Blue Cross reaches out over insurance law changes

MORRISVILLE, N.C. — Just down from the Target and Gander Mountain big-box stores and between a nail salon and dental office, North Carolina's largest health insurer opened its first retail store.

It has some exercise offerings — step aerobics classes and stationary bike workouts — but for now, its main product is providing in-person information about changes coming in October with the health insurance overhaul law.

Blue Cross and Blue Shield of North Carolina is opening half a dozen of these offices in strip malls statewide to first educate and then, starting in October, enroll consumers shopping for coverage because of the federal Affordable Care Act, also known as "Obamacare." Blue Cross affiliates in Florida and Pennsylvania have had similar stores open for years.

The North Carolina company also hauls an air-conditioned showroom trailer to fairs and farmers markets to reach out to the estimated 600,000 people who will be newly shopping for individual policies — some of them subsidized by the government for consumers who might have trouble affording a policy. Many of the individual policies will be sold on a statewide Internet marketplace designed to make buying coverage comparable to finding a hotel room or rental car.

North Carolina's Republican General Assembly and governor oppose the law and so the federal government is running the state marketplace where insurers will sell policies.

As people who have been uninsured or had their coverage provided by employers start shopping around, BCBSNC is reaching out like never before to expand on its 375,000 insurance policies for individuals, marketing director Bruce Allen said. The goal is explaining the federal law, which requires everyone to have coverage or pay a fine and subsidizes many middle-class consumers who might otherwise not be able to afford policies on their own. The law also prohibits insurers from rejecting customers who have pre-existing health conditions.

"There's a big segment of the population that really wants to talk to someone face to face about it," Allen said. "It's a new market that's entering that doesn't have health insurance, never had it, and really needs kind of that step-by-step walk-through to understand a really critical decision for them to make."

Across the country, Blue Cross companies are among the health insurers most aggressive in reaching out to build consumer trust and capture their spending on policies. Spots for a broad new print, television and online advertising campaign are multiplying. Meetings with civic organizations community groups, and religious institutions are taking place from Vermont to Texas. The North Carolina company has rented movie theaters and invited guests to watch first-run films, with the addition of a 15-minute ad explaining the Affordable Care Act and laptop-ready staffers in the lobby offering individual guidance on the law.

The Blue Cross and Blue Shield Association, the umbrella organization for the country's 38 Blue Cross companies, launched a campaign last month with the Walgreen Co. drugstore chain, with signs and brochures in about 8,000 stores.

WellPoint, the largest operator of Blue Cross Blue Shield health plans, is teaming up with Spanish-language TV and radio network Univision in California, New York, Colorado and Georgia for meetings, broadcast advertisements, and newscast segments describing what coverage means and how to buy insurance on an online exchange.

Blue Cross Blue Shield companies already are some of the country's biggest sellers of health insurance policies for individuals. Seven Blue Cross companies, including North Carolina's, were among the top 10 at the end of 2011, according to Atlantic Information Services Inc., which specializes in health industry data and news.

"For other insurers, the majority of their experience is in the employer-provided market, so they don't know the individual market as well and are unsure whether this will be profitable, so they're moving very carefully," said David Ridley, director of the health sector management program at Duke University's Fuqua business school. "In contrast, Blue Cross Blue Shield — with their experience in the individual market, its experience interacting with government as the insurer of last resort — is moving much more aggressively and creatively."

Outside the Blue Cross Blue Shield world, Humana Inc. has signaled plans to station representatives in grocery stores and pharmacies in the 14 states where its policies will be sold on online insurance marketplaces. Pittsburgh-based UPMC Health Plan has set up kiosks in six western Pennsylvania malls to reach insurance consumers with questions, and it launched a computer application in an effort to offer a fun way to understand the details of the law and its polices.

Spokesmen for Assurant Health and Aetna described no novel marketing twists tied to the upcoming changes.

Government, too, is ramping up efforts to reach the working poor, young people and others with no health coverage. President Barack Obama's administration and many states are launching campaigns this summer to get the word out. Grassroots organizers are recruiting pastors, barbers and mothers to convey the message. In some neighborhoods, volunteers organized by a coalition of health companies and advocates hand out brochures.

But any company marketing efforts come as most Americans are confused or uninformed about what the new health insurance law means to them. Only about one in five had heard about the health insurance marketplaces as of June, according to a poll by the Kaiser Family Foundation.

"There is a lot of misinformation out there. One of the things that we hear often is that I have to go buy a government plan on the marketplace," Allen said. "We spend a lot of time explaining to people, 'You're going to buy a private insurance plan. There is no government plan.' "

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Associated Press writer Emery Dalesio can be reached at http://twitter.com/emerydalesio.

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City eyes authority on liquor licenses

A Boston city councilor is making a fresh push to wrest control of Boston's liquor licensing process from the Legislature, arguing that giving the city the power to increase the number of licenses issued would help revitalize neighborhoods by reducing costs for prospective restaurateurs.

"This is not about changing Main Street into New Orleans' Bourbon Street," City Councilor Ayanna Pressley said. "One of the critical factors I see for thriving neighborhoods are successful restaurants."

State lawmakers have had control of the number of liquor licenses in the city since the 1930s. Pressley's home rule petition seeking the change is scheduled to be vetted at a public hearing Wednesday.

Pressley also wants to stop licenses being moved from empowerment zones, urban renewal districts and transit-oriented developments.

"The current law is hurting small business," Pressley said. "There's a limited number of licenses, so there's not enough to go around, and they just go to the highest bidders."

Restaurants can sell their licenses for as much as $350,000 for an all-alcohol version — and $500,000 in the Back Bay, where residents oppose adding new licenses.

Boston's 1,030 liquor licenses are given out with wide divergences in neighborhoods. Of 99 North End licenses, 91 are for restaurants and bars while 17 of Roxbury's 26 licenses are for liquor stores.

"There's a disparity issue," Pressley said. "The city should be able to work with neighborhoods and decide how best to allocate them. Clearly, a restaurant cannot be successful without a beer and wine or full alcohol license. Most of your profit margin is not going to come from your food, it's going to come from your bar."

She will face some pushback from the restaurant industry, which is concerned about disruption if more licenses are given out, with a resulting drop in the value of licenses.

"Existing restaurants have based their whole business model ... on an asset with a certain value," said Massachusetts Restaurant Association CEO Bob Luz. "To negate that value now would be unfair to existing businesses."

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Raynham joins group to organize casino worker training

The Massachusetts Casino Careers Training Institute has added Raynham Park to the list of prospective slots parlor and casino operators agreeing to collaborate on workforce development issues with the consortium of community colleges.

As the would-be operators complete license applications to the Massachusetts Gaming Commission, they must identify workforce development resources they'll tap, according to Jeff Hayden, vice president for business and community service at Holyoke Community College, one of the state's 15 community colleges that formed the institute.

"They need to show when they have jobs, how they're going to fill them with local Massachusetts residents," Hayden said.

A slots facility and three casinos in Greater Boston, southeastern Massachusetts and western Massachusetts are expected to create 10,000 jobs.

The basic memorandums of understanding require the proposed operators to supply information about the types of those jobs and needed qualifications and training.

They're expected to be replaced with more detailed, formal agreements once the commission chooses operators.

The institute also has agreements with prospective casino operators MGM Resorts, Mohegan Sun and Hard Rock International, and proposed slots parlor operator Penn National.

The institute signed an agreement with the Gaming Commission in December to work together to create training, certification and licensing plans for workers.

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Biotechs push to save tax credit for rare-disease medicine makers

Some of the Bay State's biggest biotech companies are teaming up with drug makers and patient advocacy groups across the country to wage battle to protect the crucial federal tax credit that provides a key incentive for pharmaceutical companies to develop drugs for "orphan diseases."

The measure, slated for debate as part of upcoming tax reform discussions in Congress, allows pharmaceutical companies to claim a tax credit of 50 percent of research and testing costs for drugs meant for diseases affecting fewer than 200,000 people in the U.S. — such a small market that they would not otherwise be worthwhile for large pharmaceutical companies to target.

Development of the so-called orphan drugs has skyrocketed since the tax credit was approved in 1983, with some of Massachusetts' powerhouse biotechs specializing in the market.

"We believe it provides an important incentive for companies to pursue research into serious diseases that despite affecting a small number of people are often life-threatening and have few available treatments," said Nikki Levy, a spokeswoman for Cambridge-based Vertex Pharmaceuticals, maker of Kalydeco, a drug for people with cystic fibrosis who have a specific genetic mutation.

The cost and limited potential for profit would make such drugs difficult to develop without the tax credit, pharmaceutical companies say.

"The Orphan Drug Tax Credit has been a crucial incentive to those companies as they have made significant breakthroughs in areas such as cystic fibrosis, Parkinson's disease and sickle cell anemia," said Massachusetts Biotechnology Council President and CEO Robert K. Coughlin.

There are roughly 7,000 rare diseases, and around 50 percent of those affected are children.

"We strongly urge you to keep this critical tax credit in place," the National 
Organization for Rare Disorders, which represents a number of health organizations, said in a letter to congressmen who have questioned the credit.

"Repeal of the tax credit would cause irreparable harm to the goal of promoting development of therapies for patients with rare diseases," said Lori Gorski, a spokeswoman for Genzyme, a Cambridge-based company that spent 12 years developing 
Kynamro, which targets an inherited high-cholesterol condition that affects one in a million people.

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Report: Bundesbank sees new Greece bailout in 2014

BERLIN — German news weekly Der Spiegel reports that the country's central bank believes international creditors will have to agree a new bailout for Greece by early next year.

The move would come months after Germany's Sept. 22 general election. Chancellor Angela Merkel's conservative government has been at pains to appear firm on Greece's international bailout, which is unpopular with many Germans.

Der Spiegel reports Sunday that the Bundesbank told Germany's Finance Ministry and the International Monetary Fund that a recent 5.7 billion euros ($7.62 billion) payment to Greece was approved "due to political constraints."

The central bank reportedly also described the risks of the current rescue program for Athens as "unusually high" and the performance of the Greek government as "hardly satisfying."

A Bundesbank spokeswoman declined to comment on the report.

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Retailers keeping tabs on consumers' return habits

WASHINGTON — It's not just the government that might be keeping tabs on you. Many retailers are tracking you, too — or at least your merchandise returns.

The companies say it's all in the name of security and fighting fraud. They want to be able to identify chronic returners or gangs of thieves trying to make off with high-end products that are returned later for store credit.

Consumer advocates are raising transparency issues about the practice of having companies collect information on consumes and create "return profiles" of customers at big-name retailers such as Best Buy, J.C. Penney, Victoria's Secret, Home Depot and Nike.

They say consumers should know upfront when they buy an item that they may later have their returns tracked if they bring back the merchandise.

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Rhode Island lawmakers seek answers on 38 Studios

PROVIDENCE, R.I. — It's taken more than a year, but Rhode Island lawmakers are trying to find out what led up to the state's costly gamble on Curt Schilling's now-defunct video game company, sifting through thousands of documents in hopes of learning how to avoid similar debacles.

The House Oversight Committee began its review last week of some 15,000 pages from emails, letters, meeting records and other documents relating to the state Economic Development Corp.'s $75 million loan guarantee awarded to 38 Studios. The committee is now considering whether to ask key figures involved in the deal to testify — with the option of subpoenaing any individuals who say no.

Questions about the state's involvement in 38 Studios continue to reverberate around the Statehouse about the company's decision to file for bankruptcy, making the state responsible for $90 million in outstanding debt. The EDC is now suing Schilling, former EDC Deputy Director Michael Saul, former EDC Executive Director Keith Stokes and others involved in the deal, alleging they withheld information about 38 Studios' finances from the board and gave it false information.

For lawmakers and other individuals still upset about the bad investment, several questions loom: Did top lawmakers support legislation creating the loan guarantee program knowing 38 Studios would be the largest beneficiary? Did officials at the EDC know that 38 Studios would need additional money to succeed? Did the EDC board, former Gov. Donald Carcieri and top lawmakers do their homework on 38 Studios before pushing for the state's investment?

Lawmakers approved the $125 million loan guarantee program in 2010, but rank-and-file lawmakers have said they weren't told that 38 Studios was involved. Yet documents released as part of the oversight process show clearly that efforts to help 38 Studios were behind the proposed loan guarantee program.

In the minutes from an EDC executive session in June 2010, an EDC attorney briefed the board on the loan guarantee program legislation, which was then pending in the General Assembly. The attorney said, "The legislature is aware of the Schilling matter and has done some due diligence in its consideration of this program," according to the minutes.

In a letter to Neil Steinberg, president of the Rhode Island Foundation, Stokes wrote that 38 Studios was a "catalyst for the $125 million Job Creation Guaranty Program. Without the tangible prospect of a company like this coming to Rhode Island, the opportunity to create the program would likely not have materialized."

The documents led state Rep. Karen MacBeth to accuse legislative leaders of misleading her and other lawmakers.

"We're taking votes based on untruths or lies," said MacBeth, D-Cumberland. "These documents absolutely show without a doubt that the key players here did know about it."

House Speaker Gordon Fox has said he knew of efforts to lure 38 Studios to Rhode Island, but the loan guarantee program was a separate discussion. His spokesman Larry Berman said the EDC — not top lawmakers — was behind efforts to pass the loan guarantee legislation to aid 38 Studios.

"The legislature was aware of the Schilling matter — at least some of the members were," Berman said. "We created the program that would provide the funding, but whether 38 Studios qualified for that funding, that was left up to the EDC."

The oversight committee could invite former executives from 38 Studios or former EDC officials to testify at the committee. But committee chairman Michael Marcello, D-Scituate, said it's unlikely those individuals would want to speak in light of the pending litigation.

"If I were their lawyer, I would tell them not to testify," he said.

The committee could vote subpoena witnesses, but the subpoenas would require Fox's approval.

Sen. Dawson Hodgson, R-North Kingstown, said it's vital that the committee attempt to ask questions of the individuals involved. Hodgson called for a special investigative committee to look into the 38 Studios episode, but his proposal failed in the General Assembly.

"I'm glad we're seeing some kind of serious post-mortem of 38 Studios, but no real oversight will be complete without calling in the principal actors," he said.

Schilling, the former EDC officials and former executives at 38 Studios are seeking to dismiss the EDC's lawsuit. Messages were left with several individuals involved in the deal. Stokes declined to comment, citing the lawsuit.

Critics of the oversight process note that it comes more than a year after 38 Studios filed for bankruptcy. They also question whether the committee will look closely at questions about the General Assembly's own role in passing the loan program that benefited 38 Studios.

"I don't think many people in the state buy the idea that they didn't know," said Randall Rose, who as a member of the group Occupy Providence has called on the state to default on the 38 Studios debt. "This may be an effort to run out the clock."

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Home-mortgage interest deduction may be in danger

WASHINGTON — Since Congress has taken off on its annual summer recess, you might assume that nothing is happening on Capitol Hill that could affect the taxes you pay on your home. Quite the reverse.

Members of Congressional tax-writing committees are putting together legislative drafts that may determine the fate of real estate's most prized tax benefits: first and second home-mortgage interest deductions, property tax write-offs, capital gains exclusions and others.

Committee chairs have promised major tax reform proposals. They've been evaluating deductions, credits and loopholes in terms of revenue costs and economic benefits, including the more than $70 billion yearly expense of the mortgage interest writeoff. The process represents the most serious effort to simplify and reorganize federal tax law since the Tax Reform Act of 1986.

On the Senate side, Finance Committee Chairman Max Baucus (D-Mont.) asked colleagues in both parties to submit recommendations on which tax preferences should be preserved, starting from a "blank slate" where all current benefits are eliminated. To provide senators political cover and deniability, the committee put all recommendations under a 50-year top-secret classification, and restricted access to them to just 10 staff members.

On the House side, Ways and Means Committee Chairman Dave Camp (R-Mich.) instructed staff to move ahead with drafts during the recess, allowing the committee to consider a final tax reform bill in October. That would tee up the legislation for a possible full House floor vote.

So what's really on the chopping block? Is there a possibility that as part of a comprehensive tax reform bill, preferences for home ownership could be reduced or phased out?

Here's a quick overview: The House bill under construction seeks to reduce individual and corporate marginal tax rates across the board. Camp has said he wants to clear out deductions, exclusions and other longtime tax code subsidies enough to lower individual taxes to a top marginal rate of 25 percent, down from the current 39.6 percent. He also wants to eliminate the alternative minimum tax and slash corporate tax rates.

The problem, though, is that lowering tax rates to these levels would cost trillions of dollars in lost revenues over the coming decade and would only be partially paid for by eliminating or cutting the vast majority of current tax preferences, including for homeowners. Lowering the top marginal rate for individuals to 28 percent — instead of the proposed 25 percent — would help, some analysts say, but still might not close the lost-revenue gap.

Another complication: Major tax benefits that have been in existence for decades, such as the mortgage interest and property tax deductions, are so welded into the system that eliminating them, or sharply reducing them, would shock the national economy.

The Tax Foundation, a Washington-based think tank that describes itself as nonpartisan, released a study at the end of July projecting that an elimination of the mortgage interest write-off would cut the gross domestic product (GDP) by $254 billion based on incomes in 2012, and would result in the loss of 659,000 jobs. In a separate study, the Tax Foundation projected that elimination of homeowner property tax deductions would lower GDP by $94 billion and trigger the loss of 216,000 jobs.

Findings such as these lead housing proponents to believe that neither the House nor the Senate bill can afford to make drastic reductions to long-standing homeowner tax benefits.

Other industry analysts aren't so sure. Not only did a panel of prominent economists slam the housing write-offs as inefficient and heavily tilted to benefit higher-income taxpayers, but Camp's own make-or-break income tax cut targets could take precedence over retaining current deductions.

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Lobstermen union meets for 1st time

BANGOR, Maine — Lobstermen who want to form a union to lobby for them in Augusta and to negotiate prices for their catch are meeting for the first time.

Fishermen who are forming the Maine Lobstering Union are gathering Sunday in Bangor at the Ramada Inn. Opening remarks will be open to the public, then the meeting will be closed to begin the process of nominating officers and beginning a process for nominating officers.

The International Association of Machinists and Aerospace Workers has been recruiting fishermen fed up with low prices for their catch and growing expenses.

The Maine Lobstermen's Association, a trade group with about 1,200 members, has questioned whether negotiating lobster prices would run afoul of federal antitrust laws.

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Fallout follows after herring protection rejected

BOSTON — A plan to protect the important Atlantic herring from what many believe is its biggest threat has been shelved indefinitely after years of work devising it — and even after winning support from the very vessels being targeted.

Last month, federal regulators at the National Oceanic and Atmospheric Administration rejected a measure that would have required independent catch observers aboard every trip taken by mid-water trawlers, which can scoop herring out of sea hundreds of thousands of pounds at a time.

Critics believed the observers would find that the vessels dump large amounts of herring and often inadvertently catch and kill critical marine species, such as cod or haddock. But trawler owners said the observers would vindicate them.

The New England Fishery Management Council approved the beefed-up observer coverage in June 2012. But federal regulators disapproved it last month. John Bullard, the Northeast's top federal fishing regulator, said that it amounted to an unfunded mandate and that the council should have known that before it voted.

"We don't have that money," Bullard said. "It's like requiring us to do something that we can't do."

It's a lot of fuss over a fish that's no more than a foot long, sells for about 15 cents a pound and is caught mainly as bait for more coveted species, such as lobster.

In the ecosystem, though, herring are a key prey food for everything from whales to striped bass to seabirds. That leaves a host of groups passionately interested in their good health: recreational fishermen, commercial fishermen, environmentalists and whale-watch boat owners, among others.

NOAA's decision riled a few of them and particularly stung some on the New England council.

Council member Tom Dempsey called it a "slap in the face," and council Chairman Rip Cunningham wrote Bullard on Aug. 1 that the supposed partnership between their agencies was dysfunctional.

"To steal a phrase from P.J. O'Rourke, where we are now is 'like giving car keys and whiskey to teenagers,'" he wrote. "There's gonna be a crash."

Worse, said Steve Weiner, a Maine harpoon tuna fisherman, the trawlers now won't be held accountable, leaving herring and other struggling species vulnerable to them.

"I believe it puts at risk the herring, and all the other fish that are flocking to the herring to eat," he said.

Anecdotal stories abound about the ability of mid-water trawlers — which can be as long as 165 feet — to clear out areas of ocean. But trawler owners say their critics seem impervious to the lack of evidence of their charges.

"I've seen a lot of fish going on boats and off boats and I find their allegations to be, I don't even know the right word. Outlandish. Highly exaggerated," said Mary Beth Tooley, of the O'Hara Corp. in Rockland, Maine.

Tooley, who is also a council member, supported the observer requirement but with payment shared between the industry and NOAA. A target of $325 per day from the industry was set, but the observers cost more than that. Bullard estimated annual costs of about $2.5 million and said even if the industry kicked in the target amount, his agency would be left on the hook for $2 million it doesn't have.

Dempsey said NOAA seemed to lack the will to find a way to enact a clear council priority and the centerpiece of the long-awaited plan, even after the herring industry finally was willing to accept more observers.

Roger Fleming, of the environmental legal group Earthjustice, noted that a team that was supposed to work to find a way to fund observers met just once since the council vote and that NOAA took 13 long months to make its final decision.

"This is fairly absurd, even by government standards," he said.

Bullard rejected the charge that his agency was disengaged. He said that before the June vote the agency repeatedly raised concerns about the lack of funding for added observers, including in four letters over three years. In a letter to Cunningham dated Thursday, Bullard also said his staff often expresses concerns no one likes to hear, and the council often disregards them.

Bullard added that he knows the council is frustrated, but increasing observer coverage for mid-water trawlers isn't a dead issue.

"We're not giving up on this," he said.

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