First Edition: July 18, 2012

Today's headlines include coverage of a new report that offers a gloomy fiscal forecast for states as they confront rising health care costs, underfunded pensions and a range of other economic challenges.

Kaiser Health News: Businesses Will Push Perry To Rethink Medicaid Expansion
Kaiser Health News staff writer Jay Hancock reports: "Texas Gov. Rick Perry says he rejects the 'Obamacare power grab' and will block measures expanding health insurance to millions in his state. The country's second-biggest health insurer is betting he won't succeed" (Hancock, 7/18). Read the story.

Kaiser Health News: Once Focus Of Health Law, Some In Poverty May Be Left Out
Kaiser Health News staff writers Jenny Gold and Jordan Rau report: "Republican leaders in some states, including Mississippi, are warning that opting into the expansion is too expensive since the states eventually will have to pay10 percent of the cost for the new program participants. Nationally, 17.8 million Americans without insurance earn at or below the federal poverty level, which this year is $11,170 for an individual and $23,050 for a family of four. In Mississippi, 53 percent of the people lacking health coverage fall into this group, a bigger portion than in any other state, according to data from the Urban Institute, a Washington-based think tank" (Gold and Rau, 7/18). Read the story.

Kaiser Health News: Capsules: Higher Payments Are No Cure For Doctor Shortage
Now on Kaiser Health News' blog, Jordan Rau reports: "Medicare should not try to address the shortages of doctors and health care providers in some areas of the country by raising reimbursements to lure practitioners there, the Institute of Medicine recommended Tuesday" (Rau, 7/17). Check out what else is on the blog.

NPR: Could The Health Law End Up Back In Court? Opponents Think So
If you thought last month's Supreme Court ruling upholding the Affordable Care Act was the final word on the legality of the health law, think again. Some conservative scholars believe they may have discovered a flaw that could send the law back to court, or at least cause some big problems for its implementation (Rovner, 7/18).

The Associated Press/Washington Post: Judge Rejects Lawsuit Filed By 7 States Challenging Contraception Coverage Rule In Health Law
Seven attorneys general trying to block the federal health care law's requirement for contraception coverage saw their lawsuit dismissed Tuesday by a federal judge who said they didn't have standing to file it (7/17).

Politico: House GOP Unveils Death By 1,000 Cuts
Next up in the summer "Obamacare" reruns: more votes to defund the law. A week after the House voted to repeal the law completely, the House Appropriations Committee released a Labor-HHS spending bill for next year that would block the use of any of its funds to "implement, administer, enforce or further" the provisions of the Affordable Care Act (Cheney, 7/17).

Politico: Obama: Health Care Mandate Is A 'Principle'
In the ongoing debate over whether the Affordable Care Act's mandate is a tax or a penalty, President Obama tried a different approach -; calling it a "principle." "It's less a tax or a penalty than it is a principle -; which is you can't be a freeloader on other folks when it comes to your health care, if you can afford it," Obama said in an interview with Toledo's WTOL. The White House has struggled with how to respond to charges that the Affordable Care Act -; deemed constitutional by the Supreme Court last month under Congress' taxation power -; raises taxes (Tau, 7/17).

The Associated Press/Washington Post: States Could Leave Millions Of Low-Income People Uninsured In A new Medicaid 'Doughnut Hole'
The Supreme Court's recent ruling gave governors new flexibility to reject what some Republicans deride as "Obamacare." But there's a downside, too. States that reject the law's Medicaid expansion risk leaving behind many of their low-income uninsured residents in a coverage gap already being called the new "doughnut hole" -; a reference to a Medicare gap faced by seniors (7/18).

The New York Times: Texas Counties Fear Residents Will Pay The Price Of Perry's Medicaid Rebuff
Gov. Rick Perry's decision on July 9 to refuse two key provisions of the federal health care law -; the expansion of Medicaid and the creation of a state insurance exchange -; is already being fiercely debated by lawmakers in Austin. But the real impact of the move will be felt far from the Texas Capitol, in the chambers of the commissioners who oversee the state's counties (Fernandez, 7/17).

The Washington Post: Coalition Urges Tax Hikes, Entitlement Cuts To Tame National Debt
A coalition of business leaders, budget experts and former politicians launched a $25 million campaign Tuesday to build political support for a far-reaching plan to raise taxes, cut popular retirement programs and tame the national debt. With anxiety rising over a major budget mess looming in January, the campaign -; dubbed "Fix the Debt" -; is founded on the notion that the moment is finally at hand when policymakers will be forced to compromise on an ambitious debt-reduction strategy (Montgomery, 7/17).

The Wall Street Journal: Widespread Drugs Fraud Is Alleged
Federal prosecutors in Manhattan said the people involved in the alleged scheme obtained the drugs from low-income and other Medicaid recipients-;who would get them at a steep discount or for free-;and then resold the drugs through a network of corrupt wholesale distribution companies (Bray, 7/17).

The Associated Press/Washington Post: Authorities In NY Charge 48 People In Massive Medicaid Fraud Case Costing Millions Of Dollars
A nationwide prescription drug ring bought mountains of HIV medications and other drugs from down-and-out Medicaid recipients in New York City, then marketed the pills to pharmacies that dispensed them to unsuspecting consumers, authorities said Tuesday (7/17).

The New York Times: Gloomy Forecast For States, Even If Economy Rebounds
The fiscal crisis for states will persist long after the economy rebounds as they confront rising health care costs, underfunded pensions, ignored infrastructure needs, eroding revenues and expected federal budget cuts, according to a report issued here Tuesday by a task force of respected budget experts (Williams Walsh and Cooper, 7/17).

The Wall Street Journal: Report Details Threats To States' Fiscal Health
Rising Medicaid costs and pension expenses for public employees threaten states' abilities to provide basic government services as they continue struggling with unreliable tax bases in a weak economy, according to a task-force report. The report by the State Budget Crisis Task Force, which is co-chaired by Paul Volcker, a former Federal Reserve chairman, and Richard Ravitch, a one-time lieutenant governor of New York, says states' growing gaps between entitlement spending and available revenue are becoming unsustainable (Corkery, 7/17).

The Associated Press/Wall Street Journal: Report: US States' Financial Woes Eroding Services
U.S. states face long-term budget burdens that are already limiting their ability to pay for basic services such as law enforcement, local schools and transportation, a report released Tuesday said. Aging populations and rising health care costs are inflating Medicaid and pension expenses. At the same time, revenue from sales and gas taxes is shrinking. And grants from the federal government, which provide about a third of state revenue, are likely to shrink, the report said (7/17).

NPR: Little Regulation Poses Problems Tracking Tissue
In the United States, almost 1.5 million medical products are used each year for surgeries made with tissue taken from cadavers. For tissue to be safe, the donor must be carefully screened. Was she a drug user? Did he have HIV? Those would rule out using that tissue. Then the tissue has to be taken from the body under sterile conditions, processed in a precise way to prevent contamination but not weaken the tissue, then stored at exact temperatures and thrown out when it reaches an expiration date (Shapiro and Bartlett, 7/18).

USA Today: Supplement Industry Boosts Romney Campaign By $4.5M
Overall, individuals and companies with ties to the nutritional and dietary supplement industry have poured more than $4.5 million into campaign accounts benefiting Romney's presidential ambitions, federal records show. The spending comes as the industry is at odds with the Food and Drug Administration over proposed rules that would govern the use of new dietary ingredients. Unlike the pharmaceutical industry, supplement makers long have been exempted from federal review of their products for safety or effectiveness before being marketed (Schouten, 7/17).

The Washington Post: Cuccinelli: Va. Should Opt Out Of Medicaid
Attorney General Ken Cuccinelli wants Virginia to opt of the new federal health law's Medicaid expansion (Kumar, 7/17).