HHS Seeks Obamacare Funds — But Is Ready To Scramble

Here’s today’s billion-dollar question: Are Republicans going to allow the administration to spend more money on Obamacare?

Don’t count on it.

Continue Reading The landmark health law may have survived the Supreme Court, countless repeal efforts and a presidential election — but none of that required Republicans to shower money on Obamacare. And with at least 33 states refusing to build the critical health insurance exchanges, the federal government is unexpectedly on the hook to set them up — and short of money to do so. 

The White House requested $1.5 billion more for the health law implementation in its budget Wednesday, but health officials know they’re not likely to get it.

As past funding requests have been spurned, Health and Human Services officials contend they’ve been able to cobble together the funds and won’t miss the Oct. 1 start of open enrollment in exchanges. Any big delay, or major hitches would be a huge blow to Obamacare and reopen the law to  political warfare before the 2014 mid-term elections.

“The Supreme Court has ruled, there has been an election, we intend to implement the law,” HHS Secretary Kathleen Sebelius told reporters Wednesday.  She acknowledged that without an infusion of new money, she’s probably going to have to keep juggling and scrambling to keep it all on track.

HHS to date hadn’t been very specific about how it’s been moving ahead — even when lawmakers asked. But Sebelius told reporters that the department hadn’t yet spent the full $1 billion that was initially allocated for implementation — a figure that was decided on long before the states balked at exchange-building. Sebelius said the department had been  “judicious” in spending it, and officials said approximately $235 million is left in that fund.

In addition, like other Cabinet secretaries, Sebelius has some discretion over certain department accounts, and she has also dipped into a public health and prevention fund that’s part of the health law.

The money for the 17 states and Washington DC doing their own exchanges isn’t such a challenge: The health law basically gave them a blank check. HHS expects to send out another $4 billion in exchange grants between the 2013 and 2014 fiscal years.

Republicans have declined requests for more implementation money repeatedly. Just a few weeks ago they refused to add nearly a billion dollars to the latest continuing resolution — and the Democratic-led Senate didn’t push the issue.

HHS is getting used to searching for alternatives.

“We’ve had to come up with Plan B and we’ve been working very hard to develop that,” HHS Assistant Secretary for Financial Resources Ellen Murray told the Wednesday afternoon briefing.

Even when the law was passed three years ago, $1 billion for implementation was thought to be just the start. Getting the massive law up and running was expected to cost 10 times that. And that was before the federal exchange task ballooned as conservative states refused to do much to make the law a success.

View the original article here

Ready or Not: States Brace for Obamacare

Enrollment season for Medicare Advantage plans and Obama's health reform plan is six months away. One big question is how many people will show up to be insured, reports CNBC's Bertha Coombs.

The nation's largest Medicaid insurer, UnitedHealth also said it expects to participate in anywhere from 10 to 24 markets.

"We are expecting and preparing for an 'exchange' category of coverage," said UnitedHealth spokesman Tyler Mason, "We anticipate this category will have meaningful participation and that we will serve the majority of those markets."

While the Obama administration is building and will operate half of the state insurance exchanges, and partner on exchanges with more than half dozen other states, insurers still have to meet both federal and state insurance regulations for each individual exchange.

(Read More: Your Company's Next Health Plan: Drop the Doughnut)

Connecticut-based Cigna has decided it will not participate in the insurance exchange in its home state and opted out of bidding for a federal multistate plan option, but still plans to take part in other state marketplaces.

"We expect to sell individual and family plans both on and off exchanges in select markets where we can deliver on our strengths," said Cigna spokesman Joseph Mondy.

The big question is how much new demand insurers will see in the individual market, under the Obamacare Medicaid Expansion plan, which would make low-income adults newly eligible for the state-federal health program for the poor.

A 2012 Kaiser Commission study estimated more than 21 million people could gain coverage under Medicaid expansion by 2022 if all states opted in to the plan; roughly 7 million of them children and disabled adults who already qualify but are not currently enrolled.

(Read More: How Obamacare Will Change Health Benefits This Year)

The Supreme Court gave states the right to opt out of Medicaid expansion, and so far, Texas, Louisiana, Tennessee and 15 other states led by Republican governors have opted out.

Yet, analysts say those states could well see their Medicaid rolls and costs expand. The rollout of Obamacare in January will likely prompt eligible people not currently enrolled to sign up for coverage.

"The states are nervous about that," said Dianne Heffron, a former official with the Center for Medicare & Medicaid Services, and now with Mercer's Government Human Services Consulting unit.

While the federal government will pick up the full cost of newly eligible Medicaid enrollees through 2017, state reimbursement for those who would have been eligible before the passage of Obamacare will paid under 2009 federal reimbursement levels, which range from 50 to 75 percent.

"If you would have qualified for eligibility in Medicaid under those '09 standards you are considered not newly eligible but oldly eligible," said Heffron. "The state picks up a much larger portion than the newly eligible people."

Given the scale and the complexity of all the work still to be done to before next fall, Heffron expects the start of the open enrollment season in the fall to be bumpy. Corlette agrees, noting it took six months to work out the problems with the rollout of the Medicare Part D Drug program for seniors in 2005.

"It's about the biggest federal project anybody's ever undertaken," Corlette said. "Medicare pales in comparison to what they're trying to build."

(Read More: Congress' Retirement Package Versus Yours)

—By Bertha Coombs; Follow her on Twitter: @coombscnbc

View the original article here

Presidential Memorandum - Delegation of Authority to Appoint Commissioned Officers of the Ready Reserve Corps of the Public Health Service

Presidential Memorandum - Delegation of Authority to Appoint Commissioned Officers of the Ready Reserve Corps of the Public Health Service | The White House Skip to main content | Skip to footer site map The White House. President Barack Obama Get Email UpdatesContact Us Go to homepage. The White House Blog Photos & Videos Photo Galleries Video Performances Live Streams Podcasts 2012: A Year in Photos

A unique view of 2012

Briefing Room Your Weekly Address Speeches & Remarks Press Briefings Statements & Releases White House Schedule Presidential Actions Executive Orders Presidential Memoranda Proclamations Legislation Pending Legislation Signed Legislation Vetoed Legislation Nominations & Appointments Disclosures Visitor Access Records Financial Disclosures 2012 Annual Report to Congress 2011 Annual Report to Congress 2010 Annual Report to Congress on White House Staff A Commitment to Transparency

Browse White House visitor logs

Issues Civil Rights It Gets Better Defense End of Iraq War Disabilities Economy Jobs Reform and Fiscal Responsibility Strengthening the Middle Class A Plan for Refinancing Support for Business Education Energy & Environment Ethics Foreign Policy Health Care Homeland Security Immigration Taxes Tax Receipt The Buffett Rule Rural Urban Policy Veterans Joining Forces Technology Seniors & Social Security Service Snapshots Creating Jobs Health Care Small Business PreK-12 Education Women Violence Prevention Now Is The Time

To do something about gun violence

Immigration Reform

Creating an Immigration System for the 21st Century

The Administration We the People

Create and Sign Petitions Now

President Barack Obama Vice President Joe Biden Being Biden Audio Series First Lady Michelle Obama Dr. Jill Biden The Cabinet White House Staff Chief of Staff Denis McDonough Deputy Chief of Staff Rob Nabors Deputy Chief of Staff Alyssa Mastromonaco Counselor to the President Peter Rouse Senior Advisor Valerie Jarrett Executive Office of the President Other Advisory Boards About the White House White House On the Go

Download our mobile apps

Easter Egg Roll

Be Healthy, Be Active, Be You: April 1, 2013

Inside the White House Interactive Tour West Wing Tour Video Series Décor and Art Holidays Presidents First Ladies The Oval Office The Vice President's Residence & Office Eisenhower Executive Office Building Camp David Air Force One White House Fellows President’s Commission About the Fellowship Current Class Staff Bios News and Newsletters White House Internships About Program Presidential Department Descriptions Selection Process Internship Timeline & FAQs Tours & Events 2013 Easter Egg Roll Kitchen Garden Tours Take a Virtual Tour of the White House Mobile Apps Our Government The Executive Branch The Legislative Branch The Judicial Branch The Constitution Federal Agencies & Commissions Elections & Voting State & Local Government Resources /* Maximize height of menu features. */if(typeof(jQuery)!='undefined')jQuery.each($('#topnav'),function(i,v){var o=$(v),oh=o.height(),sh=o.siblings().height();if(oh Home • Briefing Room • Presidential Actions • Presidential Memoranda   The White House

Office of the Press Secretary

For Immediate Release March 29, 2013 Presidential Memorandum - Delegation of Authority to Appoint Commissioned Officers of the Ready Reserve Corps of the Public Health Service March 29, 2013 MEMORANDUM FOR THE SECRETARY OF HEALTH AND HUMAN SERVICES SUBJECT: Delegation of Authority to Appoint Commissioned Officers of the Ready Reserve Corps of the Public Health Service By virtue of the authority vested in me as President by the Constitution and the laws of the United States, including section 301 of title 3, United States Code, I hereby assign to you the functions of the President under section 203 of the Public Health Service Act, as amended by Public Law 111-148, to appoint commissioned officers of the Ready Reserve Corps of the Public Health Service. Commissions issued under this delegation of authority may not be for a term longer than 6 months except for commissions that place officers in the Centers for Disease Control and Prevention's Epidemiological Intelligence Service, the Senior Commissioned Officer Student Training and Extern Program, the Indian Health Service Pharmacy Residency Program, the Indian Health Service Health Professions Scholarship Program, or the National Health Service Corps Scholarship Program, which may not be for a term longer than 2 years. Officers appointed pursuant to this delegation may not be appointed to the Ready Reserve Corps of the Public Health Service for a term greater than those outlined in this memorandum other than by the President. This authority may not be re-delegated. My memorandum of May 31, 2011 (Delegation of Authority to Appoint Commissioned Officers of the Ready Reserve Corps of the Public Health Service), is hereby revoked.You are authorized and directed to publish this memorandum in the Federal Register. BARACK OBAMA

Blog posts on this issue March 29, 2013 5:47 PM EDTWeekly Wrap Up: ‘The Promise of America”

Here’s a quick glimpse at what happened this week on WhiteHouse.gov.

March 29, 2013 4:11 PM EDTIn Miami, President Obama Talks About his Plan to Put People to Work Rebuilding America

Despite strong efforts to fix our broken national infrastructure over the past four years, much work needs to be done if we are to prove to the world that there is no better place to do business than in the United States.

March 29, 2013 3:02 PM EDTOpen Government: A Time for Self-Assessment

The Obama Administration has harnessed new technology to engage the public, worked to disclose information more quickly, and given citizens a greater voice in decision-making. There is more work to do, and we remain committed to continuing this in the second term.

view all related blog posts ul.related-content li.views-row img {float: left; padding: 5px 10px 0 0;}ul.related-content li.view-all {padding-bottom: 3em;} Stay ConnectedFacebookTwitterFlickrGoogle+YouTubeVimeoiTunesLinkedIn   Home The White House Blog Photos & Videos Photo Galleries Video Performances Live Streams Podcasts Briefing Room Your Weekly Address Speeches & Remarks Press Briefings Statements & Releases White House Schedule Presidential Actions Legislation Nominations & Appointments Disclosures Issues Civil Rights Defense Disabilities Economy Education Energy & Environment Ethics Foreign Policy Health Care Homeland Security Immigration Taxes Rural Urban Policy Veterans Technology Seniors & Social Security Service Snapshots Women Violence Prevention The Administration President Barack Obama Vice President Joe Biden First Lady Michelle Obama Dr. Jill Biden The Cabinet White House Staff Executive Office of the President Other Advisory Boards About the White House Inside the White House Presidents First Ladies The Oval Office The Vice President's Residence & Office Eisenhower Executive Office Building Camp David Air Force One White House Fellows White House Internships Tours & Events Mobile Apps Our Government The Executive Branch The Legislative Branch The Judicial Branch The Constitution Federal Agencies & Commissions Elections & Voting State & Local Government Resources En español Accessibility Copyright Information Privacy Policy Contact USA.gov Developers Apply for a Job

View the original article here

Six Months to Go –– Will the Health Insurance Exchanges Be Ready on Time? Survey: Health Plan Execs Don't Think So

As the Obama administration continues its top secret effort to build federal insurance exchanges in about 34 states while 16 states are doing it on their own, that continues to be the big question.

HHS is using IT consulting firm CGI for much of the work on the exchanges and the federal data hub. CGI has their plate full since they are not only working on the federal exchange but also doing work for the state exchanges in at least Colorado, Vermont, and Hawaii.

Earlier this month, the Senate Finance Committee held an oversight hearing. The Obama guy in charge of exchange development testified before them. I thought it was notable that it was the Democrats who expressed the greatest concern, and frustration, over senators not getting a clear idea for just where the administration is toward the goal of launching the new health insurance exchanges on October 1.

I thought the following Reuters quote was telling;

I am absolutely confident that every state will have an exchange that will be functioning and ready, said Gary Cohen [HHS executive in charge of the effort], who declined to elaborate on the number and identity of states that could be in for difficulties."

He wouldn't elaborate on just where there might be problems? Why? Why does the administration have to be so secretive?

This lack of transparency has the health insurance industry––the people the feds are going to have to connect with––very worried.

In early February, information technology consultant Edifecs, which provides health care software services to health plans, hospitals, and other organizations, held a "Compliance Summit" for 125 executives from hospitals, clearing houses, state health insurance exchanges, and health plans. The audience included executives from 34 different health plans. I gave the conference's opening keynote speech.

These are the industry executives that the state and federal exchanges are working with day-to-day. So, if you want to get the perspective from those in the trenches with the state and federal health insurance exchanges (HIXs) on whether they'll be ready, this is a pretty good group to ask.

Edifecs did just that using interactive software in the room to get the audience's response to a number of questions.

The input from the marketplace doesn't inspire confidence:
The vast majority of those who attended are planning to participate in the new health insurance exchanges. They are worried that, with the feds and states getting such a late start in detailing requirements and with so little time left, that their own organizations can be ready. They are also worried because the information they are getting from the health insurance exchanges in order to do their share of the work is poor, to very poor. They are not optimistic that the government-run exchanges will be ready on time. Almost all of those surveyed are concerned that the exchanges have not involved them as users in gaining input from the industry––traditionally a very bad sign in system development. And, the executives are very concerned about being able to reconcile billing and eligibility information from the exchanges.From the Edifecs survey:

View the original article here

The Justices Are Not Ready To Bring Marriage Equality To Alabama, And They Want Prop 8 To Go Away

WASHINGTON, DC — There are probably five justices who object to California’s anti-gay Proposition 8 and who would prefer to see it struck down. Justice Kennedy, the conservative viewed as most likely to provide the fifth vote for equality, openly pondered whether Prop 8 violates the Constitution’s ban on gender discrimination. Kennedy at one point admitted uncertainty about whether there is sufficient evidence examining the effect of marriage equality on society, but he then pivoted to note that the nearly 40,000 children raised by gay parents in California suffer “immediate legal injury” because of Prop 8. His vote is not entirely clear, but Kennedy leaned significantly in the direction of justice.

A weak performance by Charles Cooper, the lawyer defending discrimination, probably went a long way to push Kennedy into the pro-equality camp. When Justice Sotomayor asked Cooper to identify a single example outside of marriage where discrimination against gay couples could be “rational,” Cooper responded “I cannot,” prompting Sotomayor to note that Cooper had more or less conceded that gay people meet the definition of a class entitled to heightened protection under the Constitution. Under longstanding precedent, a group which has experienced a a “‘history of purposeful unequal treatment‘ or been subjected to unique disabilities on the basis of stereotyped characteristics not truly indicative of their abilities” enjoys enhanced protection under the Constitution’s Equal Protection Clause.

Similarly, when Cooper argued that same-sex marriages could somehow undermine opposite-sex marriages, Kagan asked him to explain the “cause and effect” behind this point. When Cooper fumbled the question, Kennedy pounced, asking if Cooper was “conceding the point” that same-sex couples are not a threat to other people’s marriages. Cooper was left to meekly assert that it is “impossible for anyone to foresee the future accurately enough to know exactly what those real-world consequences would be.”

Yet the question of whether California’s same-sex couples enjoy the blessings of liberty was rapidly eclipsed by a different, unspoken question — whether gay couples in Alabama also enjoy those rights. Three justices, Roberts, Scalia and Alito asked hostile questions to the attorneys supporting equality and appear very unlikely to vote against Prop 8. Similarly, while Thomas was characteristically silent, no one expects him to break from his past, anti-equality opinions in gay rights cases. Of the remaining five, at least three spent much of the argument grasping for ways to limit the scope of a decision striking down Prop 8.

Sotomayor, at one point, asked pro-equality attorney Ted Olson whether the Court’s decision could be limited to just California. Kennedy worried about the “uncharted waters” facing the Court if it struck down marriage discrimination nationwide. Justice Ginsburg, who famously accused Roe v. Wade of moving “too far, too fast,” alluded to the fact that racial marriage discrimination ended in two stages — first the Court struck down bans on interracial cohabitation, then it struck down bans on interracial marriage. The clear implication was that the Court could be similarly incremental here.

Yet a means of killing Prop 8 without also ordering Alabama to comply with the Constitution escaped the justices. Kennedy was openly dismissive of the Ninth Circuit’s rationale for limiting its decision striking Prop 8 to California. When Solicitor General Don Verrilli called for the Court to upgrade civil union states into full marriage equality states but leave the Alabama question for another day, most of the bench was skeptical. Ginsburg wondered why only states that have made significant progress towards equality are required to go all in. Kagan questioned how the facts supporting marriage discrimination could be different in another state. When Justice Breyer asked Verrilli which arguments could possibly support marriage equality in California but not Alabama, Verrilli was only able to respond “caution.”

By the end of the argument, a majority of the Court seemed to believe that they shouldn’t even be hearing this case in the first place. At least five justices — Roberts, Ginsburg, Breyer, Sotomayor and Kagan — at one point asked skeptical questions about whether the Court has jurisdiction to hear this case, a result that would potentially raise difficult legal questions about whether Prop 8 is still the law in California or not. Justice Kennedy repeatedly asked about another possibility — the Court could dismiss the case as “improvidently granted” — essentially reversing the Court’s prior decision to hear the case and leaving the Ninth Circuit’s decision to strike Prop 8 in effect. Sotomayor asked Cooper “[i]f the issue is letting the States experiment and letting the society have more time to figure out its direction, why is taking a case now the answer?”

In other words, the most likely answer to the question of whether Prop 8 is unconstitutional is that the Supreme Court will not answer this question at all. Too many of the five justices who appeared open to marriage equality posed too many questions about whether now is the time to bring equality to the nation as a whole, and they did not appear satisfied with any of the theories offered to limit their decision to just some of the states.

View the original article here

Get Ready for Huge Drug Cost Gap in Obamacare

Cancer patients could face high costs for medications under President Barack Obama's health care law, industry analysts and advocates warn.

Where you live could make a huge difference in what you'll pay.

To try to keep premiums low, some states are allowing insurers to charge patients a hefty share of the cost for expensive medications used to treat cancer, multiple sclerosis, rheumatoid arthritis and other life-altering chronic diseases.

Such "specialty drugs" can cost thousands of dollars a month, and in California, patients would pay up to 30 percent of the cost. For one widely used cancer drug, Gleevec, the patient could pay more than $2,000 for a month's supply, says the Leukemia & Lymphoma Society.

New York is taking a different approach, setting flat dollar copayments for medications. The highest is $70, and it would apply to specialty drugs as well.

Critics fear most states will follow California's lead, and that could defeat the purpose of Obama's overhaul, because some of the sickest patients may be unable to afford their prescriptions.

"It's important that the benefit design not discriminate against people with chronic illness, and high copays do that," said Dan Mendelson, president of Avalere Health, a data analysis firm catering to the health care industry and government.

Avalere's research shows that 1 in 4 cancer patients walks away from the pharmacy counter empty-handed when facing a copay of $500 or more for a newly prescribed drug.

"You have to worry about a world where if you happen to contract cancer or multiple sclerosis, you are stuck with a really big bill," Mendelson said. "It's going to be very important for states to take a long, hard look at their benefit design."

Although the money for covering uninsured Americans is coming from Washington, the heath care law gives states broad leeway to tailor benefits, and the local approach can also allow disparities to emerge.

A spokesman for Covered California said state officials are trying to balance between two conflicting priorities: comprehensive coverage and affordable premiums.

"We are trying to keep the insurance affordable across the board," said Dana Howard, the group's spokesman. "This is just part of trying to manage the overall risk of the pool." Covered California is one of the new state marketplaces where people who don't get coverage on the job will be able to shop for private insurance starting this fall. Coverage takes effect Jan. 1.

Insurers are forecasting double-digit premium increases for individual policies, as people with health problems flock to buy coverage previously denied them. The Obama administration says the industry warnings are overblown, and that for many consumers, premium increases will be offset by tax credits to help buy insurance. And officials say it's important to realize that the law sets overall limits on patients' liability, even if those seem high to some people. Still, a full picture of costs and benefits isn't likely to come into focus until the fall.

Howard said California officials are aware of the concerns about drug costs and are trying to make medications more affordable.

Meanwhile, he said consumers will be protected because the law limits total out-of-pocket costs—the deductibles and copayments that policy holders are responsible for, apart from monthly premiums. In California, the annual out-of-pocket limit for an individual is $6,400, although it can be as low as $2,250 for low-income people. Once that limit is reached, insurance pays 100 percent.

That's still a lot of money, and such reassurances haven't dispelled the concerns.

"The intent of the Affordable Care Act is to make sure that all Americans have access to quality, affordable health care," said Brian Rosen, a senior vice president of the Leukemia & Lymphoma Society. He adds that there is a danger that the insurance marketplaces "will discriminate against the patients with the highest medical need. That would completely undermine the spirit of the ACA."

The group has been joined by Rep. Doris Matsui, D-Calif., in urging state officials to reconsider the policy. The high copays "could prevent many patients from receiving the lifesaving treatments they need because of prohibitively high cost," Matsui wrote to the state.

The problem with costly drugs is similar to another money issue with the health care law—a provision that could price millions of smokers out of coverage. Insurers are allowed to charge tobacco users buying an individual policy up to 50 percent higher premiums. For a 55-year-old smoker, the penalty could reach nearly $4,250 a year, on top of the standard premium. California is trying to override that problem by passing its own law. There's also pending state legislation to address some issues with prescription costs, but its prospects are unclear.

Meanwhile, leukemia patient Lisa Lusk worries about what will happen to her. A nursing assistant who lives near Fresno, Lusk is hoping to return to work in the next few months. When that happens, she expects to lose emergency coverage she's now getting through the state. And the medication Lusk takes to manage her chronic form of the disease costs more than $5,000 a month.

"I'm scared that when I get a job my copay may be more than $1,500 a month," said Lusk. "I'll just be working to pay for my medications."

_ By The Associated Press

View the original article here

Royalty Pharma says ready to move quickly on Elan offer

March 6 (Reuters) - U.S. investment firm Royalty Pharma

stood by its offer on Wednesday to acquire Irish drugmaker Elan , which has rejected the approach, saying it was ready to move quickly and that it could complete due diligence in 20 days.

It also said it was meeting with Elan shareholders.

Royalty Pharma made a $6.6 billion approach last week after Elan announced last month a $3.2 billion plan to sell its 50 percent stake in multiple sclerosis drug Tysabri to its U.S. partner Biogen Idec .

Elan rejected Royalty Pharma and on Monday sweetened its offer to shareholders, saying that it would give them 20 percent of future royalties from the drug. It had already planned to return $1 billion to shareholders after the drug sale.

(Reporting By Caroline Humer; Editing by Maureen Bavdek)

((caroline.humer@thomsonreuters.com)(+1 646 223 6181)(Reuters Messaging: caroline.humer.reuters.com@reuters.net))

Keywords: ROYALTYPHARMA ELAN/

View the original article here

UPDATE 5-Royalty Pharma says ready to move quickly on Elan offer

* Royalty Pharma hopes to meet with Elan shareholder J&J

* Royalty Pharma first approached Elan last year

(Adds Elan shareholder comments)

By Jessica Toonkel March 6 (Reuters) - U.S. investment firm Royalty Pharma

on Wednesday stood by its offer to acquire Irish drugmaker Elan , which has rejected the approach, and said it was ready to move quickly and could complete due diligence within 20 days.

The firm is scheduling meetings with 10 to 15 of Elan's largest shareholders, including Johnson & Johnson , as well as a few smaller investors, over the next several days, Pablo Legorreta, chief executive of Royalty Pharma, told Reuters. The firm is meeting with nearly a dozen shareholders this week alone, with the first talks taking place on Wednesday.

"We are very confident that our offer gives Elan shareholders a very attractive alternative," Legorreta said. "We really need access to the books to do due diligence."

Royalty Pharma made a $6.6 billion approach last week after Elan announced last month a $3.2 billion plan to sell its 50 percent stake in multiple sclerosis drug Tysabri to its U.S. partner, Biogen Idec .

Elan rejected Royalty Pharma and on Monday sweetened its offer to its shareholders, saying it would give them 20 percent of future royalties from Tysabri. It had already planned to return $1 billion to shareholders after the drug sale.

"The 'proposal' by Royalty Pharma remains an indication of interest, is highly conditional, and may or may not lead to an offer being made for the entire issued share capital of the company," Elan said in a written statement on Wednesday. "The highly conditional indication of interest is opportunistic in its timing."

Royalty criticized Elan for not taking its bid to Elan shareholders. It also criticized Elan's sweetened offer to shareholders.

Given the competitive M&A landscape in the sector, Elan's lack of experience in making acquisitions, and the fact that without existing products there are no synergies for Elan to realize through acquisitions, Royalty Pharma believes Elan will have a tough time growing on its own, Legorreta said.

"There are companies that have been doing this for a longer period of time," he said. "When you look at what is required to be successful in that kind of strategy, having an infrastructure, having product and having a sales force is important, and Elan lacks that," he said.

Royalty Pharma is confident that shareholders, some of whom have reached out to the company, will be in favor of its proposal.

When Royalty Pharma contacted Elan shareholder Matt Strobeck a few days ago, he told them he would tender at "a modest premium" to Royalty Pharma's $11-a-share offer, Strobeck told Reuters.

Strobeck, a former partner at Boston-based Westfield Capital Management Co, which in 2009 owned 18.8 million Elan shares, sold most of his personal stake in Elan over the past few years but still owns some shares in custodian accounts. Strobeck declined to say how many Elan shares he sold or still owns.

"In the end, they sold the rights to their most important asset and now it is truly like a royalty company in and of itself," Strobeck told Reuters.

"In most companies I own there is no way I would tender unless the premium was significantly higher, but in this case I would take a modest premium to $11 bucks since I view the potential for future value destruction as significant."

Legorreta declined to say if J&J, which owns 18 percent of Elan, is in favor of the deal or to identify the other Elan shareholders meeting with Royalty Pharma.

Fidelity Management & Research is the second-biggest shareholder in Elan with 13.79 percent, according to Thomson Reuters. Invesco Asset Management is the third-largest with 8.7 percent.

J&J, Fidelity and Invesco declined to comment.

Royalty Pharma has been talking to Elan about a possible deal since last autumn, Legorreta said.

Royalty Pharma questioned whether Elan would have any value at all after the Biogen deal is completed. It also said that as the world's largest buyer of pharmaceutical royalty revenue streams, Royalty Pharma may be the only buyer for Elan.

Earlier this week, Elan Chief Executive Kelly Martin told Reuters that his company did not view Royalty Pharma's offer as credible and said the majority of its investors did not believe the bid was worthy of a discussion period. He also said he expected the Tysabri deal to close in a month or two.

Elan shares were down 15 cents to $11.72 in midday trading on the New York Stock Exchange.

(Additional reporting by Padraic Halpin in Dublin; Editing by Maureen Bavdek and John Wallace)

((caroline.humer@thomsonreuters.com)(+1 646 223 6181)(Reuters Messaging: caroline.humer.reuters.com@reuters.net))

Keywords: ROYALTYPHARMA ELAN/

View the original article here

UPDATE 3-Royalty Pharma says ready to move quickly on Elan offer

* Royalty Pharma to meet with Elan shareholder J&J

* Royalty Pharma first approached Elan last year

(Adds Elan statement, Fidelity declining to comment)

By Caroline Humer and Jessica Toonkel March 6 (Reuters) - U.S. investment firm Royalty Pharma

on Wednesday stood by its offer to acquire Irish drugmaker Elan , which has rejected the approach, and said it was ready to move quickly and could complete due diligence within 20 days.

The firm is scheduling meetings with 10 to 15 of Elan's largest shareholders, including Johnson & Johnson , as well as a few smaller investors, over the next several days, Pablo Legorreta, chief executive of Royalty Pharma, told Reuters.

"We are very confident that our offer gives Elan shareholders a very attractive alternative," Legorreta said. "We really need access to the books to do due diligence."

Royalty Pharma made a $6.6 billion approach last week after Elan announced last month a $3.2 billion plan to sell its 50 percent stake in multiple sclerosis drug Tysabri to its U.S. partner, Biogen Idec .

Elan rejected Royalty Pharma and on Monday sweetened its offer to its shareholders, saying it would give them 20 percent of future royalties from Tysabri. It had already planned to return $1 billion to shareholders after the drug sale.

"The 'proposal' by Royalty Pharma remains an indication of interest, is highly conditional, and may or may not lead to an offer being made for the entire issued share capital of the company," Elan said in a written statement on Wednesday. "The highly conditional indication of interest is opportunistic in its timing."

Despite Elan's rejection, Royalty criticized Elan for not taking its bid to Elan shareholders. It also criticized Elan's sweetened offer to shareholders.

Given the competitive M&A landscape in the sector, Elan's lack of experience in making acquisitions, and the fact that without existing products there are no synergies for Elan to realize through acquisitions, Royalty Pharma believes Elan will have a tough time growing on its own, Legorreta said.

"There are companies that have been doing this for a longer period of time," he said. "When you look at what is required to be successful in that kind of strategy, having an infrastructure, having product and having a sales force is important, and Elan lacks that."

Royalty Pharma is confident that shareholders, some which have reached out to the company, will be in favor of its proposal.

Legorreta declined to say if J&J, which owns 18 percent of Elan, is in favor of the deal or to identify the other Elan shareholders meeting with Royalty Pharma.

Fidelity Management & Research is the second-biggest shareholder in Elan, with 13.79 percent, according to Thomson Reuters. Invesco Asset Management is the third-largest with 8.7 percent.

J&J, Fidelity and Invesco declined to comment.

Royalty Pharma has been talking to Elan about a possible deal since last fall, Legorreta said.

Royalty Pharma questioned whether Elan would have any value at all after the Biogen deal is completed. It also said that as the world's largest buyer of pharmaceutical royalty revenue streams, Royalty Pharma may be the only buyer for Elan.

Earlier this week, Elan Chief Executive Kelly Martin told Reuters that his company did not view Royalty Pharma's offer as credible and said the majority of its investors did not believe the bid was worthy of a discussion period. He also said he expects the Tysabri deal to close in a month or two.

Elan shares were up 1 cent at $11.88 in early trading on the New York Stock Exchange.

(Reporting By Caroline Humer; Additional reporting by Padraic Halpin in Dublin; Editing by Maureen Bavdek and John Wallace)

((caroline.humer@thomsonreuters.com)(+1 646 223 6181)(Reuters Messaging: caroline.humer.reuters.com@reuters.net))

Keywords: ROYALTYPHARMA ELAN/

View the original article here

Is the CBO Skeptical that ObamaCare's Insurance Exchanges Will Be Ready on Time?

In theory, ObamaCare's health exchanges will be up and running, enrolling new people before the end of the year. Fewer than half the states will be running their own exchanges, and so the Department of Health and Human Services has stepped in to run the rest. In recent months, however, a number of health policy observers have openly questioned the ability of the federal government to get ObamaCare's health insurance exchanges up and running by the end of the year. That might explain why HHS has been so willing to waive and extend exchange creation deadlines for state.

HHS insists that the federally run exchanges will be online on time, but it has also continued to delay state implementation deadlines in a way that could suggest the agency is not quite as ready as it claims to be. That makes the following passage from the new federal budget baseline published by the Congressional Budget Office this afternoon rather, well, interesting:

CBO and JCT [Joint Committee on Taxation] have slightly reduced their estimates of the rates at which people will enroll in the insurance exchanges or Medicaid as the expansion of coverage is implemented—a process that had already been anticipated to occur gradually. That change reflects the agencies’ judgment about a combination of factors, including the readiness of exchanges to provide a broad array of new insurance options, the ability of state Medicaid programs to absorb new beneficiaries, and people’s responses to the availability of the new coverage.

So is the CBO skeptical that the federal exchanges will be ready on time? That certainly seems possible, although the report does not specify whether it's uncertain about the readiness of federal exchanges as opposed to state exchanges, nor does it clearly indicate what its readiness concerns are.

HHS Secretary Kathleen Sebelius seems a bit concerned about the pace of implementation herself. At a health policy conference in Washington, D.C., yesterday, she declared ObamaCare the law of the land and asked for help making it work: "My challenge to all of you today, and actually my plea to all of you...is help us speed up the rate of change.”

View the original article here

Rep. Himes ready to race fellow Connecticut reps. for new Twitter followers

By Alicia M. Cohn - 01/15/13 09:28 AM ET

Rep. Jim Himes (D-Conn.) is ready to issue a new Twitter challenge to his fellow Connecticut representatives.

Himes commented late Monday that Sen. Chris Murphy (D-Conn.) has finally succeeded in passing Himes's follower count on Twitter, though just barely, with 8,323 compared to 8,315. 

Ok. So @chrismurphyct just passed my follower #. I could mourn, or I could point out he's a friggin' senator now. So w/5 CT districts....

— Jim Himes (@jahimes) January 15, 2013

Himes and Murphy have gotten competitive over Twitter followers in the past, notably last January, when they engaged in a race for new followers, which concluded with Himes giving to the charity of Murphy's choice. 

But since Murphy won his bid for the Connecticut Senate seat last November, Himes is considering leaving him to "his rarefied and stately senatorial realm" and taking on a couple of other Connecticut representatives instead.

Or, I could just start picking on @elizabeth_esty and @repjoecourtneyand leave @chrismurphyct to his rarefied and stately senatorial realm

— Jim Himes (@jahimes) January 15, 2013

So far, Reps. Elizabeth Esty (D) and Joe Courtney (D) have not responded to Himes's challenge. Esty, a new member of the House, has only about 250 followers on Twitter; Courtney has more than 5,000.

View Comments

View the original article here

As 2013 Begins, Get Ready For An ObamaCare Tax Onslaught

 (Photo credit: 401(K) 2012)

The third wave of ObamaCare taxes began on January 1, the latest blitz before the tsunami of changes from the health overhaul law hit in 2014.  These new and higher taxes are being levied to partially pay for ObamaCare’s massive new subsidies for private health insurance and expansion of Medicaid.

The most controversial of the latest ObamaCare taxes is the Medical Device Tax that hits entrepreneurial firms making equipment such as heart valves and hip replacement parts. They face a 2.3% profit on gross sales – a tax they must pay even if they have no profit at all.  Many firms say this tax – slated to collect $29 billion over 10 years – will soak up virtually all of their research budgets.

The medical device industry employs more than 400,000 people in 12,000 factories across the country, often small, entrepreneurial firms with a small product line.  Many say that to survive, they will have no choice but to relocate abroad – taking much-needed, high-tech jobs with them.  These lost jobs will be more casualties of ObamaCare.  And the tax means that medical devices will be more expensive, driving up health cost even further.

A new Surtax on Investment Income impacts individuals making more than $200,000 a year or couples with $250,000 or more.  They must pay a new 3.8% levy on income from investments, possibly including profits from the sale of a home.

A new Medicare Tax adds to ObamaCare’s pain.  These same high-earners must pay an additional .9% Medicare payroll tax on wages above $200,000 for individuals and $250,000 for couples.  This means the current 2.9% Medicare payroll tax will be increased to a total of 3.8% — a big hit especially for the self-employed.

Together, these new Medicare taxes are expected to raise $318 billion to help fund ObamaCare.

The new Flexible Spending Account Tax limits the amount of money that workers can set aside tax-free for medical costs.  ObamaCare sets the cap at $2,500 in order to collect another $13 billion from taxpayers.  (Previously there was no cap; however some employers limited the amount worker could set aside.)

Those who find the accounts most valuable are those with the greatest health needs – parents of special needs children, people who have had organ transplants and who must take maintenance drugs, and others facing major medical expenses.

Beginning January 1, ObamaCare also tightens the screws on Itemized Medical Deductions.   The law raises the threshold for allowed deductions from 7.5% of adjusted gross income to 10%, further burdening those with the largest medical expenses by limiting how much of these costs they can deduct on their taxes.  Hit to these taxpayers:  $19 billion.

Many more taxes are coming, including a “tax penalties” for individuals and businesses who don’t comply with ObamaCare’s mandate that they purchase government-approved health insurance.  The Congressional Budget Office expects these penalties for non-compliance to bring in $160 billion in the first decade they are in effect.

ObamaCare’s $1 trillion in total tax increase hit everything from health insurers, drug companies, and tanning salons to Health Saving Accounts and – eventually – high-cost employer-based health insurance.

All of this will prove that the more people learn about what is actually in the health overhaul law, the more unpopular it will become.

The 2012 elections were not a referendum on ObamaCare:  President Obama avoided talking about everything except the early candy that the law tosses out.  And Gov. Mitt Romney was unable to persecute the law’s most unpopular provisions – the individual and employer mandates, Medicaid expansion, and health insurance Exchanges — because they all are part of the health reform law he passed in Massachusetts.

But the drip-drip-drip of the law’s taxes, mandates, and dislocations will continue, and 2013 likely will see a new attempt to delay, divert, defund, and dismantle the law.

More on Forbes:

View the original article here