Merger mania: Aetna bids for Humana; Cigna may want it too; Anthem has bid for Cigna; UnitedHealth makes a play for Aetna

Aetna Inc. has made a bid to buy Louisville-based Humana Inc.,"one of a number of recent moves by big health insurers to find merger partners," Dana Mattioli and Liz Hoffman report for The Wall Street Journal.

The proposal was made in "the last few days," the Journal reports. "It isn’t clear how much Aetna indicated it would pay. Humana has a market value of $30 billion. The company hired Goldman Sachs Group Inc. to help it field takeover interest, people familiar with the matter have said."

Meanwhile, Aetna has been approached by another big insurer, UnitedHealth Group. "It isn’t clear what, if any, Aetna’s response was," the Journal reports. "News of the Aetna proposal comes the same day Anthem Inc., another of the five big managed-care companies, said it boosted its takeover offer for Cigna Corp.,"offering $47.5 billion. "Anthem went public with the bid after the two sides failed to reach agreement, and is seeking to put pressure on Cigna through Cigna shareholders."

"Cigna itself is eyeing Humana, people familiar with the matter have said. The five big managed-care companies are jockeying for deals that will enable them to get more efficient and better respond to changes in the health care landscape in the U.S.," the Journal reports.

"Humana, which has an estimated 12,000 employees and roughly 2,000 contractors in Louisville and the immediate region, has been seen as an attractive target in the health-insurance industry because of its well-run business running Medicare Advantage programs," Grace Schneider reports for The Courier-Journal. The company is valued at $30 billion.

"The company's membership rolls have surged to more than 3 million in the last year," Schneider writes. "That growth comes when health care reform has forced providers — hospitals, doctors, pharmacies, among them — to consolidate to increase their leverage and clout in an increasingly competitive health care segment. For the same reason, health insurers are now looking to consolidate."

Fate of rural hospitals rests in the hands of community members, writes publisher of weekly Crittenden Press in Marion

Just like country grocery stores in rural areas often have to close because community members drive past them to chain stores to save a few cents, rural hospitals will also suffer and eventually disappear if citizens do not use them, Publisher Chris Evans writes for The Crittenden Press in Marion.

When Evans was growing up in northwest Tennessee, his grandparents had to close their grocery store, which had been the center of the community, because too many people chose to purchase their food and other items from the new Walmart eight miles down the road. "Our rural hospitals are headed down the same path of extinction unless we recognize and reverse the trend," Evans writes.

Charlie Hunt, volunteer chairman of Crittenden Health Systems, which owns the local hospital, told Evans, "The only way for rural hospitals to survive is through community support."

In Kentucky, one-quarter of the 66 rural hospitals are in danger of closing, according to state Auditor Adam Edelen. In general, "Country hospitals do not have a good record for making money or breaking even, for that matter," Evans writes in a front-page column for the weekly he and his wife own.

Based on the results of Obamacare, Evans opines, it appears that America is moving toward a single-payer health care system like Canada's. Then instead of the government paying for 85 percent of Crittenden Hospital's services, it will pay for 100 percent. "When that happens, hospitals will have to play solely by government rules or get completely out of the game," Evans writes. Most of the 50 rural hospitals that have been shuttered in the past few years have been in the rural South.

"Hunt, who chairs the board, said that approximately 10 percent of the future of this hospital rests in the hands of its leaders. The other 90 percent falls squarely on the shoulders of this community," Evans writes. The column is not online, but PDFs of the pages on which it appears are posted here.

Humana plan members can join Weight Watchers free for six months, get 'a significant discount thereafter,' companies say

Humana Inc. and Weight Watchers International Inc. are teaming up to help employers attack the rising level of obesity and its health-related impacts.

Employees in Humana-managed, employer-sponsored health plans now have free and discounted access to Weight Watchers through an integrated wellness program built into their health plan, the first program of its kind, the two companies said in a news release.

Plan members who want to lose weight can join Weight Watchers free for six months, "and at a significant discount thereafter," the release said. "Weight Watchers helps people adopt a healthier lifestyle that results in achieving and learning to maintain a healthy weight."

Remke Markets, a family-owned grocer with 12 locations in Kentucky and Ohio, is offering the program to its 900 employees.

“What I like about this program is that it actively connects people who want to get to a healthy weight with a trusted, well-known and effective program, and then helps make it affordable,” President Matthew Remke said. “The health risk that extra weight poses for our associates and their families is reason enough to want to attack the problem, but there are also serious consequences of an unhealthy workforce for an employer trying to compete in a tough marketplace.”

Statewide smoking ban passes Kentucky's Democratic House, but its chances don't look good in the Republican Senate

By Melissa Patrick
Kentucky Health News

FRANKFORT, Ky. – A statewide smoking ban passed the Democrat-controlled state House Friday for the first time, but its chances appear grim in the Republican-controlled Senate though a clear majority of Kentuckians support the bill.

House Bill 145, which would prohibit smoking in workplaces and indoor places, passed 51-46 after the narrow defeat of two amendments opposed by its advocates and three changes that may have put it over the top. Nine of the 44 Republicans joined 42 of the 56 Democrats to pass it.

Amendments to the bill added exemptions for cigar bars, cigar clubs, tobacco stores, private clubs and market-research facilities; significantly reduced the fine for violation, to $25 for individuals and $50 for businesses; and would preserve any weaker or stronger local bans that are in effect when the bill would become law, in late June.

House Speaker Greg Stumbo told Tom Loftus of The Courier-Journal that the latter amendment was key to the bill's passage. Rep. Tanya Pullin, D-Greenup, told the House that it won her vote because it creates a "window of opportunity" for localities to enact their own bans. It was proposed by Democratic Caucus Chair Johnny Bell of Glasgow.

The defeated amendments would have exempted electronic cigarettes and well-ventilated adult establishments prominently displaying a "Smoking Establishment" sign. The e-cig amendment, proposed by Republican Caucus Chair Stan Lee, lost 46-49; the other one, offered by freshman Rep. Jim DuPlessis, R-Elizabethtown, lost 44-45. For the roll calls, click here.

"A couple of the amendments are problematic," Amy Barkley, chair of the Smoke-free Kentucky Coalition, said in a phone interview. "The existing laws in these communities may not protect all workers," she said. "And localities can pass weak laws (before this bill becomes law) and have that forever."

Nevertheless, Barkley said, "This is really a historic moment."

More compromise may be necessary to get the bill through the Senate, where Republican Sen. Julie Raque Adams of Louisville filed a similar bill as the House measure was coming up for a vote.

Senate President Robert Stivers told Bruce Schreiner of The Associated Press, "I am personally not a fan of smoking, but I just don't believe it is the government's role to tell [a business] that you cannot have a facility that smoking takes place in — be it a pool hall a bar or restaurant." He added, "I don't see there being that type of support in the Senate to pass a bill like that."

Barkley disagrees. "There is a lot of support in the Senate," she said.

The sponsor of HB 145, Rep. Susan Westrom, D-Lexington, said "I cannot predict what will happen in the Senate. Stivers has said from the beginning that he wouldn't let it have a hearing."

Barkley said advocates are asking Senate leaders to "let your members have the vote and go on record with their position." The next clue to the leaders' attitude will be where they send the bill. If it doesn't go to the Health and Welfare Committee, which Adams chairs, that would be a bad sign for it.

Westrom repeately said that the bill does not ban smoking. "This bill just requests that a smoker step outside 15 feet," she said. "Fifteen feet is not too far to walk to know that 950 people in this state won't die from secondhand smoke related illness." That is the estimated number of deaths each year in Kentucky from secondhand smoke.

Westrom said afterward that she had hoped for a larger margin than five votes, but "I couldn't be happier. This is a historic moment and there is lots to be proud of," referring to the many people and organizations that committed themselves to the cause.

The Kentucky Health Issues Poll last fall found that 66 percent of Kentucky adults favored the ban. It won 57 percent support in last year's Bluegrass Poll for news organizations.

During the House debate, opponents of the bill spoke mainly of private-property rights and individual liberty.

I deplore smoking," said Rep. Brian Linder, R-Dry Ridge, "but my love for liberty is greater than my hate, therefore I vote no."

Earlier, Westrom said, "Our freedoms only extend until they begin to affect others."

Democratic Gov. Steve Beshear hailed the House vote as "an extremely important and significant event," adding, "It sends a very strong statement ... that it is time to move in this direction. It is just such a health problem and health issue in the commonwealth; so many of our chronic conditions relate directly back to smoking."

Reform law's backers say it boosts economy by freeing 'job lock;' foes cite estimate that it will make some drop out of job market

As the Patient Protection and Affordable Care Act's second enrollment period gets underway, supporters of the law say it boosts the economy by creating an affordable, accessible insurance market that's not dependent on employer-based insurance.

Travis Kalanick, co-founder of Uber, said the law has been "huge" for his personal-transportation business. Uber's drivers are independent contractors, so the company does not provide them with health insurance. But because the ACA creates a functioning individual market for health insurance, making it easier and more affordable for Uber drivers and others to buy coverage on their own, Americans don't have to stay in a job just to keep their health insurance.

"The democratization of those types of benefits allow people to have more flexible ways to make a living,” Kalanick said during dinner for reporters, according to Buzzfeed. “They don’t have to be working for The Man.”

This is why Uber loves Obamacare, reports Jason Millman of The Washington Post. For a company like Uber, it's about liberalizing the workforce so that people are able to take jobs they do like that don't provide health care, he writes.

Numerous sources cite the ability of individuals to obtain affordable coverage outside of the workplace as a boon to the labor market. A Congressional Budget Office analysis earlier this year said giving families more options for obtaining affordable health insurance outside the workplace, the PPACA removes a barrier to job mobility and boosts the economy.

Before the PPACA, many Americans’ only source of secure health-insurance coverage was through their jobs because without work-based plans, people often found coverage to be too expensive or impossible to obtain due to pre-existing conditions. This created a health-insurance obstacle to labor mobility, which is sometimes called "job lock", writes the Jason Furman in an online post from the White House Council of Economic Advisers.

Job lock can prevent individuals who want to look for a better job, change careers or start a new business from doing so for fear of not having health coverage, the CBO said. Now, because of both the PPACA’s patient protection measures and ban on discrimination against people with pre-existing conditions, Americans have reliable access to health insurance without having to count on employers to provide it, says the report. CBO also said many Americans will be able to start small businesses or take new positions where they can be more productive because they don't have to worry about health insurance.

Opponents of the law argue that it shrinks the labor market. For example, in a Forbes article, Avik Roy writes that the law hampers job growth by imposing one of the largest tax hikes in U.S. history, increasing the cost of employing workers and establishing exchange subsidies that encourage workers to drop out of the job market. They cite a CBO estimated that by 2024, 2.5 million full-time-equivalent workers will drop out of the job market. Jay Carney, then White House press secretary, celebrated the findings, arguing that they mean that Americans would no longer be “trapped in a job,” Roy writes.

Women Leading Kentucky Health: Insurance Commissioner Sharon Clark is key player in making health-reform law work

This is the second in a series, Women Leading Kentucky Health, of stories about four high-ranking female state officials who have guided the state's embrace of the Patient Protection and Affordable Care Act.

By Melissa Patrick
Kentucky Health News

The day after the Patient Protection and Affordable Care Act was signed into law, a reporter called the state Department of Insurance and asked what it all meant. The reply? People in the agency had to read it first – all 2,700 pages of it, Commissioner Sharon P. Clark recalled.

Commissioner Sharon P. Clark

“We hit the ground running on March 24, 2010 and have continued since then,” Clark said in an interview. “It has been a lot of strain on the resources here and people’s time just to get a grasp of it. I am not exaggerating when I say there have been thousands of hours involved with it.”

Clark’s department is not in the Cabinet for Health and Family Services, but she is chair of the 19-member advisory board for Kynect, the brand the state uses for the health-insurance exchange Gov. Steve Beshear created under the law.

That strategic appointment was made by Cabinet Secretary Audrey Haynes, who said she realized early on how important it was to have the Insurance Department “at the table.” Haynes said the committee has had a “united front” since the beginning.

Clark attributes the success of Kynect, which has enrolled 521,000 people in health coverage, to collaboration and communication. “Everybody has just had to roll up our sleeves,” she said. “It has been the governor’s expectation that we work together and we get the job done. I don’t think any of us ever had any hesitancy with it.”

Clark, who was the Insurance Department’s director of consumer protection and education from 1998 to 2003, has seen the disruption and disasters that can happen to people without health insurance.

“I can’t tell you how much financial devastation there has been for people that did not have insurance coverage,” she said. They “have had, due to medical conditions, had to file for bankruptcy. … . I think anything that gives people the opportunity to get insurance has a significant impact on their lives.”

But the reform law and its implementation have been controversial, and Clark said, “The times continue to be challenging.”

One of the early challenges was making sure everyone was on board. Clark said it was important to the committee to make sure all stakeholders, such as hospitals, insurance agents and companies, doctors and the Kentucky Chamber of Commerce, were able to offer input and be involved in the process.

“The first collective voice was that Kentucky needed its own exchange” for people to sign up for health insurance or Medicaid, Clark said. She laughed and said, “I have been involved in government for over 20 years and it is rare that you get everybody saying the same thing.”

A more recent challenge has been President Obama’s decisions to allow states to extend existing health-insurance policies that don’t meet the requirements of the law for two more years, or policy years beginning on or before Oct. 1, 2016. Beshear allowed insurance companies to make such extensions.

Clark said the extensions created confusion in the marketplace. She said it is difficult for insurance companies to make such changes in mid-stream, because policy and technology systems have already been put in place toward compliance with the law.

The department’s major role in the new system is approving insurance companies’ rates, policies and forms. “We must approve the product or there is nothing out there to be sold,” Clark said.

Clark, like Beshear a longtime Democratic Party activist, says insuring Kentuckians will not only improve their health, but to also make a difference in their lives. “Health care is for all of us,” she said. “It is for all of us, society as a whole.”