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5 factors that could sway insurance prices in 2015

Written By Unknown on Selasa, 27 Mei 2014 | 00.33

Customers who bought health insurance on the overhaul's public exchanges can expect a flurry of reports about big price hikes and some decreases for 2015 as insurers finalize their rates over the next few weeks. But they shouldn't give much weight to any of this.

The actual change in a person's policy will depend mostly on factors particular to their market and the other people covered by their plan. Here are five variables that could affect the prices you will see when you shop for 2015 coverage starting next fall.

1) Medical costs: A key reason behind premium changes, this reflects both the price of care and whether people are using more or less of it. This varies widely across the country.

2) Customer health: Insurers may have to raise rates if the number of customers with expensive medical conditions exceeds their projections. They also have to design their plans to make them attractive to healthy people, who will contribute more in premiums than medical claims.

"The bottom line is attracting enough healthy people to pay for the sick," said insurance industry consultant Bob Laszewski. "That is 98 percent of the ball game."

A temporary reinsurance fund set up by the overhaul is shielding insurers from some of this risk while they get used to the exchanges.

3) Age: The overhaul limits how much more an insurer can charge older people, who typically use more health care. An insurer needs premiums from younger customers to make up for what they can't charge older policyholders anymore.

4) Competition: The cost of care can be higher in areas where one hospital or care provider dominates a market. Competition between insurers also can play a big role in holding down premium hikes in a market. Insurers don't want to lose customers by hiking rates too high, especially since the exchange made it easier for people to shop for coverage.

5) The overhaul: Insurers say rates could climb due to a host of overhaul-related changes that happened after companies set their 2014 prices. Technical problems with the HealthCare.gov website last year frustrated many trying to buy coverage on the exchanges and may have turned off some younger customers.

President Obama also decided late last year to allow some policyholders to keep individual coverage they had before 2014. That may keep some healthy customers off the exchanges.


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Europe's order to mute Google angers US

MOUNTAIN VIEW, Calif. — Europe's moves to rein in Google — including a court ruling this month ordering the search giant to give people a say in what pops up when someone searches their name — may be seen in Brussels as striking a blow for the little guy.

But across the Atlantic, the idea that users should be able to edit Google search results in the name of privacy is being slammed as weird and difficult to enforce at best and a crackdown on free speech at worst.

"Americans will find their searches bowdlerized by prissy European sensibilities," said Stewart Baker, former assistant secretary for policy at the U.S. Department of Homeland Security. "We'll be the big losers. The big winners will be French ministers who want the right to have their last mistress forgotten."

Mountain View, California -based Google says it's still figuring out how to comply with the European Court of Justice's May 13 ruling, which says the company must respond to complaints about private information that turns up in searches. Google must then decide whether the public's right to be able to find the information outweighs an individual's right to control it — with preference given to the individual.

The judgment applies to all search engines operating within the European Union. But in practice that means Google, given that 90 percent of all online searches there use Google's search engine.

"The ruling has significant implications for how we handle takedown requests," Google spokesman Al Verney said. "This is logistically complicated, not least because of the many languages involved and the need for careful review. As soon as we have thought through exactly how this will work, which may take several weeks, we will let our users know."

There will be serious technological challenges, said U.S. privacy attorney David Keating in Atlanta.

"It seems aspirational, not a reality, to comply with such a standard," he said. "The reengineering necessary to implement the right to be forgotten is significant."

Google may partially automate the process, as it does with copyright-infringement complaints, but ultimately a human will have to decide when results should be sanitized.

Johannes Caspar, who as Hamburg's Commissioner for Data Protection acts as Germany's lead regulator of Google on privacy issues, confirmed the company is already working on an "online tool" to help people file complaints.

Because the court's ruling applies only within Europe, it will mean some fragmentation of search results. That is, Europeans and Americans will see slightly different versions of the Internet. A worst-case scenario would be if Google decides it must err on the side of caution and removes links liberally in order to avoid lawsuits, critics of the ruling said.

Wikipedia founder Jimmy Wales, who has been an outspoken critic of the ruling, summarized it for The Associated Press as a "technologically incompetent violation of human rights." He said it amounts to censorship, and he predicted it will ultimately be scrapped.

"The danger is that search engines now are faced with an uncertain legal future which may require them to censor all kinds of things when someone thinks it is 'irrelevant'," Wales said.

In the wake of the decision, some Europeans are already asking to clean up their online history, though there may not yet have been a "flood" of hundreds of requests, including some from pedophiles and politicians, as was reported in the British press shortly after the ruling was handed down.

In Britain, David Murphy of the Information Commissioner's Office said "while we've had some people get in touch around this issue, we're simply telling them to speak to Google."

Officials in the Netherlands said they haven't had any new requests since the ruling.

Caspar, the German official, said his office has received 20 new requests, including some from people who won legal fights with websites to have material taken down — but the sites didn't comply because they were based abroad.

Differences between the U.S. and Europe over privacy have never been greater, sparked by recent revelations that the U.S. National Security Agency secretly broke into communications on Yahoo and Google abroad and targeted overseas telecoms, including German Chancellor Angela Merkel's own cellphone.

Joel Reidenberg, visiting professor of information technology policy at Princeton University, said the ruling was not surprising, "given the current tenor of US-European privacy relations as a result of the Snowden revelations."

A "fundamental divide" between the European and American worldview is becoming evident, he said.

"In Europe, there is a sense that privacy and control over personal data are basic human rights," he said. In America, freedom of speech and free-market solutions tend to prevail, he said.

Nico Sell, who runs San Francisco-based Wickr, an encrypted messaging service, said it would make more sense to let individuals, not tech giants, control their own online presence.

"The right to be forgotten is a great idea philosophically, but it is wrong to put the onus on Google or Facebook," she said. "They have no idea where all your data is, and this is not their job. We need to give consumers tools with the ability to add expiration dates to their personal data."

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Mendoza reported from Mountain View, California, and Sterling reported from Amsterdam, Netherlands.


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Lawmakers call for tighter grip on VA hospitals

WASHINGTON — The chairmen of House and Senate Veterans Affairs Committees on Sunday decried long waits and backlogs at the nations VA hospitals but stopped short of calling for the resignation of Veterans Affairs Secretary Eric Shinseki.

"You've got an entrenched bureaucracy that exists out there that is not held accountable, that is shooting for goals, goals that are not helping the veterans," said Rep. Jeff Miller, R-Fla., chairman of the House panel

"I think some people may by cooking the books" to suggest waiting times are shorter that they actually are, said Sen. Bernie Sanders, a Vermont independent who chairs the counterpart Senate committee.

Both chairmen were interviewed on CNN's "State of the Union."

Meanwhile, Sen. Richard Blumenthal, D-Conn., said on CBS' "Face the Nation" that the Justice Department "has to be involved." He said there is "credible and specific evidence of criminal wrongdoing across the country" at VA hospitals.

"We're not rushing to judgment. But the Department of Justice can convene a grand jury, if necessary," Blumenthal said.

Lawmakers from both parties have pressed for policy changes and better management as the Department of Veterans Affairs confronts allegations about treatment delays and falsified records at VA centers around the country. The program serves nearly 9 million veterans.

President Barack Obama did not mention the VA issue in a speech on Sunday to U.S. troops in Afghanistan during a surprise visit.

"The VA really didn't factor into the planning for the trip at all," said Ben Rhodes, the deputy national security adviser. "The VA is obviously something he's going to continue to work on very hard in the coming days and weeks back home as well."

Meanwhile, Army Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, in a pre-recorded interview broadcast Sunday on ABC's "This Week," called the VA's current problems "outrageous — if the allegations are documented and proven. And I suspect some of them will be."

"They've got to be held accountable," Dempsey said, adding that Shinseki "has made it very clear that they will be held accountable,"

The department's inspector general says 26 VA facilities are under investigation, including the Phoenix VA hospital, where a former clinic director says as many as 40 veterans may have died while awaiting treatment.

Officials also are investigating claims that VA employees have falsified appointment records to cover up delays in care. An initial review of 17 people who died while awaiting appointments in Phoenix found that none of their deaths appeared to have been caused by delays in treatment.

The allegations have raised fresh concerns about the administration's management of a department that has been struggling to keep up with the influx of veterans returning home from the wars in Iraq and Afghanistan, and Vietnam veterans needing more care as they age.

"You know, if we are going to send people off to war, we have a solemn promise to make sure that when they come home, we are going to take care of them," Sanders said.

The two committee chairmen appeared a day after the Obama administration agreed to recommendations from lawmakers in both parties and said it would allow more veterans to get care at private hospitals to help ease pressure on backlogged VA hospitals dealing with patients from the wars on terrorism as well as treating old soldiers from prior conflicts including Afghanistan and Iraq.

The problem is not a lack of resources, said Miller. "If money was the issue, this problem would have been solved a long time ago. VA is not using the resources that they're provided appropriately."

The VA says it is taking some of the pressure off its hospital system by allowing more veterans to be treated at private hospitals.

The VA spent about $4.8 billion last year on medical care at non-VA hospitals and clinics, spokeswoman Victoria Dillon said. That amounts to about 10 percent of health care costs for the Veterans Health Administration, the agency's health care arm.

It was not clear how much the new initiative would cost, Dillon said.

Said Sanders: "I think it's unfair to blame Shinseki for all the problems. Can he do better? Yes."

Meanwhile, Sen.

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Associated Press Writer Matthew Daly contributed to this report.

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Follow Tom Raum: http://twitter.com/TomRaum


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Pilgrim protesters to gather at Sagamore Bridge

BOURNE — Protesters are planning to gather near the Sagamore Bridge on Memorial Day to highlight concerns about the safety of the Pilgrim nuclear power plant in Plymouth.

The protesters called the current emergency plan in the event of an accident at the power plant unacceptable for those on the Cape.

The protest comes two months after Gov. Deval Patrick wrote the Nuclear Regulatory Commission expressing concerns about the plant. Patrick said he was writing on behalf of 15 southeastern Massachusetts communities.

Patrick said he shares their concerns because of what he called the lack of a "viable evacuation route" off of Cape Cod.

The NRC relicensed Pilgrim through 2032. The plant's operators say it's safe and secure.

Patrick said the NRC should require the plant be decommissioned if it can't comply with safety regulations.


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Regulations mulled for bitcoin

State regulators in Massachusetts and others around the country are taking a close look at virtual currencies as bitcoin continues to grow in popularity.

"We will be trying to come up with a model law or regulations states can use," said David Cotney, commissioner of the Massachusetts Division of Banks and chairman of the Emerging Payments Task Force. "This has gotten a lot of attention, and we want to make sure when we act, we get it right."

The task force is made up of nine state regulators from around the country, and will look at everything from bitcoin to mobile payments.

Last week though, the task force held a hearing on bitcoin and other virtual currencies, hearing testimony from bitcoin companies and regulators, include Barbara Anthony, undersecretary of the Massachusetts Office of Consumer Affairs and Business Regulation.

Anthony said one of the key issues is that average consumers may be interested in bitcoin, but are not aware of some of the risks.

"Consumers and average consumers need to know that there are certain drawbacks to trading in a virtual currency," Anthony said. "The kinds of consumer protections that we're used to, people have to understand they are not available to virtual currencies."

Things consumers should be aware of about bitcoin, Anthony said, include volatile worth and the fact there is no central authority that guarantees bitcoin's worth.

"You could buy $100 worth of bitcoin right now and over a period of time that value is not going to be $100," Anthony said.

Cotney said he is not planning on implementing any regulations on bitcoin immediately, but could down the road.

"We will certainly be looking at the efforts of this task force to help guide us," Cotney said.

Kyle Powers, co-founder of Liberty Teller, a company that makes bitcoin ATMs, said proper regulation will help carve out a place for the currency.

"Updated and streamlined regulations would help us grow our small business and would help Massachusetts maintain its leadership role in bitcoin," Powers said. "Bitcoin's biggest hurdle is educational, not technical. We work tirelessly everyday to increase access to and awareness of bitcoin, so we are on the same team when it comes to educating consumers."

Bitcoin had a busy week in the Boston area. Liberty Teller became one of the finalists for startup accelerator MassChallenge. And Circle Internet Financial, also based in Boston, announced its product, which aims to make bitcoin more accessible to consumers.


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Newspaper’s ‘Innovation Report’ is underwhelming, unrealistic

As a chorus of sycophants throws its collective back out to deem the leaked New York Times' Innovation Report a seminal work of genius, allow me to tell you why the 96-page document needs to be shelved like every other blue-ribbon commission production in history.

(It's only fitting that we do this as a Buzzfeed listicle, since the report made so much of trying to turn the Grey Lady into a cross between Upworthy and Flipboard.)

Top five reasons The New York Times cannot be serious about the Innovation Report, even if it was the work of a team led by publisher Arthur "Pinch" Sulzberger's son:

5) It suggests having journalists take the time to build and repackage an archive of their own work. Have these people ever been in a newsroom? Although the idea of unearthing archives and reusing them in new and different ways isn't entirely laughable, the notion that reporters themselves should spend time on this is.

4) The authors fail to correctly define industry "disruptors" — the innovators who supplant the old with the new, like Buzzfeed and Huffington Post. According to the report, one of the "hallmarks of disruptive innovators" is that the new product is "initially inferior to existing products." Like Uber was initially inferior to taxicab dispatchers? Or how Amazon paled in comparison to Borders? How bizarre … and false.

3) The report suggests that more personalization will draw readers, even suggesting that when a reader walks by a restaurant recently given a positive review by the Times, their phone should tell them. Memo to the authors: There's this new website called Yelp, and it's … well … never mind.

2) The entire report is about growing the Times' digital audience, but there's no talk of figuring out a way to make money from that audience. True, home page visits have plunged by half in two years. (That whole having a paywall thing, perhaps?) But even before the traffic downturn, talk of layoffs and financial peril persisted. The fact is that digital advertising and subscription models alike are inherently flawed — even with a large audience. Which brings me to the final item of this listicle:

1) There are nearly no new ideas, because the report was generated from interviews with folks who are already doing the stuff they're suggesting. Repackaging and re-purposing content, promotion via social media, connecting with audiences and envisioning the digital newsroom of the future are all themes within this puzzling document.

It's like a bunch of people got together to envision 2010 from 2005. And the resources to implement all these supposed innovations will be at the expense of real journalism.


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India's oldest car factory shelves elite sedan

NEW DELHI — India's oldest car factory has abruptly suspended production of the hulking Ambassador sedan that has a nearly seven-decade history as the car of the Indian elite.

It was unclear how long manufacturing will be on hold, but Kolkata-based Hindustan Motors said Monday it hopes to resume making the so-called "Amby" after a period of restructuring and clearing of its debts.

The heavy car's large size and poor gas mileage have driven customers to cheaper competitors from abroad. About 80 percent of cars sold in India today are small cars that can maneuver in crowded cities and that cater to a rising middle class eager for wheels without costs.

The company began making the Ambassador in 1948, modeling it after the British Morris Oxford III. Last year only 2,214 of the vehicles were sold, reflecting a steep decline from production levels in the 1980s around 24,000 vehicles a year.

Also known as the grand old lady of India's pot-holed and pitted roads, the Ambassador has remained largely unchanged for more than five decades in ferrying the elite including prime ministers and high-society celebrities. It recalls an era when India's policy of economic self-sufficiency meant domestically produced cars were the norm.

Its bulbous chassis and bouncy back seats delight tourists and other passengers nostalgic for earlier times, while many in rural India still view white Ambassadors as the de-facto vehicle of officialdom.

Though most Ambassador sales go to taxi services and government departments, "there has been a reduction in demand for the Ambassador," the company said.

"Sturdiness is its hallmark," the company said. "The robust build, it was always seen as a positive point for customers who wanted durability and safety."

Hindustan Motors, which as of September had accumulated losses greater than its assets, said the company's Uttarpara plant, just outside Kolkata in the eastern state of West Bengal, was suffering from problems including very low productivity, growing indiscipline, a critical shortage of funds and lack of demand for the Ambassador.

It announced the indefinite production suspension, including a halt in the payment of salaries to nearly 2,500 employees, in a notice pasted on the factory gates Saturday night.

Hindustan Motors said it plans to reopen the Uttarpara factory after settling debts and restructuring. The plant also makes a 1-ton mini-truck called the Winner as well as car parts.

"If they want to maintain the vehicle, if they want the brand to survive, they will have to think through some changes in pricing, fuel efficiency," said auto analyst Abdul Majeed at PriceWaterhouseCoopers in India. "The middle class, those folks don't worry about comfort and luxury at this point in time. They are only looking at necessity."

Hindustan Motors has been unsuccessful in a long search for new investors. Earlier this year it transferred another car plant based in the south-coast city of Chennai to its financial arm, Hindustan Motor Finance Corporation Ltd. That plant produces Mitsubishi and Isuzu brand vehicles for the Japanese companies.

Shares of Hindustan Motors sank 10 percent Monday.


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These cars great for ‘staycations’

The family-vacation-turned-disaster is a meme that has spawned countless horror stories, from "National Lampoon's Vacation" trips to Walley World to several sorry sequels to Baby being put in a corner to Mitt Romney's dog.

What happened to this idyllic American rite of summer?

Well … we got busy. Busy with a career, a family. With life.

But the urge to jump into the Wagon Queen Family Truckster and hit the highway remains. Since we're all pinched for time, we typically truncate our summer vacations these days. The most likely choices are "day trips" — consisting of an overnight visit, or at most, a weekend away — or so-called "staycations," where we don't venture very far from home.

No time? No worries. Automotive Editor Mark Takahashi of Edmunds.com says there are good vehicular choices for whatever summer fun one has in mind.

Boston's career-minded dual income, no kids' population has the wherewithal, but not the time to get on a plane and get away for multiple days. These people need a vehicle that suits a life in the fast lane — even if only for a short time.

Audi A4

Audis are popular sellers here, and the attractive, drivable and fuel-efficient A4 tops the list. It has a luxurious feel and a smaller footprint ideal for city living. Buyers find this versatile car great for daily driving, but also ideal for quickie road trips. (Starting MSRP: $33,800)

Porsche 911

Of course, if you're really looking for style and panache, turn to what Takahashi calls "the classic sports car." Its iconic shape still turns heads, and maintains its legendary perform attributes. Unapologetically built for two, this car is the pick for a night out on the town. (MSRP: $84,300)

Tesla Model S

A game changer. A car Takahashi calls "sleek, sophisticated and utterly futuristic," the all-electric Tesla Model S redefines the green car. The P85 model ($93,400) provides up to 265 miles of travel on a single charge, along with jaw-dropping acceleration. People fearful of electric vehicles worry that they'll get stranded without a recharging station nearby. Chargepoint.com shows well more than 1,000 stations scattered throughout New England. (MSRP: $69,900)

Another major draw for New England travelers, said Mary Maguire, the director of public and government affairs for AAA Southern New England, is, "We have so many terrific vacation spots in close proximity. They're an easy drive and an easy proposition financially, because you can get there and back on a half a tank of gas. It makes the idea of day trip or weekend more appealing."

And then there's the "staycation" — one of the most affordable vacation options available. People take time off, but don't stand still. For family outings, perhaps a trip to Fenway, a Little League tournament, or a trek to an amusement park, consider these conveyances:

Honda Accord Hybrid

"This is one of the rare cases where we prefer a hybrid adaptation over its gasoline-only origins," said Takahashi. "It drives just like a traditional Accord, but returns astounding fuel economy figures of 47 mpg in combined driving. AAA pegs gas prices this weekend at an average of $3.65 per gallon in Massachusetts, and those prices typically spike in summer, so 47 mpg equals a win. (MSRP: $29,155)

Lexus GS 350

Another fine choice for tooling about town is the Lexus GS 350. It has the luxury and comfort of its German competitors while keeping a couple thousand in your bank account — money you can spend on having fun. "It's capable, comfortable, and inside it showcases quality and cutting-edge technology," Takahashi said. (MSRP: $47,700)


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Big insurance rate hikes in the future?

The wild hikes in health insurance rates that blindsided many Americans in recent years may become less frequent because of the health care overhaul.

Final rates for 2015 won't be out for months, but early filings from insurers suggest price increases of 10 percent or more. That may sound like a lot, but rates have risen as much as 20 or 30 percent in recent years.

The rates that emerge over the next few months for 2015 will carry considerable political weight, since they will come out before Republicans and Democrats settle their fight for Congressional control in next fall's midterm elections. Republicans are vowing to make failures of the law a main theme of their election push, and abnormally high premiums might bolster their argument.

In addition to insuring millions of uninsured people, the other great promise of the massive health care overhaul was to tame the rate hikes that had become commonplace in the market for individual insurance coverage.

Some nonpartisan industry watchers say smaller price increases may come in the years to come, even though it's still early in the law's implementation. They point to competition and greater scrutiny fostered by the law as key factors.

Public insurance exchanges that debuted last fall and were created by the law make it easier for customers to compare prices. The overhaul also prevents insurers from rejecting customers because of their health.

That means someone who develops a health condition like high blood pressure isn't stuck in the same plan year after year because other insurers won't take her. She can now shop around.

The Urban Institute, a nonpartisan policy research organization, said in a recent report that competition will help restrain individual insurance prices next year.

And it could have a lasting impact once the new markets for coverage stabilize in a few years, said Larry Levitt, an insurance expert with the Kaiser Family Foundation, which analyzes health policy issues.

"Now if a plan tries to raise premiums a lot, people can vote with their feet and move to another plan," Levitt said.

Greater scrutiny by regulators could also keep rates from skyrocketing. The overhaul requires a mandatory review of rate increases larger than 10 percent, which can lead to public attention that insurers don't want.

"Nobody's going to get a rate increase unless they truly deserve it," said Dave Axene, a fellow of the Society of Actuaries, who is working with insurers in several states to figure out pricing. "The rigor that we had to go through to prove that the rates were reasonable, it's worse than an IRS audit at times."

To be sure, insurers and others in the field say it's too early to fully understand what pricing trends will emerge for individual insurance plans, which make up a small slice of the insured population. And some experts aren't convinced of any one outcome of the law.

Industry consultant Bob Laszewski called the idea that the exchanges will reign in prices by promoting competition an "unproven theory."

"No one has any idea what this risk really looks like yet and probably won't for two to three years," he said.

Karen Ignagni agrees. The CEO of the trade association America's Health Insurance Plans, which represents insurers, said competition between insurers will mean little if too many sick people sign up for coverage on the exchanges. Insurers need a balance between sick and healthy people to avoid big claim hits that lead to future rate hikes.

Either way, the rates that emerge over the next few months for 2015 will carry considerable political weight, since they will come out before Republicans and Democrats settle their fight for Congressional control in next fall's midterm elections. Republicans are vowing to make failures of the law a main theme of their election push, and abnormally high premiums might bolster their argument.

Laszewski, the industry consultant, expects some plans to seek either big premium increases or decreases in 2015, but he says that says nothing about the long-term implications of the overhaul. He noted that insurers entered 2014 without a good feel for what their competitors would charge, so price swings are inevitable as companies adjust.

Charmaine Piquette, 60, said she's "petrified" of a big increase for next year. "I finally feel like in my life I have a break and can afford to take care of myself even though I'm not living on very much a month," said Piquette, who lives outside Milwaukee.

Piquette used Wisconsin's public health insurance exchange in March to get coverage from the nonprofit insurance cooperative Common Ground. The plan costs her only about $177 a month thanks to a $500 tax credit she receives as part of the overhaul.

She lives mainly on about $1,200 a month in Social Security disability payments, but her health coverage helps her afford things like visits with a diabetes counselor to get her blood sugar back under control.

"I said, 'Praise the Lord' every single time I use this," she said.


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Medicaid surge triggers cost concerns for states

WASHINGTON — From California to Rhode Island, states are confronting new concerns that their costs will rise as a result of the federal health care law.

It's because of Medicaid.

Before President Barack Obama's law expanded the safety-net program, millions of people who were already entitled to coverage were not enrolled.

Those same people are now signing up in unexpectedly high numbers.

For states red or blue, the problem is that they must use more of their own money to cover this particular group.

In California, Democratic Gov. Jerry Brown's recent budget projected an additional $1.2 billion spending on the state's version of Medicaid, partly due to surging enrollment.

The latest predicament is likely to revive debates about how the federal government can saddle states with unanticipated costs.


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