DAY'S END ROUNDUP

FROM THE BLOGS:

Senate Reform 101: The case against the constitutional option
Gregory Kroger at The Washington Monthly makes the case against senators changing their chamber's rules on the first legislative day of Congress.

The gun control bubble pops
Evidence suggests the White House has been trying to lower the bar on what it could achieve on gun reform, writes Jonathan S. Tobin at Commentary.

Through a glass darkly
Nobody seems to agree with what's wrong with "Zero Dark Thirty," David Cole writes at Foreign policy.

Fracking industry calls foul on EPA extension
Jillian Kay Melchior at The Corner reports on the Environmental Protection Agency extending its period for public comments on a new report on franking.

OTHER NEWS SOURCES:

Senate Dems: We'll back Obama if he raises debt limit unilaterally
Senate Democrats say they will support President Obama if he decides to increase the debt limit unilaterally, reports The Hill's Alexander Bolton.

Kirsten Gillibrand and the Hagel lobby
Chuck Hagel, Obama's nominee for secretary of Defense, reached out to Sen. Kirsten Gillibrand earlier in the week, according to Capital New York's Reid Pillifant.

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Higher Health Care Premiums Could Cause ObamaCare To Death Spiral

Doctor Using Stethoscope to Examine Toddler

This weekend, the New York Times reported on a development that’s completely unsurprising to critics of President Obama’s national health care law: “Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.” The Times story heavily suggests that the problem is that Obamacare didn’t give federal regulators enough power to outright reject rate increases deemed too high. But Reason‘s Peter Suderman makes that case that the real culprit could be Obamacare itself — particularly its requirement that all insurance policies pay out at least 80 percent of what it collects in premiums on medical expenses. Known as the “medical loss ratio” (MLR) rule, this requirement creates an incentive for insurers to hike premiums by reducing their profit margins on any given policy.

Whatever the cause of the higher premiums, however, this trend presents a key structural challenge to Obamacare. The health care law aims to prevent insurers from discriminating against those with pre-existing conditions, to make sure that policies cover a specified package of benefits, and to limit how much extra money insurers can charge older and sicker patients. All of these provisions increase costs and decrease insurance industry profits. But through the mandate forcing individuals to purchase insurance, the law hopes to push enough younger and healthier Americans into the insurance pool to offset theses cost increases. This is where the problem with rising premiums comes in.

The Times story notes that, “Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.” This is precisely the population that the federal government hopes to induce to purchase insurance through the mandate. But as the Obama administration argued before the Supreme Court, those who choose not to purchase insurance would still be in compliance with the law so long as they paid the tax penalty for not purchasing insurance. Should premiums continue to rise, more and more uninsured Americans are going to choose to pay the penalty rather than purchase expensive insurance. And those who go without insurance are more likely to be the ones who can afford to do so — young and healthy Americans with limited medical expenses. Should this occur, insurers would have to raise premiums even more to subsidize the expenses of the sicker beneficiaries they must cover under the law. This, in turn, would cause additional people to forgo insurance and pay the fine. And so on. This is known in the health care policy community as the “death spiral” and it’s one of the biggest threats to the structure of Obamacare.

With most of the major provisions of the health care law going into effect in 2014, this will be an important trend to keep an eye on.

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GOP Rep. Wants To Slash Flood Preparedness Funding In Hurricane Sandy Aid Package

Georgia Rep. Paul Broun (R) has proposed amendments cutting $300 million from the $17 billion House relief package for states affected by Hurricane Sandy. Among those cuts are nearly $20 million meant for studying future flood risks.

Such studies would lead to investments that would help reduce the risks of major flooding and to better infrastructure projects. But Broun, a stalwart conservative, believes that represents wasteful spending, The Hill reports:

Two of Broun’s amendments would affect the main bill, by removing $19.5 million to study future flood risks and removing $3 million for oil spill research.

Hurricane Sandy left large swaths of New York and New Jersey underwater. The Senate’s aid package included a total of $5.3 billion for future flood prevention, and experts have begun exploring various ways to protect New York City and New Jersey from the possibility of major flooding in the future. As the Sacramento Bee editorialized, “by failing to finance flood control projects and programs to protect communities against other natural disasters, Congress is adding to the potential liabilities of the federal government.”

House Republicans initially decided not to take up the Sandy relief package before passing a smaller bill as the last Congress ended. Some Republicans have renewed their calls that the relief funding be offset by spending cuts elsewhere, including cuts to every discretionary spending program in the federal budget.

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CDC: This Year’s Flu Season Is Officially An Epidemic

The Centers for Disease Control and Prevention made it official on Friday: This year’s severe flu season is an epidemic . It passed the threshold last week, with 7.3 percent of deaths from influenza or pneumonia. Forty-seven states are now reporting widespread activity after the season got to an especially early start.

Vaccination remains the “best tool we have to prevent the flu,” and the best time to receive a vaccine is before the season even starts. Even so, well over half of Americans neglect to get their flu shots. With the season well underway, some areas are reporting vaccine shortages.

One interesting measurement of flu season trends is Google search data for flu-related terms, which has skyrocketed in recent weeks. But this chart from the CDC, showing hospital visitors with flu-like symptoms, might provide a more appropriate context:

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Remarks by the President in Nomination of Secretary of the Treasury

The White House

Office of the Press Secretary

East Room

1:40 P.M. EST

THE PRESIDENT:  Good afternoon, everybody.  Please have a seat.  A little more than four years ago, I stood with Mr. Tim Geithner and announced him as my first nominee to my Cabinet.  We were barely two months into the financial crisis.  The stock market had cratered.  The housing market had cratered as well.  Bank after bank was on the verge of collapse.  And worst of all, more than 800,000 Americans would lose their jobs in just that month.  And the bottom was not yet in sight.

So I couldn’t blame Tim when he tried to tell me he wasn’t the right guy for the job.  (Laughter.)  But I knew that Tim’s extensive experience with economic policy made him eminently qualified, and I also knew that he could hit the ground running.  As Chairman of the New York Federal Reserve, he had just spent several sleepless and chaotic weeks immersed in the complexities of the crisis, and had been working closely with his Republican predecessor at Treasury to save the financial system.

Then, with the wreckage of our economy still smoldering and unstable, I asked Tim to help put it back together.  And thanks in large part to his steady hand, our economy has been growing again for the past three years, our businesses have created nearly 6 million new jobs.  The money that we spent to save the financial system has largely been paid back.  We’ve put in place rules to prevent that kind of financial meltdown from ever happening again.  An auto industry was saved.  We made sure taxpayers are not on the hook if the biggest firms fail again.  We’ve taken steps to help underwater homeowners come up for air, and open new markets to sell American goods overseas.  And we’ve begun to reduce our deficit through a balanced mix of spending cuts and reforms to a tax code that at the time that we both came in was too skewed in favor of the wealthy at the expense of middle-class Americans.

So when the history books are written, Tim Geithner is going to go down as one of our finest Secretaries of the Treasury.  (Applause.)

All right, don't embarrass him.  (Laughter.) 

On a personal note, Tim has been a wonderful friend and a dependable advisor throughout these last four years.  There’s an unofficial saying over at Treasury -- “no peacocks, no jerks, no whiners.”  That would be a good saying for all of Washington -- (laughter) -- "no peacocks, no jerks, no whiners."  Few embody that ideal better than Tim Geithner.  That’s why, when Tim was thinking about leaving a couple of years ago -- (laughter) -- I had to personally get on my knees with Carole to help convince him to stay on a little bit longer.  And I could not be more grateful to Carole and the entire Geithner family for allowing him to make the sacrifices that so many of our Cabinet members ask of their families in serving the country.

The fact is, while a lot of work remains, especially to rebuild a strong middle class and offer working folks new pathways to rise into the middle class, our economy is better positioned for tomorrow than most of those other countries hit by the financial crisis.  The tough decisions Tim made and carried out deserve a lot of credit for that.  So I understand that Tim is ready for a break.  Obviously, we're sad to see him go.  But I cannot think of a better person to continue Tim's work at Treasury than Jack Lew.

This is bittersweet not only because Tim is leaving, but also because Jack has been my Chief of Staff for the last year.  He was my budget director before that.  I trust his judgment.  I value his friendship.  I know very few people with greater integrity than the man to my left.  And so I don’t want to see him go because it's working out really well for me to have him here in the White House.  But my loss will be the nation’s gain. 

Jack has the distinction of having worked -- and succeeded -- in some of the toughest jobs in Washington and the private sector.  As a congressional staffer in the 1980s, he helped negotiate the deal between President Reagan and Tip O’Neill to save Social Security.  Under President Clinton, he presided over three budget surpluses in a row.  So for all the talk out there about deficit reduction, making sure our books are balanced, this is the guy who did it -- three times.  He helped oversee one of our nation’s finest universities and one of our largest investment banks. 

In my administration, he has managed operations for the State Department and the budget for the entire executive branch.  And over the past year, I’ve sought Jack’s advice on virtually every decision that I’ve made, from economic policy to foreign policy.

One reason Jack has been so effective in this town is because he is a low-key guy who prefers to surround himself with policy experts rather than television cameras.  And over the years, he’s built a reputation as a master of policy who can work with members of both parties and forge principled compromises. 

And maybe most importantly, as the son of a Polish immigrant, a man of deep and devout faith, Jack knows that every number on a page, every dollar we budget, every decision we make has to be an expression of who we wish to be as a nation, our values.  The values that say everybody gets a fair shot at opportunity and says that we expect all of us to fulfill our individual obligations as citizens in return.  So Jack has my complete trust.  I know I'm not alone in that. 

In the words of one former senator, “Having Lew on your team is the equivalent as a coach of having the luxury of putting somebody at almost any position and knowing he will do well.”  And I could not agree more.  So I hope the Senate will confirm him as quickly as possible. 

I want to personally thank both of these men and their families, especially Carole and Ruth, for their extraordinary service to our country.

And with that, I'd like to invite them to say a few words, starting with Tim. 

SECRETARY GEITHNER:  Mr. President, it's been a privilege to serve you.  I'm honored and grateful that you asked me to do this, really I am.  And I'm very proud of what my colleagues at Treasury and your economic team was able to help you accomplish these first four years. 

When you stepped into this building as President, you were confronted with a world in crisis, the worst crisis in generations.  And you made the necessary, the hard, the politically perilous choices that saved the American people, saved American industry, saved the global economy from a failing financial system.  And your successful response to the crisis of course did not solve all the nation's challenges.  It could not have done so.  But the actions you took along with those of a forceful and creative Federal Reserve have made the country stronger and have put us in a much better position to face the many challenges still ahead of us -- and they are many.

I have the greatest respect for Jack Lew.  I know him as a man of exceptional judgment, calm under pressure, with an extraordinary record of accomplishment and experience over decades spent at the center of American economic policy.  He's committed to defending the safety net for the elderly and the poor.  He understands what it takes to create the conditions for stronger economic growth and broader economic opportunity.  And he understands that to govern responsibly is to govern with a recognition that we have limited fiscal resources. 

Now, like Jack, I've spent my professional life in this world of public policy and public service.  And as all of you know, our families carry a large share of the burdens we assume in public life.  And I feel incredibly fortunate that my wife Carole and my family have been willing to allow me to do this.  And I thank them for their support and their patience.  And I understand their occasional impatience.  (Laughter.)

I want to express my admiration and my appreciation for the women and the men of the Treasury Department.  Those who came to serve you these years of crisis and the civil servants of the Treasury with whom I first started working in 1988, they are exceptionally talented and honorable public servants.  I'm very proud of what they have helped you accomplish.  And I am confident that my successor will find them the extraordinary asset they are to the nation.

And I also hope that Americans will look at the challenges we face today and decide, as many of you in this room have, that in spite of the divisive state of our political system today that serving your country is compelling and rewarding work.  That was my experience, and I am grateful and will always be grateful to you for having given me the opportunity to serve you as the 75th Secretary of the Treasury.  (Applause.)

MR. LEW:  Mr. President, it has been my honor to serve as your Chief of Staff and before that at OMB and the State Department.  It’s really been a privilege to come to work every day as part of a team that’s dedicated to building a sound economy and a safer world.

Tim, you have been a friend and a colleague for many years -- actually, decades -- and the American people are better off for your outstanding service.  And I thought I knew you pretty well, but it was only yesterday that I discovered that we both share a common challenge with penmanship.  (Laughter.)  Tim, I join the President and everyone here in wishing you and Carole and your whole family well.

As a kid growing up in Queens, I had dreams of making a difference in the world.  These dreams were nurtured in a home where the gifts of American freedom and opportunity were cherished and never taken for granted, and the responsibility to engage in issues of public concern were part of daily life.  I will always be grateful to my parents for grounding me in the values that have remained central to my personal and professional life.

I grew up professional in the office of Speaker O’Neill, whose compass was always clear and who demanded unvarnished advice on how best to reach the desired destination.  Mr. O’Neill cared little about your age or rank, and only about whether or not you did the hard work to inform the decisions of the day.  And he took a big chance giving a lot of responsibility to a very young man, and for that I’ll always be thankful.

Serving at OMB first under President Clinton and more recently in this administration, I worked with one of the finest teams in the government to execute a responsible fiscal policy while advancing policies to promote economic growth.  I’m delighted to see so many of my friends from OMB here today. 

At the State Department, I worked closely with our great Secretary of State and my friend, Hillary Clinton, to advance our nation’s national security agenda, including our international economic policies.

And as Chief of Staff, I’ve had the pleasure of working with a tremendously talented White House team, which manages policy, politics, communications, and complex operations every day with grace, skill, and loyalty. 

If confirmed, I look forward to joining the Treasury Department, whose people are legendary for their skill and knowledge.  It’s a team that I’ve collaborated with closely over many years and have come to respect greatly.

Finally, thank you to Ruth, Shoshi, Danny, Zahava, and the kids for your endless tolerance with the demands of a schedule that tests all family patience.  And thank you, Mr. President, for your trust, your confidence, and friendship.  Serving in your administration has allowed me to live out those values my parents instilled in me, and I look forward to continuing with the challenges ahead.  (Applause.)

THE PRESIDENT:  These are two outstanding public servants.  I think the only point that I want to make -- leave you with is the fact that I had never noticed Jack’s signature -- (laughter) -- and when this was highlighted yesterday in the press, I considered rescinding -- (laughter) -- my offer to appoint him.  Jack assures me that he is going to work to make at least one letter legible -- (laughter) -- in order not to debase our currency should he be confirmed as Secretary of the Treasury.

Thank you very much, everybody.  (Applause.)

END 
1:56 P.M. EST

We'll soon reach a milestone in Afghanistan -- when Afghan forces take full responsibility for their nation's security and the war draws to a close.

The President asks Jacob Lew -- the current White House chief of staff -- to serve as the next Treasury Secretary.

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President Obama Signs Pennsylvania Disaster Declaration

The White House

Office of the Press Secretary

The President today declared a major disaster exists in the Commonwealth of Pennsylvania and ordered Federal aid to supplement commonwealth and local recovery efforts in the area affected by Hurricane Sandy during the period of October 26 to November 8, 2012.

Federal funding is available to commonwealth and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency work and the repair or replacement of facilities damaged by Hurricane Sandy in the counties of Bedford, Bucks, Cameron, Dauphin, Forest, Franklin, Fulton, Huntingdon, Juniata, Monroe, Northampton, Pike, Potter, Somerset, Sullivan, and Wyoming.

Federal funding is also available on a cost-sharing basis for hazard mitigation measures for the entire commonwealth.

W. Craig Fugate, Administrator, Federal Emergency Management Agency (FEMA), Department of Homeland Security, named Thomas J. McCool as the Federal Coordinating Officer for federal recovery operations in the affected area.

FEMA said additional designations may be made at a later date if requested by the commonwealth and warranted by the results of further damage assessments.

FOR FURTHER INFORMATION MEDIA SHOULD CONTACT:  FEMA NEWS DESK AT (202) 646-3272 OR FEMA-NEWS-DESK@DHS.GOV

We'll soon reach a milestone in Afghanistan -- when Afghan forces take full responsibility for their nation's security and the war draws to a close.

The President asks Jacob Lew -- the current White House chief of staff -- to serve as the next Treasury Secretary.

view all related blog posts

View the original article here

DREAMer’s Family Released After ICE Agents Detain Them

Federal immigration agents raided the home of Erika Andiola, an undocumented immigrant and co-founder of the Arizona DREAM Act Coalition, and detained her mother and brother, who are also undocumented. Initially, Andiola tweeted that her brother told her that her mom would be deported “first thing in the morning.” Her brother was released early, and it was later announced that Immigration and Customs Enforcement officials would exercise prosecutorial discretion to release Andiola’s mother, Maria Arreola.

Before Andiola’s mother was released, the immigrant rights community quickly organized a protest outside of the Department of Homeland Security’s office and calls to state and federal offices asking for her family’s release.

This is not the first example of an immigrant’s deportation being halted because of media and grassroots attention to the case. In June, a young undocumented immigrant was granted a one-year deportation reprieve one day after the Washington Post wrote a story about her case. “It makes me extremely sad that we had to go through all of this…to stop one deportation,” Andiola said on a call with reporters. “We don’t have to do this.”

Marielena Hincapié, executive Director of the National Immigration Law Center, said this case is another example of why the nation needs immigration reform. Even though Maria Arreola has been released, there is no guarantee that Andiola’s mother won’t be picked up by ICE agents again because she has a previous removal order from 1988. The only certainty would be if the Obama administration granted her deferred action. “We cannot keep fighting these deportation cases on dreamer at a time, one worker at a time, one family at a time,” Hincapié said.

There have been a record number of deportations under President Obama, and last year, the Obama administration announced a case-by-case review of deportations to ensure that lower-priority deportation cases “are being set aside so we can focus more on our more serious cases of convicted criminals and other high priority categories.” Obama has taken steps to try to limit deportations that separate families living in the U.S., but as a new report shows that immigration officials detained more people in 2012 than the federal bureau of prisons holds, officials are not using the discretionary policies available.

The U.S. also spends more on immigration enforcement — $18 billion — than every other federal law enforcement agency combined. And in two years, ICE agents have deported more than 200,000 undocumented immigrants whose children are U.S. citizens, making up 23 percent of all deportations between July 1, 2010, and Sept. 31, 2012.

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73 Percent Of Evangelical Leaders Support Increased Gun Regulations

Vice President Joe Biden, the head of President Obama’s task force to curb gun violence, held meetings with both supporters and opponents of stricter gun restrictions, and his task force is set to make its recommendations by next Tuesday. Biden met with a dozen religious leaders Wednesday night, when he urged them that there was moral reason to take action.

New polling shows that religious leaders agree. According to a survey from the National Association of Evangelicals, nearly three-quarters of evangelical leaders support increasing restrictions on guns as a way to curb America’s gun violence epidemic, according to a release from the organization:

When asked whether the government should increase gun regulations, 73 percent said it should.

“Evangelicals are pro-life and deeply grieve when any weapons are used to take innocent lives,” said Leith Anderson, President of the National Association of Evangelicals (NAE). “The evangelical leaders who responded to the NAE survey support the Second Amendment right to bear arms but also want our laws to prevent the slaughter of children.”

The United States Conference of Catholic Bishops also called for increased gun regulations in the wake of the Sandy Hook school shooting in Newtown, Connecticut. “With regard to the regulation of fire arms, first, the intent to protect one’s loved ones is an honorable one, but simply put, guns are too easily accessible,” USCCB said in a December statement. As far back as 1978, the USCCB has advocated for stronger gun restrictions, including “the registration of handguns” and “the licensing of handgun owners.” In the 1978 statement, the USCCB said it believed “that only prohibition of the importation, manufacture, sale, possession and use of handguns (with reasonable exceptions made for the police, military, security guards and pistol clubs where guns would be kept on the premises under secure conditions) will provide a comprehensive response to handgun violence.”

And Daniel Darling, an evangelical pastor in Chicago, where 87 percent of the city’s 500 homicides were gun related last year, wrote that people of faith should “advocate making it harder for people to acquire guns, even sensible weapons purchased for self-defense or hunting. Gun ownership should be a privilege earned by good behavior and conferred only on the most trustworthy of our citizens.”

A majority (52 percent) of religious people supported stricter gun laws in a survey conducted by the Public Religion Research Institute in August 2012, months before the Sandy Hook massacre focused the nation’s attention on gun violence. (HT Faith In Public Life)

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Major Flu Outbreak Could Slow US Economy Further

Boston Declares Flu An Emergency A Boeing 787 Dreamliner experienced brake problems today, with CNBC's Larry Kudlow; and Boston's Mayor is declaring this year's flu season and public health emergency, with Alysha Palumbo, NECN.

This particularly devastating flu season started five weeks earlier than usual and caught many people off guard. Flu season usually peaks in late January or early February but by November the flu was already severe and widespread in some parts of the South and Southeast, and now in the Northeast and Midwest.

There have been more than 2,257 hospitalizations associated with the flu, according to the CDC. Some 18 children in the U.S have died from it.

The city of Boston has declared a pubic health emergency as a result of the flu outbreak. Massachusetts said some 18 people have died in the state from flu related illness. South Carolina reports 22 dead so far. Two people died in Sacramento, California. In Minnesota, 900 people were hospitalized because of the flu and four people died.

For the fourth week in a row, the proportion of people seeing health care providers for flu like illness is above the national average and jumped from 2.8 percent to 5.6 percent in that time, according to the Centers for Disease Control and Prevention. Last season's proportion peaked at 2.2 percent, the CDC reports.

According to the Bureau of Labor Statistics, employee absences are traditionally up during the winter flu season -- some 32 percent higher than the rest of the year. The highest number of absentees was 3.3 million in 2008 -- a severe flu season.

Employees who are sick and go into work aren't really doing their colleagues any favors, said John Challenger, CEO of Challenger, Gray & Christmas Inc, an outplacement firm.

"Sick employees may think they're doing the right thing by going in but the fact is they are only making matters worse by exposing themsevles to others," Challenger said.

"The business culture is changing and I think most firms are more accepting of people calling in sick, especially during the flu season," said Challenger. (Read more: More Than Flu Hitting)

"What a business should be doing is offering flu shots, and giving comp days to workers who are sick and feel like coming in. Coming in sick and doing sub par work won't really help," argued Challenger.

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REPORT: Rape Often Targeted, Underreported In India

Protester at Dec. 18 rally in New Dehli

A report from a UN-affiliated working group on human rights in India exposes the constant struggle that women face, as sexual violence is used by security forces to implement their whims and targeted against lower castes.

Drafted by the Working Group on Human Rights in India and the UN (WGHR), “Human Rights in India: Status Report 2012” covers the gamut of human rights failures that take place within the state. Several sections deal with sexual assault and violence towards women in both conflict zones and during peacetime, highlighting the neglect that many of these cases face from the legal system and authorities. Among other statistics the WGHR uncovered, one of the most staggering is that “every 60 minutes two women are raped, and every six hours a young married woman is found beaten to death, burnt or driven to suicide.”

Security forces within India are frequent perpetrators of violence against women, according to the report, though the stigma associated with victimhood results in cases of rape being under reported. At one point, the report accused the armed forces of thwarting investigations where “circumstantial evidence strongly indicates the involvement of armed forces.” Prosecution of those in the armed forces discharged for committing rape is particularly difficult as well, thanks to provisions in India’s legal system that require a waiver from the state or central government to allow charges to go forward.

Women of the Dalit group — the lowest place in the Indian caste system — face a particular stigma and are the subject of a disproportionate amount of violence:

Violence against Dalit women is targeted, 361 and atrocities committed against them include: verbal abuse and sexual epithets, naked parading, pulling out of teeth, tongue and nails, and violence, including murder. Dalit women are also threatened by rape as part of collective violence by higher castes. The National Crime Record Bureau (NCRB) reported a total of 1,349 rape cases of Dalit women for 2010, with the state of Madhya Pradesh reporting 316 cases, followed by Uttar Pradesh with 311 cases. There are cases of kidnapping and abduction of women, with Uttar Pradesh alone accounting nearly 48.5% of the 511 cases for 2010. Notably, there is no disaggregated data collected on atrocities against Dalit women.

The report comes at a time when violence against women is in the spotlight in India, following the horrific rape and death of a young woman in the capital city New Dehli. Mass protests broke out throughout the country in the aftermath of the vicious attack on the victim — identified as Jyoti Signh Pandi — with the potential for a change in India’s laws beginning to take shape.

Meanwhile, the trial against the accused attackers has already been closed to the media due to the interest the case has generated. The trial is sure to be contentious as defense lawyers have already both engaged in blaming the victim for the attack and claiming that police tortured a confession out of one of the defendants.

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UPDATE 2-Merck begins overseas recall of HDL cholesterol drug

* Merck says recalling drug from wholesalers

* Says retail supplies likely available until mid-March

* Says will discourage doctors from prescribing drug

Jan 11 (Reuters) - Merck & Co said it is recalling Tredaptive, its medicine to raise "good" HDL cholesterol levels, in overseas markets where it is sold, after it failed to prevent heart problems in a large study and raised safety concerns.

The medicine is not approved in the United States but the U.S. drugmaker sells it in about 40 countries.

Merck said it would recall stocks of Tredaptive now held by wholesalers, but that pharmacies can continue to dispense their remaining supplies. Even so, the company said it plans to discourage doctors from prescribing the pill based on negative findings from the trial which were announced last month. The study followed more than 25,000 patients in Europe and China for almost four years.

The company said it will encourage doctors to consider alternative treatments to control cholesterol, but advised patients not to discontinue Tredaptive without first speaking with their physicians.

Merck spokeswoman Pam Eisele said the company expects available retail supplies of Tredaptive to be exhausted by mid-March.

Tredaptive combines an extended-release form of niacin with another drug meant to reduce facial flushing, a side effect of niacin. The medicine has annual sales of less than $20 million. That makes it a tiny product for Merck, which has global annual revenue of about $50 billion.

Merck in December said Tredaptive did no better in the study at preventing heart attacks, deaths or strokes than traditional statin drugs that lower "bad" LDL cholesterol.

Moreover, Merck said the medicine significantly raised the incidence of some types of nonfatal but serious side effects in the study. They included blood, lymph and gastrointestinal problems, as well as respiratory and skin issues.

Tredaptive was approved in the European Union in 2008, but the U.S. Food and Drug Administration was unwilling to approve the pill until Merck conducted the costly long-term study to better assess its safety and effectiveness.

Some analysts had expected Tredaptive to capture annual global sales of more than $1 billion, if it were to win approval in the United States.

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Don’t Believe The Media Hype: Obamacare Is Not Responsible For Double Digit Premium Hikes

Small businesses and individual health policy holders could face dramatic premium spikes this year, as some insurers file double digit increases and attribute the changes to the Affordable Care Act. The sticker shock is mostly the result of rising health care costs — and the prevalence of sicker beneficiaries in health insurance risk pools. The media, however, is blaming health care reform.

For instance, Friday’s Politico reported that premiums are increasing across the country as “All those new consumer benefits packed into the health reform law — birth control without a co-pay, free preventive care and limits on when insurers can turn down a customer — had to be paid for somehow.” Policy holders may experience 10 to 20 percent rate hikes, it warns, as insurers are “working the health reform law’s 2014 fees into their 2013 bills.”

So how much is Obamacare responsible for? Five, maybe eight percent? The answer is less than two.

Insurers are arguing that the costs of Obamacare’s annual fee on the industry, its requirement that companies contribute to a reinsurance program, and new benefits and regulations have to be passed down to consumers. “There’s a massive new health insurance tax that starts in 2014,” Robert Zirkelbach, the spokesman for America’s Health Insurance Plans told Politico. “For policies that are sold in 2013 and extend into next year, there’s going to be taxes imposed. … As a result, like all taxes, they will be reflected in premiums charged.”

There are new costs in 2014, but they have little to do with reform. Consider the insurers’ own rate justification filings, in which companies have to substantiate the raises. Aetna in Pennsylvania, for instance, seeks to increase rates by an average of 16.49 percent, but as it explains in its filing, 63.18 percent of the increase is attributed to the “cost of providing healthcare services to policyholders.” The Affordable Care Act is responsible for a tiny portion of the increase:

Impact of New Taxes and Fees

The Affordable Care Act (ACA) includes several new taxes and fees payable in 2014, including two that specifically apply to insured products — the health insurer fee and the reinsurance contribution. These new fees result in additional costs and are reflected in our updated rates for policies that extend into 2014. The overall impact of these costs on this filing is as follows:
* Health Insurer Fee: 1.0%
* Reinsurance Contribution: 0.5%

Washington & Lee Law School professor Timothy Jost predicted that “insurers in the individual market will benefit substantially from reinsurance payments” and will be “spared some administrative costs-notably the cost of underwriting which should be quite substantial.” ” The cost of new benefits should not be a big deal,” he continued, since “most of the costs of health insurance are for inpatient, outpatient, physician, lab, radiology, and pharmaceuticals, which virtually all insurers now cover.”

“I suspect that what is going on is a combination of legitimate concern about new costs, overestimation of what those costs will be and underestimation of offsetting savings, taking a chance to attack the ACA, and grabbing the opportunity to make some profit,” Jost added.

The Affordable Care Act reforms the individual health care market and allows businesses and individuals to take advantage of large risk pools by purchasing coverage through state-based health care exchanges. Over time, insurers will see an influx of new customers, many of whom will benefit from the law’s tax credits and will see their health care bills decrease.

In the short term, however, regulators must remain vigilant. As Sarah Lueck, of the Center for Budget and Policy Priorities (CBPP), told ThinkProgress, “The question of whether these increases are justified is something that regulators should closely scrutinize.”

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