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WellPoint helps usher in health care reform

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Year In Review

After eight months of grueling debate, health care reform looked stymied in January after the victory of Scott Brown in Massachusetts gave Senate Republicans enough votes to filibuster the bill. But then President Obama revived the bill by seizing on news of sharp premium hikes on individual customers by Indianapolis-based WellPoint Inc.

CEO Angela Braly was dragged before a congressional committee, and Democrats regrouped to push the bill into law. Obama signed it March 23.

WellPoint was later blasted by critics of the law for its ham-handed public and government relations—things that were touted as Braly’s skills when she was named CEO in 2007.

“It’s been a disaster,” said Bob Laszewski, an insurance consultant in Alexandria, Va. “It’s hard to believe retrospectively in her expertise in public policy.”

WellPoint officials said Obama and his administration had “targeted and villainized” the company to rally support for health insurance reform.

The law itself is a mixed bag for WellPoint and its peers. On one hand, the law requires all Americans to have health insurance and will pay more than $40 billion a year in subsidies to help an extra 16 million Americans to buy coverage.

Already, however, WellPoint and its peers face many new regulations on their businesses. They can no longer reject customers because they’re sick and cannot cap customers’ benefits via lifetime maximum provisions.

Also, health insurers must spend at least 80 percent of the premiums they collect—and 85 percent for large-employer accounts—on medical care, potentially limiting their profits.

Lower profits and more complex regulations will lead many smaller insurers to sell to larger ones, and WellPoint executives say they expect to be active in acquisitions in the next few years.

Having an estimated 32 million new Americans with insurance coverage drew support for the law from Indianapolis-based Eli Lilly and Co. and the pharmaceutical industry. But new industry fees, larger Medicaid rebates and other provisions now have analysts expecting it to trim pharma profits.

The law also approved new methods of paying doctors and hospitals, which has accelerated a trend of doctor-hospital mergers.•

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  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

  4. downtown in the same area as O'malia's. 350 E New York. Not sure that another one could survive. I agree a Target is needed d'town. Downtown Philly even had a 3 story Kmart for its downtown residents.

  5. Indy-area residents... most of you have no idea how AMAZING Aurelio's is. South of Chicago was a cool pizza place... but it pales in comparison to the heavenly thin crust Aurelio's pizza. Their deep dish is pretty good too. My waistline is expanding just thinking about this!

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