Republicans do have a real goal in the upcoming spending fight: They want to preserve all of the spending cuts they got in budget fights in 2011, except cuts to the defense budget, which they want to partially restore.

    And that's what the forthcoming Cantor bill would do: It would keep spending at the prescribed levels from the 2011 Budget Control Act, including sequestration cuts, plus $20 billion in added spending on the military. What's unclear (until we see bill text) is whether that added $20 billion will be available to spend; because of the arcane process created by the BCA, you can authorize added spending, but it can't actually be spent unless you also raise specified spending caps.

    Here's the key quote from National Review's writeup of the proposal:

    A GOP leadership aide says the odd structure is necessary to prevent Senate Democrats from abandoning the spending cuts in the sequester. “Consistent with the Meadows letter [the letter signed by many House Republicans demanding that Obamacare be defunded], House Republicans will force Senate Democrats to consider defunding Obamacare as part of the [continuing resolution] debate, while minimizing the risk that we lose sequester-level funding. It’ll now be up to Harry Reid to once again be responsible for raising premiums and hurting job growth by funding Obamacare,” the source says. 

    If Republicans want to be able to drive the amount of federal spending after Sept. 30, they have to be able to pass a bill out of the House that (1) limits spending to a low level, around sequestration levels and (2) is free of poison pills such as Obamacare defunding. If they can't pass a bill, or they pass a bill that looks unserious, whatever passes the Senate will be seen as the default position for what the government will do if it's not shut down. That might mean spending more money.

    But House Democrats won't vote for a bill that aligns with Republican spending priorities, meaning Cantor will need nearly all of his caucus to vote for the Republican CR, and many Republicans are insistant that a bill should defund Obamacare. So while Cantor's approach looks stupid—and a lot of conservatives are apoplectic—without it, House Republicans' only option may be handing control over the terms of the CR to Senate Democrats.

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    doctorApproximately 5,000 new graduates enter primary care training each year. The problem is, we need a lot more than that.

    The U.S. will face a shortage of more than 90,000 primary care physicians by 2020 and 130,000 by 2025, according to nonprofit firm the Association of American Medical Colleges (AAMC).

    But it gets worse. Under the Affordable Care Act, also known as Obamacare, millions of formerly uninsured people will have access to health care. It's estimated that 14 million people will be enrolled by 2014, which means the demand for physicians is crucial in the coming years. Not to mention America's population is aging fast.

    Primary care doctors already have to see more patients than non-primary doctors on a daily basis and they don't get much time to spend with each patient, according to a new study conducted by Nerdwallet Health. They also make, on average, 65% less than non-primary care doctors, yet are required to go through similar years of higher education, completing eight years of undergraduate and graduate education and at least three years in residency, for a total time investment of more than a decade.

    Physicians who work in gastroenterology, orthopedics, and radiology — the top ranked medical specialties — have an average salary of $365,000, whereas physicians who work in pediatrics, family, and internal medicine — the lowest ranked medical specialties — bring home around $177,000 annually.

    After graduation, the median annual stipend for residents and fellows is around $55,750, yet 79% of medical school graduates acquired education debts of over $100,000 in 2012, the study found. The average medical school debt last year was $166,750.

    When you consider high tuition cost, years of intense study and training, and an influx of patients primary care doctors are faced with while making considerably less money than other speciality doctors, it makes sense that medical students want to maximize their incomes by choosing a higher-paying specialty.

    Below is a chart by Nerdwallet Health comparing doctor compensation with other factors, including total hours worked and weekly patient visits among the 15 most common medical specialties:

    medical specialties

    What should be done to fix this shortage problem? Should medical school take a step to encourage students to go into primary care? Please let us know in the comments section.

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    ted cruz sincere hand over heart

    Last night on his MSNBC show, Chris Hayes praised the Democrats in Colorado's State Senate who voted for tighter gun restrictions and lost recall elections because they did so:

    The importance of politics is not to get politicians elected, as an end to itself, but the point is to win tangible improvements in people's lives. Progressive victories only come when we push the system right up to the edge it can take. And the risk you run when you do that is some people will lose some elections. And you know what? That is okay. Life goes on. Victories, the right kinds of victories, those endure.

    If you swap the word "progressive" in Hayes' statement for "conservative," that could be Sen. Ted Cruz (R-Texas) talking about Obamacare.

    Over the last few days a lot of Republican political operatives have been griping, and liberals have been crowing, about how conservative activists and congressmen are being so "unreasonable" by insisting on defunding Obamacare as a condition to keeping the government open. Establishment Republican operatives in D.C. have a different agenda—they want to keep discretionary spending down and admit defeat, at least implicitly, on Obamacare—and the defunding push is interfering with their efforts.

    Establishment Republicans point out that the "defund Obamacare" strategy is doomed. If Republicans shut down the government over a demand that Obamacare be defunded, they'll become hugely unpopular, and then they'll eventually "have" to reopen the government on Democrats' terms, with Obamacare still going into effect and more money being spent across the government than Republicans could have otherwise demanded.

    But why does becoming hugely unpopular mean you have to fold? If House Republicans are really and truly willing to die on the hill of defunding Obamacare, they can do it. Nobody can make them bow to popular opinion and pass a continuing resolution that funds Obamacare implementation. House Republicans can shut down the government all the way to January 2015 and force a default on government bonds if they have the resolve to do so. They would tank the economy and lose the 2014 elections in the process, but the important victories do not come without costs.

    The GOP establishment's objection to this—it would be a substantively terrible policy choice that would also cost them their jobs—appears superficially like it makes sense. But conservative activists sent Republicans to Washington to break the government, not to find ways to make it work over conservative objections. The incompatibility of Republican leaders' goals with their base's priorities isn't the base's fault.

    SEE ALSO: Here's What It's Like To Be A Republican Voter In NYC

    Join the conversation about this story »

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    pennsylvania governor tom corbett

    Even though conservatives want to resist Obamacare implementation in any way they can, nine of 30 Republican governors have pushed for their states to participate in Obamacare's Medicaid expansion. It looks like that number is about to rise to 10.

    According to various publications including Politics PA, Pennsylvania Gov. Tom Corbett (R) will announce on Monday a plan for his state to expand Medicaid. The federal government will pay for 100% of the cost of expanded Medicaid until 2016 and then 90% thereafter. Generally, expanded Medicaid will cover people with family incomes up to 133% of the poverty level; people with higher incomes will buy subsidized coverage through Obamacare exchanges.

    Corbett, like other Republican governors, is in a tough position. Conservatives are obsessed with blocking Obamacare and they don't want states to participate in any way, even if the federal government will pay substantially all the costs. But when Republican state officials decline to participate, they will have to explain to both medical providers and potential Medicaid beneficiaries that they turned down free federal money just to spite the president.

    The hospital situation will become especially untenable in 2014. The federal government will cut so-called "disproportionate share" payments to hospitals that are meant to compensate them for treating the uninsured, because the Medicaid expansion should reduce the number of uninsured patients. Without added Medicaid payments to offset the reduced disproportionate share payments, some hospitals will close. And Medicaid-blocking Republicans will take the blame.

    Some Republican officials, like Gov. Jan Brewer (R-Ariz.), have been smart enough to understand this dynamic and decided to take some political hits now to have an easier 2014. Others, like Gov. Scott Walker (Wisc.) and Gov. Bobby Jindal (La.) have blocked the expansion, pleasing the conservative base now but setting them up for political problems down the road. Walker, in particular, has relied on a very narrow political coalition to secure his and his Republican legislature's victories. Declining Medicaid expansion will give Democrats a powerful political issue against him in 2014.*

    Corbett, who faces his own uphill battle for re-election, seems to understand that he can't afford to take the blame for needless hospital closures next year. The remaining question is whether Republicans in the state House of Representatives will allow him to move to safer political ground.

    *The situation in Wisconsin is more complicated than in most states and less politically perilous for Walker than I thought. Walker and his Republican legislature passed a plan that uses a patchwork of the state's BadgerCare Medicaid program and federal exchanges in lieu of taking the full federal Medicaid expansion. This entails added costs to state taxpayers because the federal government will not pay as large a share of the cost of Medicaid coverage. But it shouldn't markedly increase the share of the population that is uninsured, as in most states that reject the expansion.

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    Senate Democrats are playing the "hookers" card.

    Sen. David Vitter (R-La.) has been tying up the Senate this week as he pushes an amendment that would bar the federal government from making payments toward health insurance that members of Congress buy in the Obamacare exchanges. Vitter has been trying to attach the proposal to an unrelated bill on energy efficiency.

    Politico reports that Democrats have a response: If Vitter keeps pushing his amendment, they might advance one that strips the government contribution toward health benefits for any senator or congressman if the Ethics Committee has  "probable cause to determine" that he (or, I suppose, she) hired a prostitute.

    Vitter faced a scandal in 2007 when his phone number was found among the records of the so-called "D.C. Madam," Deborah Jeane Palfrey, who ran a high-end prostitution service. Vitter admitted that he committed a "very serious sin." He was never prosecuted.

    Vitter's amendment pertains to the interpretation of the Grassley Amendment to the Patient Protection and Affordable Care Act, which forces members of Congress and their staff to buy health insurance through the Obamacare exchanges rather than receiving health plans directly from their employer. Grassley offered this amendment as an exercise in political point-scoring and then Democrats unexpectedly agreed to incorporate it into the bill.

    The problem arising from the Grassley amendment is that it was unclear whether the government could continue to make a tax-free contribution toward the cost of congressional employee health benefits even if they were bought through the exchange. If such a contribution were disallowed, the Grassley Amendment would be tantamount to a large reduction in compensation for members of Congress and their staff. Earlier this year, the Office of Personnel Managment controversially ruled that such a contribution is legal.

    Democrats should be careful what they wish for with the hookers amendment. Like the Grassley Amendment, Republicans could end up agreeing to make it law, triggering a wave of Ethics Committee investigations of members of both parties, and adding one further silly wrinkle of complication to Obamacare.

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    David Vitter 2010

    Sen. David Vitter (R-La.) is calling for an ethics investigation of Senate Majority Leader Harry Reid (D-Nev.) and Sen. Barbara Boxer (D-Calif.), in response to Senate Democrats floating a bill that would block him from getting health benefits because of his prostitution scandal.

    In his call for an investigation, Vitter accuses Reid and Boxer, the chair of the Ethics Committee, of an attempt to influence his vote by "intimidation and bribery."

    The fight between Vitter and Senate Democrats has gotten nasty and personal over the past two days. Vitter is pushing an amendment that would prevent the federal government from making payments toward health insurance that members of Congress buy in the Obamacare exchanges. His amendment delayed a vote on a bipartisan, unrelated energy bill.

    In response, Politico reported that Democrats have floated an amendment of their own that is aimed squarely at Vitter if he keeps pushing for a vote on his amendment.

    It would deny lawmakers those government contributions if the Ethics Committee determines that there is "probable cause" they solicited prostitutes. That would resurrect the 2007 "D.C. Madam" scandal, the escort service of which Vitter was identified as a client. 

    A Senate aide passed along the key text of the amendment:

    (iv) LIMITATION. -- No employee contribution payable under section 8906 of title 5, United States Code, with respect to health insurance coverage under this subparagraph, may be provided on behalf of an individual who the relevant congressional ethics panel has probable cause to determine has engaged in the solicitation of prostitution.

    Vitter also takes aim at a third proposal that was floated by Democrats, according to Politico— one that would deny coverage to lawmakers who vote for the Vitter plan, even if it doesn’t become law.

    "Such an arrangement, whereby the Senate Majority Leader and the Chair of this Committee are threatening to take away their colleagues’ healthcare coverage subsidy if they do not vote a certain way, at worst constitutes bribery and a quid pro quo arrangement, and at best amounts to improper conduct reflecting discreditably on the Senate," Vitter said in his letter to the Ethics Committee.

    Vitter wrote that if Boxer has been involved in the plan to introduce the amendment, she should be removed from the Ethics Committee.

    Vitter's full letter is below:

    Re: Request for Investigation of Senator Harry Reid, Senator Barbara Boxer, and their respective staffs

    Dear Chairwoman Boxer and Vice Chairman Isakson:

    I respectfully request that the Senate Select Committee on Ethics investigate whether Senator Harry Reid, Senator Barbara Boxer, and their respective staffs violated the Committee’s Rules by proposing and circulating through the press legislation that ties Members’ personal healthcare benefits to their performance of specific acts and votes. This is attempted bribery, and the exact sort of behavior that the Senate Ethics Committee has previously condemned.

    News reports indicate that Senator Reid, Senator Boxer, and their staffs took the above concrete actions, thereby threatening their colleagues in the Senate with increased personal healthcare costs if they do not vote a certain way on a particular amendment proposed by me concerning the 2010 Affordable Care Act. As more fully explained below, Senator Reid’s and Senator Boxer’s offering of such a quid pro quo arrangement to their Senate colleagues is a violation of this Committee’s Rules and flies in the face of its enforcement policies articulated in previous ethics matters.

    Questions for Senators Reid and Boxer, and Their Staffs

    If Senators Reid and Boxer, and their staffs, assert that they have not been involved in this Democratic intimidation and payoff scheme, then they should be forced by your Committee to answer the following questions under threat of perjury:

    1) When did you become aware of the Democratic-lead plan to tie Senators’ personal healthcare benefits to their official actions? Have you, as Senate Majority Leader and Chair of the Senate Select Committee on Ethics, taken any actions to prevent this bribery scheme from being implemented?

    2) The news organization Politico has reported that this scheme was “drafted by staff in response to requests by several Democratic senators…it was discussed at a Senate Democratic lunch on Thursday.” Who are the Democratic staff members that drafted this legislation?

    3) Who specifically are the “several Democratic senators” who requested that this legislation be drafted?

    4) Did Senators Reid and Boxer attend the referenced Senate Democratic lunch where this legislation was discussed? If yes, were either or both of them a part of such discussion?

    5) Was ethics guidance requested from this Committee by the involved staffers and/or the several Democratic Senators who proposed this bribery scheme? If so, what guidance was provided?

    Request for Chair Boxer’s Recusal

    The Chair of the Ethics Committee is in a position of unique importance, and her integrity and credibility must be beyond reproach. Until sworn answers are provided to the above outlined questions that prove she was not in any way involved in the development of the outlined intimidation tactics, I respectfully request that Chair Boxer recuse herself from this matter. It is absurd on its face to think that the Committee can fairly and impartially address the potential ethics violations outlined herein when the Committee’s Chair and her staff appear to have orchestrated them in the first place, or at best were aware of them and did nothing to stop the violations, therefore becoming co-conspirators.

    This situation is especially egregious because news reports indicate that the Democratic scheme includes use of the Senate Ethics Committee process to intimidate senators and influence their official actions and votes.

    Upon proof or Senator Boxer’s complicity in this scheme, the minimum consequence for such behavior should be her removal from the Committee.

    Facts and Precedent

    In response to my proposal and call for a vote on my amendment to reverse the Office of Personnel Management’s Congressional exemption from the Affordable Care Act, Senator Reid and Boxer have apparently lead an effort to employ political scare tactics, personal attacks, and threats that would affect each Senator’s personal finances (i.e. bribery). News reports indicate that one of these proposals would prohibit the employer contribution to any “Member of Congress who has offered an amendment in the House of Representatives or the Senate that would prohibit such contributions on behalf of other individuals, or who has voted for the adoption of such an amendment.” Such an arrangement, whereby the Senate Majority Leader and the Chair of this Committee are threatening to take away their colleagues’ healthcare coverage subsidy if they do not vote a certain way, at worst constitutes bribery and a quid pro quo arrangement, and at best amounts to improper conduct reflecting discreditably on the Senate.

    Even if the proposed amendment is not actually introduced, the fact that such legislation has not only been drafted, but also released to the press, has already induced the intended intimidating effect. Politico described the scheme as “a hardball move” by the perpetrators, and the ethics violation has now occurred.

    The Senate Ethics Manual makes clear that personal financial penalties may not be used to induce Senators to take an official act. In addition, this Committee has been clear that Senators may not hold government officials captive by tying their personal finances or benefits to their official acts. As recently as 2012, this Committee explained:

    As stated in the Code of Ethics for Government Service, “public office is a public trust.” A government employee must not be influenced by extraneous factors when making decisions and “never accept for himself or his family, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of governmental duties.”

    In this case, Senator Reid’s and Senator Boxer’s tying Senators’ personal healthcare benefits to their official actions undermines these principles. If a senator voted for Senator Reid’s and Senator Boxer’s favored amendment, and against my amendment, it would appear that his or her decision was based on personal interests, and not the public interest.

    In addition, the federal bribery statute makes it a crime to “directly or indirectly, corruptly give, offer or promise anything of value to any public official … with intent … to influence any official act.” The phrase ‘anything of value’ in bribery and related statutes has consistently been given a broad meaning, to carry out the congressional purpose of punishing misuse of public office.” Just as Courts have recognized that the promise of higher-paying employment is a “thing of value” for purposes of the statute, the employer contribution that is being threatened to be withheld from Members who do not vote the way that Senators Reid and Boxer prefer is clearly also a “thing of value,” and therefore subjects the members and staff involved in this scheme to potential bribery prosecution.

    I request that the Committee immediately investigate Senator Reid’s and Senator Boxer’s attempt to induce official action by their Senate colleagues by threatening to take away their healthcare benefits if they do not vote for their proposal and against my amendment.

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    The U.S. Supreme Court has already affirmed that corporations have free speech rights, but a new challenge to Obamacare could also declare that non-human businesses have a right to religious freedom.

    America's highest court is expected to take up a fight soon over the hotly contested requirement in Obamacare that businesses pay for insurance that covers 100% of workers' birth control. Craft chain Hobby Lobby and at least 30 other for-profit companies with religious owners have filed lawsuits claiming the mandate violates their religious beliefs.

    It might seem odd that a business would get to exercise its religious beliefs. But this is America, and corporations often get to be people, too.

    In its bombshell Citizens United case of 2010, the high court found the Federal Elections Commission violated companies' right to engage in "political speech" by limiting the money they could spend promoting political candidates. That decision caused a lot of outrage but fell in line with a legal doctrine known as "corporate personhood" that says businesses have some of the same rights people do.

    For their part, Hobby Lobby and the other businesses fighting the contraception mandate say it violates the Religious Freedom Restoration Act. That act puts the kibosh on laws that put a big burden on people's religious beliefs — or the beliefs of businesses, depending on how the Supreme Court rules.

    The Supreme Court is expected to take up the new Obamacare fight because two appeals courts ruled in opposite ways on the birth control mandate issue. Philadelphia's federal appeals court ruled in July that "for-profit, secular corporations cannot engage in religious exercise." That court found there was a "total absence of caselaw" suggesting corporations had the right to religious freedom.

    In that case, a Mennonite family named the Hahns who owned a company called Conestoga Wood Specialties Corp. was fighting the contraception requirement. Here's what the court said:

    We accept that the Hahns sincerely believe that the termination of a fertilized embryo constitutes an "intrinsic evil and a sin against God to which they are held accountable" ...  and that it would be a sin to pay for or contribute to the use of contraceptives which may have such a result. We simply conclude that the law has long recognized the distinction between the owners of a corporation and the corporation itself.

    Hobby Lobby had better luck in the Denver federal appeals court, which ruled in June religious expression "can be communicated by individuals and for-profit corporations alike."

    "Would an incorporated kosher butcher really have no claim to challenge a regulation mandating non-kosher butchering practices?" that court asked.

    The U.S. Supreme Court is likely to agree with the Denver court. Justice Anthony Kennedy, the court's swing voter, wrote the 2010 Citizens United opinion saying corporations have a right to engage in political speech. The court is also thought to be very pro-business in general.

    The liberal minority, however, is likely to balk at one more extension of a "human right" to businesses. Now-retired Justice John Paul Stevens wrote an impassioned dissent belittling the idea of Constitutional rights for companies.

    Corporations "have no consciences, no beliefs, no feelings, no thoughts, no desires," Stevens wrote. "Corporations help structure and facilitate the activities of human beings, to be sure, and their 'personhood' often serves as a useful legal fiction. But they are not themselves members of 'We the People' by whom and for whom our Constitution was established."

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    Like an iceberg in the distance, private health insurance exchanges look small now—but could be huge very soon.

    With news that Time Warner and IBM are moving their retirees into private health exchanges—having them buy insurance from a menu of plans with company subsidies—those marketplaces are on track to explode with enrollments of retirees and active employees across the United States in coming years, experts say.

    "It's a fast growth path," said Rich Birhanzel, managing director of Accenture's health administration services division, which recently predicted that the number of people enrolled in private health exchanges will skyrocket from 1 million this year to as much as 40 million by 2018.

    If that prediction proves true, it would mean that nearly one-quarter of the estimated 170 million people now enrolled in company-sponsored health plans would end up in private exchanges by then—with room to grow.

    (Read moreCompanies sweating Obamacare tax—and acting on it)

    Accenture expects private health exchanges to have more people enrolled by 2018 than government-run, "Obamacare" public health exchanges, which after beginning operations next month are projected to reach about 31 million enrolled by 2018.

    It's a remarkable feat, especially when one considers how little is known about these private exchanges right now. Much of their growth is expected to come from current employees, a relatively untapped market. The majority of people now being funneled into private exchanges are retirees, as in the cases of Time Warner and IBM, not active employees.

    An 'immature market'

    "Private exchanges for active employees is still a very immature market," said Mike Thompson, a principal in PwC's health industries practice. But he noted recent research showing that about 40 percent of employers plan to consider private exchanges for active employees in coming years.

    Most companies now offer just one or two health insurance plans to workers, and subsidize employee enrollment with a set amount of money as a "defined benefit."

    In private exchanges, employees often have many more insurance companies offering many more plans at various prices, which they can pay for completely or partially with a lump-sum "defined contribution" from their employer. Selection and enrollment in plans is commonly done through websites operated by the exchanges, which can be run either by the employers or third-party operators. 

    (Read moreIn Obamacare, tech entrepreneur eyes new opportunity)

    Thompson said the potentially seismic move from traditional company health benefits to exchanges mirrors the move from company-funded pensions to 401(k) plans, in which employees choose their retirement investments, often with a company subsidy.

    "And we know how rapidly retirement plans have shifted from a defined benefit plan (a pension) to a defined contribution," he said.

    'In the dark'

    While the idea of private exchanges may be relatively straightforward, public awareness of it is low. Accenture's report noted that 83 percent of Americans are unfamiliar with private health exchanges.

    "Uhh, not really," said IBM retiree Don Parry, 80, when asked him if he knew how Extend Health's private exchange would work when he has to enroll there this fall because of IBM's decision. "Right now, I'm completely in the dark," said the Jacksonville, Fla.-area resident. "I don't know what the hell to think about it."

    Another IBM retiree, Allen Felstead, 75, said that although he recently received literature about the move to Extend Health's exchange from IBM, he still has many questions about how the switch will affect him and his wife, who live in Rochester, Minn.

    "You know how it is. You start reading it, but you don't have the slightest idea what they're talking about," said Felstead.

    Despite his and Parry's uncertainty, two factors are spurring the move toward private exchanges.

    One is the opportunity for companies to save money by outsourcing the administration of health benefits to the exchanges, and from price competition among insurance providers offering plans on the exchanges.

    Extend Health, the Towers Watson private exchange that now will be handling Medicare plan options for 110,000 IBM retirees, estimates it can save clients "3 to 10 percent per year" in costs, said Bryce Williams, who leads Extend Health.

    (Read moreRed states could beat blues in Obamacare exchange enrollment)

    Extend Health currently has about 300 companies as clients, the "vast majority" of whom enroll only retirees, Williams said. But, he noted, "three major companies are going to join our exchange this fall," bringing about 50,000 of their active employees into the exchange.

    The other factor generating increased interest in exchanges is that "increasingly consumers are more prepared, more expectant of having choice and retail-like experience when they're buying health insurance," said Birhanzel of Accenture. "The theory is that people, over time, are going to choose benefits that best suit them."

    He and other experts noted the tendency of many people to "buy down" on the exchanges—opting for plans with lower premiums, and thus saving money on their short-term health costs by accepting higher deductibles and smaller health-care networks.

    That tendency means that in some cases, the employees' costs for coverage remain unchanged or less than before, even if an employer is offering less of a subsidy for the exchange plans than it had offered under the traditional company plan.

    "It is a win-win most of the time," said Alan Cohen, co-founder of Liazon, operator of Bright Choices Exchange, a private exchange which offers plans to active employees of more than 2,300 companies.

    Cohen said people in the future will "laugh" when they recall a time that their companies picked a single insurance plan to cover the health needs of them and thousands of their co-workers, without giving them any choice. "The last bastion of what you can't buy online is health insurance," Cohen said. "That will fall, just like everything else did."

    Cohen predicted that in the next six months, "you'll see lots and lots" more companies signing up for private exchanges, including Fortune 1000 companies.

    "I really think that within five years, the vast majority, I think 70 to 90 percent of companies, will be using exchanges for their active population and their retired population, and it will be the normal course of business," said Cohen.

    By CNBC's Dan Mangan. Follow him on Twitter @_DanMangan.

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    florida, retirement, 1970s

    The biggest effect of Obamacare is obvious: Starting this winter, it will make it easier for tens of millions of Americans without health insurance to get it.

    But Obamacare will also lead to big changes for workers who do have health insurance and for the firms that employ them.

    Workers will find it easier to change jobs, and to enter and leave the labor force at will, without worrying that doing so will cause them to lose access to health insurance.

    In other words, Obamacare will tilt power in the labor market away from employers and toward employees.

    This is a big deal, and it's a sleeper issue that animates the left-right fight over Obamacare even though it is rarely discussed in the open. Conservatives concerned that we are turning into a nation of "takers" see employer-provided health care as one of the few remaining forces that keeps Americans working. Liberals don't just want health coverage for all; they want workers to be able to press their employers for higher wages and better conditions, which they can more easily do if they're less afraid of losing health insurance if they lose their jobs.

    That change in the balance of power will affect the economy in a few ways, some good and some bad, but the effects look likely to be more favorable to workers than employers.

    1. Obamacare might lead to fewer people working. As the Congressional Budget Office noted in a report months before Obamacare passed, "Increasing the availability of health insurance that is not related to employment could lead more people to retire before age 65 or choose not to work at younger ages."

    There's been a lot of discussion of the effects on the employer side under Obamacare. Will businesses decline to hire so they can remain eligible for favorable rules under Obamacare for small businesses? Will they shift workers to part time to avoid coverage mandates? Will small business owners facing tax increases due to Obamacare be less inclined to invest?

    But these effects on the employee side are also important: Workers who aren't dependent on a job for access to health insurance should be less inclined to take job offers, more willing to quit, and more likely to demand higher wages.

    2. Freed from the search for health insurance, people might do better and more productive work. Economists call the current phenomenon "job lock": People decline to take more appropriate job opportunities or start their own businesses because they do not wish to lose their current health coverage.

    It's unclear how important this effect is: Some studies find that workers without alternative access to health coverage are much less likely to change jobs, while others find no effect. (Brigitte Madrian's 2006 paper provides a good overview.)

    Here is a key observation for understanding the debate over Obamacare: Point (1) describes a way the law might hurt the economy, and (2) describes a way in which it might help. But both (1) and (2) are bad for employers, and will force them to work harder to attract and retain workers. That helps explain why employer complaints about Obamacare don't necessarily mean that it is bad for the overall economy.

    3. Early retirement may become more prevalent. Some employers that currently provide health coverage to retirees under age 65 are talking about dropping that coverage. These include large private firms like Time Warner and IBM, and governments such as Chicago, Detroit, and Rhode Island. Obamacare's exchanges and subsidies will make it suddenly much easier for retirees under 65 to get their own coverage, making it less economical for employers to provide it.

    But most workers currently do not have access to pre-Medicare retiree health benefits through work. Only about 20% of private-sector employees currently have access to such benefits; in the public sector, the figure is likely about two-thirds. For the majority without such generous employers, Obamacare will be a boon, making it easier to retire before Medicare age, or to shift into a different kind of work that doesn't come with health insurance.

    The question is how many will do so. In 2008, the CBO analyzed a proposal to let people aged 62 to 64 buy Medicare coverage at full price, and they thought the effects would be tiny: just 20,000 added retirements out of a population around 10 million. But Obamacare's offering to young retirees is much more generous: Prices would be lower, because Obamacare's premium structures favor older people, and many retirees would be eligible for subsidies that further cut the price they pay.

    Even if retirement behavior doesn't change that much, the change in who pays for health care will matter a lot to taxpayers. State and local governments have over a trillion dollars in accrued and unfunded liabilities for retiree health care. Unlike pension benefits, they usually are not guaranteed, so elected officials can change their terms at will. Cities like Chicago are realizing that Obamacare provides an opportunity to offload much or all of those liabilities onto the federal government.

    4. Work and health care will be severed. Uncertainty about future employer and employee behavior is a source of uncertainty in the overall cost estimates for Obamacare. If more employers than expected drop insurance coverage and send employees to buy subsidized coverage in the exchanges, the law's costs will rise. If union-sponsored Taft-Hartley multi-employer plans lose their rationale, and many of their 20 million participants shift to buying subsidized plans though exchanges, the law's costs will rise. If easier availability of health insurance outside work further reduces labor force participation, the law's costs will rise.

    One of the key problems with Obamacare's design is that it tries to simultaneously get health insurance to lots of people who don't have it while discouraging employers from dropping the (very expensive) plans they currently offer. Once we have separated the availability of health insurance from employment, it is likely to prove untenable to expect employers to keep offering it. That shift will be a mixed bag for employers: They'll be relieved of rising health insurance costs, but they'll have to pay added taxes and they'll lose power over their employees. But for workers, the added freedom should be mostly positive.

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    ted cruz sarah palin

    For the last few weeks, House Speaker John Boehner has been trying to find a way to convince his caucus to vote for a bill that keeps the government open after Sept. 30 without picking a fight over Obamacare. But a minority of his caucus has been insisting on defunding Obamacare, egged on by outside conservative groups and a handful of far-right Republican Senators, most importantly Ted Cruz (Texas).

    This has been pretty annoying for a lot of House Republican members and staff. Jonathan Strong and Andrew Stiles of National Review got an anecdote out of a closed Republican Study Committee meeting yesterday:

    Max Pappas, an aide to Texas senator Ted Cruz who was on hand, rose to argue that in the event the House and President Obama were at odds when government funding expired, Republicans could pass a bill to fund the troops and other core priorities. At that point, a woman rose, identifying herself as a staffer to a Texas Republican. Pappas, she said, was “not dealing in reality” and making everyone else’s life difficult. The staffer, whom two GOP sources identified as working for Representative John Culberson of Texas, went on to decry Cruz for holding events in Culberson’s district and telling his constituents that defunding Obamacare would be “easy.”

    This is a key aspect of the Cruz-driven defund Obamacare push. Within the Senate, Cruz is essentially irrelevant. Any budget deal that comes out of there will be struck between majority Democrats and a number of more practical-minded Republicans, like Sen. John McCain (Ariz.).

    The only way he can exercise power is as an interloper in House Republican business — and his presence there is not wholeheartedly welcomed.

    One senior House Republican aide complained to Business Insider that Cruz wasn't coordinating with House Republicans even as he tried to drive the legislation that would come out of the House, and that he didn't seem to have an endgame beyond President Obama sitting in the Rose Garden and signing a bill to undo his key legislative accomplishment.

    And it's not like Cruz has most House Republicans on his side. If you believe the press accounts, there are 30 or 40 House Republicans who won't vote for a continuing resolution that funds Obamacare. With 30 defections, Speaker John Boehner can't get what he desperately wants: 217 Republican votes for a bill that protects his key spending priority (maintaining low spending levels from sequestration) while avoiding a fight over Obamacare.

    But if 30 to 40 House Republicans won't vote for a CR that funds Obamacare, that means 190 to 200 of them would vote for such a CR. People talk about the "radicalized House GOP" but on this particular issue, most House Republicans aren't radicalized. They've been dragged into this fight, unwillingly, by Cruz. And that's why they're so irritated.

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    Obama smile laugh

    Here's a feature of Obamacare you probably don't know about: A transfer of hundreds of billions of dollars in liabilities to retired public employees from state and local governments to federal taxpayers.

    Here's how it's going to work.

    States and localities have enormous liabilities in the form of health benefits they have promised to provide to retired workers. (Finance professionals call these benefits OPEB, or "other post-employment benefits.") Most public sector retirees get health plans until they turn 65, and then supplemental coverage on top of Medicare after that.

    In most cases, state and local governments haven't prefunded these liabilities at all. As Americans age and health care costs rise, this is becoming a major drain on state and local finances, arguably more important than more-widely-discussed problems with public employee pensions.

    But Obamacare will give states and cities a major out. Instead of providing health care to under-65 retirees, they can tell them to go buy health plans in the Obamacare exchanges. In many cases, those retirees will qualify for substantial subsidies to buy such plans. States and localities will often stand to save thousands of dollars per retiree per year, even if they provide a cash stipend to help each employee buy insurance in the exchange.

    All told, state and local governments should be able to shift hundreds of billions of dollars in OPEB liabilities to the federal government. That will mean major savings for those governments. But it will also drive costs upward at the federal level.

    Stressed local governments already making the shift

    Detroit, as part of its bankruptcy plan, wants to stop providing health care to retirees and instead give them each a $125 monthly stipend to buy insurance in the exchange. Currently, Detroit spends $721 per month per retiree on health benefits, so this move will allow Detroit to cut its OPEB liability by 80%.

    But it won't just be bankrupt cities like Detroit making the move. Chicago and Rhode Island— governments facing tight fiscal situations but not on the brink of bankruptcy — are considering similar shifts.

    Unlike pensions, retiree health benefits are usually not legally guaranteed. Stressed cities and states will see kicking OPEB costs up to the federal government as a politically appealing option because of that legal flexibility.

    Even in places where finances are flush, the shift will be tempting. Public employee unions that work together with state and local governments to switch to federal coverage will be playing a positive sum game: Existing benefits can be replaced with a combination of Obamacare coverage and cash that leaves retirees with more income and local governments with lower costs. Only federal taxpayers will get left holding the bag.

    The numbers are big

    Surprisingly, we don't know the total amount of state and local OPEB liabilities. My best back-of-the-envelope guess is that they are about $2 trillion. For comparison, total outstanding state and local bond debt is $3 trillion.

    In 2012, the Pew Center on the States calculated that stateshave accrued $627 billion in unfunded OPEB. But most OPEB liabilities are at the local level, since most public employees work for local governments. There's no way to determine the total amount of local liabilities without examining financial statements on a county-by-county and town-by-town basis. Federal agencies like the Census Bureau and the Bureau of Economic Analysis don't do that for retiree health benefits.

    The Empire Center for New York State Policy did a fairly comprehensive review in New York State last year, looking at the reported liabilities of the state's 89 largest local government employers and imputing liabilities for other, smaller governments. They estimated $177 billion in local liabilities, 2.5 times the $73 billion in liabilities accrued by the state government.

    Applying a similar ratio nationally would imply just over $2 trillion in total OPEB liabilities. A 2007 research note from Credit Suisse put the figure at $1.5 trillion, but liabilities have grown significantly over the last six years.

    How many of those liabilities can be shifted?

    A substantial fraction. Consider the below example.

    A retired public employee in New York City, age 60, is married to another 60-year-old, with $50,000 a year in retirement income. New York City's most common health plans would have cost about $12,500 per year for that couple in 2012, paid entirely by the city of New York. Given the current pace of medical inflation, such a plan will likely cost about $14,000 in 2014.

    The default Obamacare exchange plan for that couple will be substantially cheaper — about $9,360, according to the Kaiser Family Foundation. But it gets better: The federal government will provide a subsidy of $4,610 to help that retired couple buy a health plan. Instead of $14,000, that retired couple can get exchange coverage at a cost of just $4,750 after federal subsidies.

    Instead of directly providing a health plan, New York City could just give that couple cash to buy such a plan. Even if it adds $1,000 to cover added income taxes and $3,000 to compensate for the plan's reduced generosity, New York City will still come out ahead by about $5,000 a year, cutting the cost of insuring this retiree by more than a third.

    What costs won't get shifted to the federal government?

    States and cities won't be able to offload their entire OPEB liabilities, even if they move under-65 retirees into the Obamacare exchanges. Here are a few components that they'll still have to pay for:

    • Benefits for retirees over 65. Many state and local governments provide supplemental coverage on top of Medicare, including assistance with premiums for Medicare Parts B and D. These costs won't be greatly affected by Obamacare, though the enhancement of prescription drug benefits in Medicare Part D may reduce the cost of supplemental coverage that states and cities provide.
    • Dental, vision, and life insurance benefits. While OPEB liabilities consist mostly of medical benefit promises, they include any non-pension benefits that were promised to retirees. Non-medical benefits won't be affected.
    • Retiree contributions toward health premiums. As in the New York City example above, simply telling retirees "go buy in exchanges" would mean a marked reduction in their real income in retirement, because the retiree would be on the hook for several thousand dollars a year in premium contributions. Unless they're insolvent or close to insolvent, cities will generally feel pressed to make up this gap with cash payments that will eat up much of the savings from dropping retiree health plans — but not all of them.
    • Retirees who aren't eligible for premium subsidies. If you make more than 400% of the federal poverty line (about $62,000 for a family of two) you aren't eligible for health plan premium subsidies under Obamacare. The cost of making these retirees whole might be so high that it eats up all the savings from switching to federal coverage.

    What to do with the "windfall"

    As some states and localities start switching retirees to federal coverage, the temptation is likely to spread. It's similar to the Medicaid expansion: Holdout states will have increasing difficulty justifying why they're not taking federal dollars that their neighbors are getting.

    The question for cities and states will then be what to do with all the money they're saving. In Detroit, the answer is simple: The city doesn't have any money anyway. But in solvent jurisdictions, the temptation will be find new ways to spend money that lawmakers had been expecting to spend on retiree health care.

    In general, the first choice should be to cut taxes. After all, new federal health benefits for retirees won't be free. They'll be an added in unexpected cost to the federal government, which will have to collect taxes over time to pay for them.

    But very often, I expect that state and local officials will find other ways to spend the money. 

    Bill de Blasio, New York's Democratic nominee for mayor, wants a new pre-Kindergarten program that he estimates will cost $350 million a year. He wants to pay for it with a high-income tax increase that state lawmakers aren't likely to approve. His Republican opponent, Joe Lhota, says he also favors universal pre-K but wants to find a different funding mechanism.

    Meanwhile, in the next mayor's first year in office, New York City will spend $2.3 billion on health benefits for retirees. Cutting a deal with unions to shift many of those costs up to the federal government would produce enough savings to pay for universal pre-K, and then some. Watch for the next mayor to do so, whomever it is.

    SEE ALSO: Inside The GOP Civil War That Could Turn Into A Debt Ceiling Or Government Shutdown Disaster

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    Having tried and failed to sell restive conservatives on plans to keep the government open without picking a fight over Obamacare, it appears that House Majority Leader Eric Cantor is moving on to Plan C: Giving in to people like Sen. Ted Cruz (R-Tex.) who are insisting that any bill to keep the government open after Sept. 30 must defund Obamacare.

    National Review's Robert Costa tweets:

    I guess the idea is that House Republicans will open with a demand of defunding Obamacare and see if Senate Democrats agree to go along. (Spoiler alert: They won't.) The question is how long Republicans have to leave this demand out there until they've officially determined the strategy isn't going to work.

    Is John Boehner committing to a government shutdown now? If he caves and cuts a deal with Nancy Pelosi before Sept. 30 to keep the government open without defunding Obamacare, won't conservatives insist that he didn't try hard enough to force Democrats' hand? (Spoiler alert: They will.)

    How can Boehner convince conservatives that he really, really tried to defund Obamacare if he doesn't let the government get shut down, at least for a few days?

    Brian Beutler, who wrote this morning that a disastrous government shutdown might be the only way to "break the fever" in the GOP caucus, is looking prescient.

    SEE ALSO: Dem. Senate aide says the plan is dead on arrival

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    Ted Cruz

    A top Senate Democratic aide immediately shot down the new Republican-led House's strategy to bring a government-funding bill to the floor that defunds the Affordable Care Act.

    "I would say that there is a reason House Republican leaders didn’t do this in the first place, which is that there’s no chance in hell it passes the Senate," the Senate aide said in an email.

    "It’s just a waste of time. The House will eventually have to pass a clean CR or Republicans will shut down the government."

    Republicans' new strategy, according to National Review's Robert Costa, is bending to the wishes of conservatives like Sen. Ted Cruz (R-Texas), who are insisting that any bill to keep the government funded must also defund Obamacare. 

    With only four working days left before Sept. 30, it seems likely that if they adopt this new plan, Republicans would be willing to shut down the government. It's possible that Congress could cancel its planned recess, but there are also only 13 days left before the end of the month. 

    Costa adds a crucial disclaimer to his report: It is very unlikely that the Senate passes anything that defunds Obamacare, and "many House Republican insiders say a 'Plan B' may be needed." So it's up to Cruz to turn what has been a conservative movement thus far into broad pressure on the Senate. 

    SEE ALSO: Inside The GOP Civil War That Could Turn Into A Debt Ceiling Or Government Shutdown Disaster

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    WalgreensNEW YORK (Reuters) - Walgreen Co is moving 120,000 employees to a private health insurance exchange from coverage provided directly from carriers, the company will announce Friday.

    The pharmacy chain will join 17 other large employers on the Aon Hewitt Corporate Health Exchange as part of a growing movement to offer employees cash to purchase their own plans on such exchanges.

    The end-cost to employees depends on the plan chosen, but they typically get more options than under traditional arrangements. Private exchanges mimic the coverage mandated as part of the Affordable Care Act. Enrollment in the public exchanges starts October 1.

    "What happens to employer contributions over time? Will they put in as much as they put in the past? These are unanswered questions but potential negatives," says Paul Fronstin, a senior research associate with the Employee Benefit Research Institute. The benefit to Walgreen and other employers is unknown at this point, as their cost-savings are not clear.

    Of the 180,000 Walgreen employees eligible for healthcare insurance, 120,000 opted for coverage for themselves and 40,000 family members. Another 60,000 employees, many of them working part-time, were not eligible for health insurance.

    Aon Hewitt says other participants in its program include retailer Sears Holding Corp and Darden Restaurants Inc. These new additions raise enrollment to 330,000 from 100,000 last year, and Aon Hewitt estimates enrollment will jump to 600,000 next year, a fivefold increase from 2012.

    By 2017, nearly 20 percent of employees nationwide could get their health insurance through a private exchange, according to Accenture Research. A recent report by the National Business Group on Health said that 30 percent of large employers are considering moving active employees to exchanges by 2015.

    Other major providers of private exchanges include Mercer, a division of Marsh & McLennan Companies Inc, and Towers Watson & Co. Mercer said this summer that it had five major employers enrolled but did not name them. Towers Watson is in the process of launching an exchange. Smaller companies, like Buck Consultants, Willis North America Inc and regional players, are also starting exchanges.

    There are also separate exchanges just for retirees. IBM, Time Warner Inc and General Electric Co recently announced they were moving retirees to exchanges for those not yet Medicare-eligible and other exchanges for those who are.


    The five plan choices in Aon Hewitt's private exchange carry names used across the sector - bronze, bronze plus, silver, gold and platinum - and costs are based on the amount of coverage, says Ken Sperling, Aon Hewitt's national health exchange strategy leader.

    Bronze and silver plans typically have high individual deductibles - $1,250 or more - meaning that they do not kick in until a participant's out-of-pockets costs exceed the amount of the deductible. Gold and platinum plans have lower deductibles and offer more coverage.

    Healthcare premiums for these plans rose about 5 percent last year, consistent with the industry average recently calculated by the National Business Group on Health.

    For some employees the exchanges could offer more choice. Walgreen's employees eligible for healthcare coverage were asked in the past three years to choose between two plans, both with high deductibles. Those plans were managed by Blue Cross Blue Shield or United Healthcare, depending on the area of the country.

    Walgreen's offering last year matched the silver plan on Aon's exchange, so there are two options that are less expensive and two that are more expensive.

    Based on Aon Hewitt's data collected so far, about 42 percent of participants choose a plan less expensive than they had previously used, while 26 percent choose a higher-cost plan and 32 percent stay at the same level.

    Tom Sondergeld, senior director of health and well being for Walgreen, said Walgreen joined a private health exchange to offer its employees more choice, while still supporting a generous pharmacy benefit he said was central to the company's mission.

    Walgreen is not planning any other major benefit changes for 2014, which starts in late October, Sondergeld said. The company will continue its reward-based wellness programs and a smoking surcharge of roughly $600. It will not change coverage for spouses, as UPS recently announced.

    (Follow us @ReutersMoney or at Editing by Lauren Young and Prudence Crowther)

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    reporters running after obamacare

    The individual mandate was unprecedented.

    Never before had Congress compelled individuals who chose to do nothing to buy a product. The legislative process to enact Obamacare was unprecedented.

    Never before had such a monumental and transformational law been enacted so quickly with no support from the minority party.

    All previous landmark legislation was passed with strong bipartisan support. The groups that opposed the law and rallied around the Constitution were unprecedented. Never before had constitutional social movements emerged and gained steam so quickly.

    Though many of the most prominent social movements in our nation’s history — such as movements for the abolition of slavery, for women’s right to vote, and for civil rights — used the Constitution as their rallying cry, never before had a group like the Tea Party emerged spontaneously, and immediately obtained such prominence.

    The legal challenge to Obamacare was unprecedented. Never before had a constitutional argument flourished and developed so quickly, gaining acceptance by courts in a matter of months rather than years (with the possible exception of Bush v. Gore, which materialized in 36 days).

    Even during the constitutional challenges to the New Deal, challengers applied long-standing doctrines about the scope of federal power.

    The 26-state union that opposed this law was unprecedented. Never before had a majority of the states in our Union fought so vigorously against an act of Congress. The political tensions created between the president, the Congress, and the courts were unprecedented. Never before had all three branches of our government clashed so quickly and decisively in a constitutional challenge.

    Even President Roosevelt’s aborted courtpacking scheme came together over a number of years, following several resounding defeats at the Supreme Court. Here the campaign was waged before the justices had even decided the case.

    Finally, the Supreme Court’s opinion in this case was unprecedented in that it deftly upheld a law never enacted, but did so in such a way as to render it largely ineffective. Under NFIB, the mandate can never impose a penalty high enough to create incentives to purchase health insurance.

    This case was in every sense unprecedented.

    From these unprecedented events, we can draw several lessons.

    Don’t pass landmark laws on party-line votes. Don’t doubt popular movements that seek the Constitution as a higher power. Don’t doubt legal scholars who advance plausible constitutional arguments. None of these strategies proved effective.

    The final lesson is less clear. Though the administration’s effort to politicize the courts worked in the short term, I fear what this may do to the Supreme Court in the long run. Attempts by the political branches to intimidate the Court are nearly as dangerous as the Court disrespecting its role among the political branches.

    As Justice Thomas said in February 2011, in response to calls for his recusal, “You all are going to be, unfortunately, the recipients of the fallout from [this politicization of the judiciary]. There’s going to be a day when you need these institutions to be credible and to be fully functioning to protect your liberties.”

    When that day comes, Thomas implied, those institutions won’t be there. The leak of the chief justice’s decision to change his vote, followed by the battle to sway him back, underscores how precarious this credibility is.

    For now, I hope that the constitutional clash from 2009 to 2012 remains unprecedented and is never repeated.

    From "UNPRECEDENTED: The Constitutional Challenge To Obamacare" By Josh Blackman. Copyright © 2013 by Josh Blackman. Reprinted with the permission of PublicAffairs, a division of the Perseus Books Group.


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    Michael J. DowlingThe way health care is provided, paid for, and measured in the United States is rapidly changing. That will continue to happen as the Affordable Care Act, also known as Obamacare, comes into full effect.

    Few people know that better than Michael Dowling, the CEO of North Shore-LIJ, the third-largest non-profit secular health system in the United States by number of bedsand the third-largest private employer in the New York City area.  

    While the country is scrambling to react to Obamacare, Dowling's organization had a head start. One of the most notable results of the passage of the law has been massive and growing consolidation of health-care providers and insurers into big, diversified groups, emulating something NSLIJ started in the 1990s. 

    What's more, NSLIJ is taking it a step further, as one of the biggest health-care organizations to become an insurer as well, becoming a one-stop shop for patient needs.  

    We spoke to Dowling, a native of Ireland who previously worked as a social policy professor and insurance executive, about how NSLIJ is building a health-care system for the future.  

    Our conversation has been edited for length and clarity.

    Business Insider: What's it like leading a health-care giant during the largest health-care overhaul in America’s history?

    Michael Dowling: It’s a privilege to be the leader of a large organization at a time like this. Despite what other people will tell you, I think this is a great time to be in health care because it’s all about transformation. It’s basically trying to forget about a lot of the things that we were taught 15, 20 years ago. Because I think we're heading into a different world, and you have to map a course through that.

    If you're somebody who is resistant to change, I think this could be an awful position to be in. But if you're somebody who welcomes change and tries to create change, then I think it’s a great place to be — so I'm excited about it.

    BI: How have you changed the way you work as Obamacare gets implemented?

    MD: We started to change a lot 10 to 15 years ago. We were the first organization to create a very large, integrated health system. The concept behind 'accountable care,' as we now talk about it, is how you bring multiple parts of health care together, combine units of service and combine entities. Well, we started to do this back in the mid ’90s.

    We didn't say, 'Oh my God, the Affordable Care Act just passed; now what do we do?' We've been preparing for a lot of this stuff for a long time. Like the move towards transparency — we're big fans of this. We actually put a lot of our stuff on the website years ago, before anybody suggested that we should do it. We also engaged in pay-for-performance contracts for many, many years — way before anybody said that we should do it.

    BI: You employ more then 46,000 people. How do you manage them all successfully?

    MD: We have central administration, single clinical leadership, single metrics across all parts of our entity. We've consolidated all the back office functions like finance, government relations, purchasing, legal, real estate, marketing — all of those things that, in most organizations, sit within each individual component of an organization. None of it works perfectly, but compared to most organizations, we've made dramatic changes that other people are now just beginning to think about.

    For example, we have single clinical service leaders across all of our organizations. The head of medicine oversees medicine everywhere, and the head of pediatric oversees pediatrics everywhere, irrespective of the location. That's not uncommon in non-health-care businesses, but in health care, it’s a rarity. 

    BI: What's the role of data in your organization?

    MD: You'll always be chasing better data. You'll always be trying to figure out how to better use data. The caution I would give is that more data is not necessarily the most important thing. It’s having the right kind of data. You can get swamped with data that doesn’t tell you anything. You have got to be able to turn it into information that you can use for implementation and practice purposes.

    Traditionally, in health care, we've worked as if the hospital is the center of the universe. As time goes by, the hospital is going to be important, but it’s not going to be the center of the universe. It'll be about quality of care across the full continuum. It'll be much more about what happens in the home, what happens in outpatient ambulatory care, as well as what happens in the hospital.

    BI: So how do things have to change?

    MD: Most of the metrics and most of the policies that have been promulgated by government over the past couple of decades have always been about what happens when somebody becomes a patient. The future, in my view, is in how you transition yourself from a hospital-centric system to a system that provides care in the most appropriate environment.

    The second thing is how you go from being a system that primarily treats illness to one that is also in the health promotion business. We don’t want to just be taking care of people after they get sick. We've got to be figuring out how to deal with people before they get sick. That’s one of the reasons, incidentally, that we decided to move forward and get an insurance license so that we can incentivize the practitioners themselves to do the right thing, in the right location, at the right time, and the right place, and not wait until somebody gets sick.

    BI: Why the decision to become an insurer?

    MD: These days, everybody’s talking about how we need to get away from fee-for-service [where the patient pays for each medical service individually, a system that encourages health-care providers to layer on excess services]. If you're a critic of fee-for-service, which I am to an extent, it means that the incentives are not always aligned, that you should move to another form of getting reimbursed.

    If you decide that you want to take on risk arrangements and take on responsibility for the quality and cost of care for a population, you have to build an infrastructure to figure it out. You've got to have competencies that don’t automatically exist in a traditional health-care organization. My idea was, if you're going to build all of those competencies, you're essentially building what exists in many insurance companies. So why not get an insurance license?

    BI: You have the largest corporate university of any health-care system. What role does it play?

    MD: The only way that you can ever improve and ensure some degree of success going forward is if you have your employees well trained. You've got to hire the right people, train the right people, promote the right people, and provide opportunities for ongoing learning.

    So we decided that we wanted to build an in-house corporate university. I modeled it after what existed at GE, IBM, Motorola, and the Ritz-Carlton. In fact, we worked with GE directly for almost two years when we were establishing our program here. We call our program the Center for Learning and Innovation.

    We started that in 2001, and it has dramatically grown. We have one of the largest simulation training centers in the United States. That allows us to replicate almost anything that goes on within this organization and replicate a simulation so people can practice before they have to do it on real people. This has proven to be enormously successful. In fact, last week I had about 25 CEOs from Sweden here taking a look at our simulation center.

    BI: How do you make sure you hire the best people?

    MD: All of our hiring is centralized, and we train hundreds of people in behavioral interviewing. We look for people who have the right kind of commitment and passion, with a lot of integrity. You know the old phrase: You hire for the attitude, and you teach skill. Give me the people with the right attitude and the right passion and the right dedication, who understand the nature of health care and the legal responsibility that exists here. You focus your recruitment on that.

    BI: You don't come from a hospital background. How has that affected your approach?

    MD: Well, I've had the fortunate experience of being a laborer, working on the docks, working in construction. All of these were educational opportunities. Then I went into academia. I spent a lot of time at Fordham University in a leadership position and a faculty position. I was in government for 12 years, and then it was insurance.

    I know that in government, they pass regulations that often don’t work. I'm willing to challenge those things. Since I was on the other side of it, I'm not scared to challenge what government does. Having a broad level of experience gives you an open mind — the freedom to entertain new ideas, the freedom to look at things differently. You're not constrained by tradition. Health care can be very tradition-bound. 

    For the people who run our hospitals, I like to hire people who have never run one before, because I don’t want to hire somebody who is thinking about a hospital of 10, 15, or 20 years ago. I want people thinking about the hospital of the future.

    BI: How would you describe your approach to leadership? How did it develop?

    MD: In any organization — especially in health care — you're dealing with multiple constituencies, so you're dealing with the issue of constituency politics. We have doctors, and we need the doctor community. You have nurses, you have union and non-union. You have the administrative staff.

    The key is figuring out how to influence behavior and being very, very clear about where it is you want to get to. Leadership is about promoting change and about influencing behavior, but you've got to understand the politics of it. Leadership is not about having a title. If I sit around and say, “I need this done because I'm the CEO,” nobody cares. I mean, they will listen to you for a while, but once you turn your back, you know they've gone the other direction.

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    Hobby Lobby David GreenEditor's note: This statement from Hobby Lobby's CEO David Green has been reprinted with his company's permission.

    Crafts chain Hobby Lobby is one of the main opponents of Obamacare's mandate that employers provide insurance that covers birth control. That fight is expected to reach the Supreme Court.

    My name is David Green, and I am the founder and CEO of Hobby Lobby Stores, Inc. In case you are not familiar with our company, we are a national arts and crafts retailer with more than 500 stores in 41 states. We are headquartered in Oklahoma and employ more than 22,500 individuals nationwide.

    I started Hobby Lobby as a miniature picture frame company, called Greco Products, in 1970. My family and I made miniature picture frames and sold them to various retailers. Because there was a high demand for this product at the time, we were able to take out a loan of $600 from the bank to open our first retail store, which consisted of 300 square feet of manufacturing space in the back, and 300 square feet of retail space in the front. That store became the first ever Hobby Lobby.

    My family has been an integral part of this business since day one, and remains an important part of it today. My son, Steve Green, is president of Hobby Lobby. My son, Mart Green, is president of Mardel, which is a Christian bookstore that is an affiliated business with Hobby Lobby. My daughter Darsee Lett is a vice president of Hobby Lobby. Several of my grandchildren also work in our business.

    Another integral part of Hobby Lobby from day one has been our faith. My parents were both pastors, and all of my siblings are involved in ministry. I felt like somewhat of an outsider going into retail, but I’ve found a way to minister through Hobby Lobby. We have always operated our company in a manner consistent with Biblical principles, including integrity and service to others. We believe wholeheartedly that it is by God’s grace and provision that Hobby Lobby has been successful. Therefore, we seek to honor him in all that we do.

    As part of that faith, we care greatly for our employees and their families. That’s why, unlike most major retailers, we are only open 66 hours per week and are closed on Sundays to allow our employees to spend time with their families. For the past four years in a row, we have increased the minimum wage for our full-time employees, and it’s now 80 percent above the national minimum wage.

    We also believe in sharing our faith, which is why we purchase full-page ads at Christmas and Easter in newspapers in all the major cities where we operate. We also contribute both time and funds to numerous Christian organizations across the nation and the world. Hobby Lobby has always been a tool for the Lord’s work. For me and my family, charity equals ministry, which equals the Gospel of Jesus Christ.

    We know that we have been blessed by God’s grace, and we believe it is because we have chosen to live our lives and to operate our business according to His word, and we are very grateful for that.

    But now our faith is being challenged by the federal government. The Health and Human Services “preventative services” mandate forces businesses to provide the “morning-after” and the “week-after” pills in our health insurance plans. These abortion-causing drugs go against our faith, and our family is now being forced to choose between following the laws of the land that we love or maintaining the religious beliefs that have made our business successful and have supported our family and thousands of our employees and their families. We simply cannot abandon our religious beliefs to comply with this mandate.

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    generation opportunity screenshot

    What is Obamacare like? According to one conservative group, it's like letting Uncle Sam give you a prostate exam or a pelvic exam.

    No, really. Here are new videos (via Chris Moody) from Generation Opportunity, a 501(c)4 group promoting conservative economic messages to young people, which wants you to "opt out" of health insurance:

    According to the New York Times, Generation Opportunity is funded by the Koch brothers.

    SEE ALSO: Ted Cruz Is Making Life Miserable For House Republicans

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    warren buffett

    Coming out of a meeting to lay out their new strategy to defund Obamacare as a condition for government-funding and debt-ceiling bills, Republicans said they had the momentum.

    What is the Republican evidence for their newfound momentum? Rep. Jim Jordan (R-Ohio), a former chair of the Republican Study Committee, explained:

    “All the momentum is in our direction. Warren Buffett said yesterday, ‘Scrap the bill.’ The AFL-CIO said last week, ‘Repeal the bill if you’re not going to fix it.’ Everyone knows this thing isn’t ready. Everyone knows."

    Here's the problem with that evidence: Warren Buffett did not say that, and definitely not yesterday. And though certain unions within the AFL-CIO have well-documented problems with Obamacare, that sweeping statement misrepresents the union's position.

    Debbie Bosanek, a spokesman for Buffett, told Business Insider that she alerted Buffett to the quote, and said he was shocked that it was attributed to him.

    "It is a very false representation," Bosanek said. "Mr. Buffett never, ever said Obamacare should be scrapped. He never said it, and he never thought it."

    The confusion stems from a website called Morning Money, which originally apparently dredged up 3-year-old comments and painted them as new. Buffett's comments came in a 2010 interview with CNBC, when he did say he would scrap the Senate's version of the bill. He criticized it for not attacking costs in an aggressive-enough manner. But he added that though he didn't like the Senate bill, he would vote for it rather than do nothing.

    In 2012, Buffett told Bloomberg TV the Supreme Court's decision to uphold Obamacare was the right one, and he said that the law was "the right step" toward controlling costs.

    The Weekly Standard and other conservative blogs picked up on the 2010 comments as new. They later added updates and/or clarifications. Morning Money didn't respond to a request for comment, but it later updated its story to note that the comments came in 2010. Its corrected version is still a misinterpretation, as Buffett was most critical of the then-current health-care system.

    Meanwhile, the AFL-CIO passed a resolution at its convention last week complaining that the law will be "highly disruptive" to Taft-Hartley multiemployer health plans run by many member unions. The AFL-CIO pressed the Obama administration, unsuccessfully, from a waiver from Obamacare rules that would have encouraged employers to stay in the Taft-Hartley plans, at a likely cost to taxpayers of $187 billion over 10 years.

    Some unions were pressing for the AFL-CIO to pass a resolution that called for the repeal of Obamacare, which didn't end up happening. 

    These two examples point to more evidence of a Republican bubble that wildly misinterprets the left's problems with the health-care law. And in doing so, they misinterpret the strength of their own position. 

    The AFL-CIO and Warren Buffett don't want to defund Obamacare, and they don't reinforce Republican-led arguments against it.

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