Egypt eases travel restrictions for Gaza travelers (Reuters)

RAFAH, Gaza Strip (Reuters) – Egypt eased travel restrictions for residents of Gaza Saturday, eroding a blockade of the Palestinian territory imposed by Israel to isolate its Islamist Hamas rulers.

Egypt, which made peace with Israel in 1979 but whose interim military rulers want to improve relations with Palestinians, allowed nearly 300 Gazans to enter its territory at the Rafah crossing in the first hour after it opened.

By the end of the day, 450 travelers had crossed into Egypt. Only 23 were turned back because of Egyptian security concerns, a Palestinian border official said.

The official said 450 was the total number of people able to cross in a day and a half last week.

The Rafah crossing, Gaza's only door to the outside world not controlled by Israel, will operate six days a week instead of five and will open two hours longer per day.

"I believe this a unique move and positive development," said Ghazi Hamad, Hamas's deputy foreign minister.

Israel maintains a tight blockade of the Gaza Strip because Hamas refuses to recognize the Jewish state and calls for its destruction.

Israel allows most commercial goods to be brought into the Gaza Strip through land border crossings but limits the import of construction material it says could be used by Hamas to produce weapons or fortifications. It lets out a small number of Gazans, mainly for medical treatment.

Weapons and consumer goods have been smuggled for years through tunnels that run under the Gaza-Egypt border.

LOOSER TRAVEL RULES

Under Egypt's new travel guidelines, women, minors and men over 40 no longer require a visa to enter the country, meaning hundreds more passengers will be able to cross every day.

Previously, the terminal could cope with no more than 300 outgoing passengers per day and Hamad said with streamlined coordination he expected the daily numbers to triple.

"We will cooperate with Egyptian brothers to make sure the new arrangements get implemented smoothly and accurately ... We even hope that 1,000 people will be able to cross every day," Hamad, who oversees work at the crossing, told Reuters.

Palestinians say the Egyptian move marks a new era in relations after the February removal in an uprising of Egyptian president Hosni Mubarak, who helped preserve the blockade and sided with Palestinian President Mahmoud Abbas, Hamas's rival.

Egypt brokered a reconciliation pact between Hamas and Fatah signed earlier this month to end a four-year feud in a move which Palestinians hope will lead to the formation of a unity government and elections within a year.

Nabil Shaath, a senior Fatah official visiting the Gaza Strip, said the easing of travel for Gazans came as a result of the reconciliation deal which "has made the job easier for Cairo ... as now they are dealing with one (Palestinian) entity."

"We are very happy, it was a brave decision by Egypt to open the crossing and to dismantle the prison imposed by Israel on the people (of Gaza)," he said.

The blockade has compounded poverty in the territory of 1.5 million. It was eased by Israel in the wake of an international outcry a year ago after it killed nine pro-Palestinian Turks in confrontations during a commando raid on a Gaza-bound flotilla.

Israel has said it hopes Cairo will not heed Hamas demands to allow commercial goods through the crossing, saying it fears more arms will be smuggled into the territory.

Shaath rejected the fears: "Opening this door does not mean Egypt wants to allow bombs and explosives ... Egypt wants to allow safe passage of individuals who want to conduct their lives."

(Additional reporting by Ahmed El-Shemi in Rafah, Egypt; Editing by David Cowell)

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Obama Administration Eases Pain of Medicare Cuts

Associated Press

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Millions of seniors in popular private insurance plans offered through Medicare will be getting a reprieve from some of the most controversial cuts in President Obama's health care law.

In a policy shift critics see as political, the Health and Human Services department has decided to award quality bonuses to hundreds of Medicare Advantage plans rated merely average.

The $6.7 billion infusion could head off service cuts that would have been a headache for Obama and Democrats in next year's elections for the White House and Congress. More than half the roughly 11 million Medicare Advantage enrollees are in plans rated average.

In a recent letter to HHS Secretary Kathleen Sebelius, two prominent GOP lawmakers questioned what they termed the administration's "newfound support" for Medicare Advantage.

The shift "may represent a thinly veiled use of taxpayer dollars for political purposes," wrote Sen. Orrin Hatch of Utah and Rep. Dave Camp of Michigan. Camp chairs the House Ways and Means Committee, which oversees Medicare. Hatch is his counterpart as ranking Republican on the Senate Finance Committee.

Seniors are among the deepest skeptics of the new health care law. A recent AP-GfK poll found that 62 percent disapprove of Obama's handling of health care, as contrasted with 52 percent approval among Americans overall. The poll also found that seniors are more likely to trust Republicans than Democrats on the issue, by a 51 percent to 36 percent margin.

The insurance industry says the bonuses will turn what would have averaged out as a net cut for Medicare Advantage plans in 2012 into a slight increase.

The administration says the reason for the bonuses is quality improvement, not politics.

"We are looking at whether an alternative payment incentive structure would lead to broader quality improvements across all Medicare Advantage plans, by giving incentives for a broader range of plans to improve," said Medicare spokesman Brian Cook.

Medicare covers seniors and disabled people. About one-fourth of beneficiaries are signed up in Medicare Advantage plans that offer lower out-of-pocket costs and more comprehensive benefits than the traditional program. Some of the heaviest enrollment is in states considered political battlegrounds, including Florida, Pennsylvania, Ohio, Nevada, Minnesota and Colorado.

The health care law cut $145 billion over ten years from Medicare Advantage, partly to correct a widely acknowledged problem with overpayments to the plans. Those cuts start off modestly in 2012 and build up. Insurers were expected to shift the burden to beneficiaries in the form of fewer services and higher out-of-pocket costs, triggering an exodus back to traditional Medicare.

"The net result is that the boat didn't get rocked," said independent analyst Dan Mendelson, president of the information firm Avalere Health. "It's fair to say that (Medicare) could not tolerate dislocation, given the political climate."

But Mendelson also said he agrees with the administration that the new money will get more plans thinking about how to improve quality, if they want to remain profitable.

"They are giving the plans training wheels to improve their quality," he said.

The health care law itself tried to soften the impact of Medicare Advantage cuts by providing quality bonuses for highly-rated plans that received four or five stars in a government grading system.

But in a policy shift quietly completed this month, HHS decided that average-quality plans garnering three or three-and-a-half stars would also get bonuses. About half of all the plans fall into the three-star category, according to Avalere's analysis.

The HHS decision means that four of five Medicare Advantage enrollees are in plans now eligible for a bonus. That contrasts with the approach that Congress took in the health care law, where only one in four beneficiaries would have been in plans getting the extra payments.

HHS' nearly $7-billion bonus program is temporary. In 2015, the cuts called for in the health care law will kick in again.

But the episode could be an early sign that Medicare cuts used to finance much of Obama's coverage expansion for the uninsured will turn out to be politically unsustainable, as have other efforts to impose austerity. For example, Congress has routinely waived cuts in Medicare payments to doctors.

A nonpartisan agency that advises lawmakers on Medicare criticized the bonus plan. The Medicare Payment Advisory Commission said it amounts to "a mechanism to increase payments" and its design "sends the wrong message about what is important to the program and how improved quality can best be achieved."

At a time when government is urging health care providers to improve quality and cut costs, the bonus plan "lessens the incentive to achieve the highest level of performance," commission chairman Glenn Hackbarth wrote to HHS officials. Medicare spokesman Cook disagreed, saying even plans that get two stars will now have an incentive to improve.

Medicare has classified the bonuses as a demonstration program, relying on broad legal authority Congress gave the agency to experiment with quality improvements. It's the costliest demonstration program in Medicare history. The money will come from the Medicare trust fund.

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