WASHINGTON (Reuters) - Merck & Co's experimental insomnia drug moved a step closer to U.S. approval on Wednesday after a panel of medical experts said it is effective and safe at lower doses.

The advisory panel was convened to help the U.S. Food and Drug Administration decide whether to approve the drug, suvorexant, which would be the first in a new class of sedatives that block chemicals in the brain called orexins that help keep people awake. The drugs are designed to help people fall asleep and stay asleep.

On Monday, the FDA's internal reviewers published a report expressing concern about suvorexant's potential to cause next-day sleepiness and impaired driving. They asked the committee to consider whether patients should be started at a lower dose than that recommended by Merck.

Merck proposed that elderly patients start by taking 15 milligrams of the drug and increase that to 30 if necessary. The company recommended non-elderly adults start on 20 milligrams and increase to 40 milligrams if needed.

On Wednesday, the FDA reiterated its opinion that there was little evidence in Merck's data to show that the higher dose was more effective than the lower dose, and considerable evidence to show it was less safe.

The FDA's reviewers pointed to an increase in the risk - especially at the higher doses - of suicidal thoughts and behaviors, impaired driving, and severe sleep disturbances.

Speaking for the FDA, Dr. Ronald Farkas noted cases in which patients had reported sleep paralysis and terrifying hallucinations. He also expressed the agency's concern about the drug's impact on driving.

"What we are trying to prevent is criminal prosecution of patients taking their drug as prescribed," he said.

The FDA's views were echoed by those of several patient advocacy groups.

"Like its predecessors, suvorexant's marginal benefit in extending overnight sleep time by a few minutes is achieved at the expense of prolonged, next-day drowsiness, with potentially fatal consequences," said Dr. Sammy Almashat, a researcher with Public Citizen's Health Research Group who noted that suvorexant stays in the body longer than all but one other sleep drug.

Still, the panel voted 13 to 3, with one abstention, that the drug could be used safely at the 15 and 20 milligram doses. It voted 8-7, with two abstentions, that the drug is not safe at 30 and 40 milligrams.

LOWER DOSE

Merck celebrated the vote, saying in a statement that it was "excited about the potential of suvorexant as a new and different approach to treating insomnia."

The FDA is not bound to follow the advice of its advisory panels but typically does so.

The FDA had asked the panel to consider whether patients should start with a 10 milligram dose, saying data from a smaller trial showed that amount might work for some people. Merck disputed that, saying 10 milligrams would not be effective.

The FDA also asked the panel if Merck should conduct an additional trial to further evaluate a 10 milligram dose. The panel voted against that. Some agreed that 10 milligrams would not be effective. Others agreed in principal with a lower starting dose, but most said a new trial would not add meaningfully to the information already in hand.

"When you have something new you don't know everything you would like to know," said Dr. Christian Guilleminault, a professor at Stanford University School of Medicine. However, he added: "I'm not sure that doing another study is going to bring us much more."

The FDA's concerns come amid a broader review of the safety of sleeping pills following hundreds of reports of driving accidents involving people taking zolpidem, the active ingredient in Sanofi SA's Ambien.

About 60 million prescriptions for these drugs were written in the United States in 2011, according to healthcare research firm I.M.S. Of those, roughly 40 million contained zolpidem.

In January, the FDA told drugmakers they should lower the recommended dose of zolpidem in women to 5 milligrams from 10 for immediate-release products including Ambien, Edluar and Zolpimist. The agency said doses for extended-release products should also be cut in half.

Dr. Jason Todd, a panel member and staff neurologist at NorthEast Neurology in Concord, North Carolina, said patients are adjusting to the lower dosing recommendations for Ambien.

"Before the recent changes I almost never saw a patient who would take 5 milligrams and stay with it," he said. "Now that 5 milligrams is recommended people are OK with 5 milligrams."

The panel's ultimate recommendation surprised some analysts who had expected, based on the FDA's review, that the meeting would be more contentious.

"Based on the overall discussion today and the voting of the panel, we believe that the probability of FDA approval for suvorexant has gone up meaningfully," Mark Schoenebaum, an analyst at ISI Group, said in a research note.

Having said that, he said: "We admit that predicting a final FDA decision is difficult."

(Reporting by Toni Clarke in Washington; Editing by Alden Bentley, Leslie Adler and Edmund Klamann)

The IRS found that Lane, who gave up his chairmanship of HP in April after coming under investor pressure for his role in the acquisition of Autonomy Plc, participated in a "sham" tax shelter and generated losses of $251 million to offset income, Bloomberg reported, citing appeal papers filed May 6 with the U.S. Tax Court in Washington, D.C.

Lane told Reuters the issue stemmed from a fund in 2000 that his tax advisers "put him into," which in turn invested in startups during the first dotcom boom.

"It became obvious in 2004 that the IRS looked at it as a tax shelter. And nothing has happened until 2013," Lane said in an interview, adding that the IRS simply said it was auditing Lane's 2000 returns and asked him to sign extensions on a statute of limitations every 18 months.

"They were reviewing, and I was reviewing, the upfront payment that was made which they considered to be fees, which we had claimed had been warrants in these companies," he explained. "One would be taxed as ordinary income, and one would be taxed as capital gains."

Lane said he recently signed a settlement letter with the IRS regarding the taxes owed but has yet to pay his outstanding bill.

"I have never disagreed with it," he said. "I have waited for the IRS. They just simply kept extending it."

Lane has had a rough year. Following his resignation as chairman of HP, Lane also stepped down from the board of troubled automaker Fisker Automotive, which he had backed while at Kleiner.

Lane joined storied venture capital firm Kleiner Perkins in 2000 after eight years at Oracle Corp , where he helped take the software company to $10 billion in revenue from $1 billion. Although his expertise lay in software, he increasingly took on clean technology, which became a focal point at Kleiner.

(Reporting By Poornima Gupta; Editing by Cynthia Osterman)

Collins wore a T-shirt that read (hash)BeTrue when he joined thousands of marchers in the parade, chatting with well-wishers, greeting other marchers and holding babies as people came up to him to express their support.

The parade also featured former U.S. Rep. Barney Frank the first sitting member of Congress to enter into a same-sex marriage who also represented Massachusetts' 4th Congressional District before Kennedy. U.S. Rep. Ed Markey, the Democratic U.S. Senate candidate seeking the seat once held by John Kerry, who stepped down to become secretary of state, also marched.

The parade's grand marshal, Boston Mayor Thomas Menino, did not march because he is recovering from prostate surgery. Still, he came out of the city-owned house to greet Collins, Kennedy and other marchers as they passed by.

In coming out as gay in April, Collins wrote in an article for Sports Illustrated that his decision to go public came when Kennedy marched in last year's parade and Collins didn't feel that he could join him.

He also said the Boston Marathon bombing reinforced the notion that things can change in an instant, so he might as well live truthfully.

Collins played for six teams in 12 seasons and becomes a free agent next month. The Celtics dealt him to the Washington Wizards in a midseason trade.

Collins also threw out the ceremonial first pitch at the Red Sox game Thursday.

Kennedy said in April that he's proud to call Collins a friend.

Collins said at the time he "endured years of misery and gone to enormous lengths to live a lie."

The increase along with a jump in homebuilder confidence this month suggests the housing market continues to recover.

The National Association of Realtors said Monday that sales rose 2.1 percent to a seasonally adjusted annual rate of 4.79 million. That's up from 4.69 million in September, which was revised lower.

The sales pace is roughly 11 percent higher than a year ago. But it remains below the more than 5.5 million that economists consider consistent with a healthy market.

As the economy slowly recovers, more people have started looking to buy homes or rent apartments. Prices are steadily climbing, while mortgage rates have been low all year. At the same time, rents are rising, making the purchase of a single-family home or condominium more attractive.

"Altogether, the report is encouraging," said Michael Gapen, an economist at Barclays Capital. "Our view is that housing is in a recovery phase," he added, though it will be restrained by limited credit and modest job gains.

A separate report Monday showed confidence among homebuilders rose this month to its highest level in six and a half years. The increase was driven by strong demand for newly built homes and growing optimism about conditions next year.

The National Association of Home Builders/Wells Fargo builder sentiment index increased to 46, up from 41 in October. Readings below 50 suggest negative sentiment about the housing market. The index last reached that level in April 2006. Still, the index has been trending higher since October 2011, when it stood at 17.

The Realtors' group said Superstorm Sandy delayed some sales of previously occupied homes in the Northeast. Sales fell 1.7 percent there, the only region to show a decline. Those sales will likely be completed in future months, the group said.

The median price for previously occupied homes increased 11.1 percent from a year ago to $178,600, the Realtors' said.

A decline in the number of homes available for sale is helping push prices higher. There were only 2.14 million homes available for sale at the end of the month, the lowest supply in 10 years. It would take only 5.4 months to exhaust that supply at the current sales pace. That's the lowest sales-to-inventory ratio since February 2006.

Prices are also benefiting from the mix of homes being sold. Sales of homes priced at $500,000 and above have jumped more than 40 percent in the past year. Sales of homes and condominiums that cost less than $100,000 fell 0.6 percent.

There have been other positive signals from the housing market. Applications for mortgage loans to buy homes jumped 11 percent in the week ended Nov. 9, compared with a week earlier, the Mortgage Bankers' Association said last week. Purchase applications are up 22 percent in the past year.

Foreclosures are slowing. The number of properties that began the foreclosure process in the first 10 months of the year fell 8 percent compared with the same period last year, RealtyTrac said last week.

And builders broke ground on new homes and apartments at the fastest pace in more than four years in September. The jump could help boost the economy and hiring.

Still, the market has a long way back to full health. Many potential home buyers cannot meet stricter lending standards or produce larger down payments required by banks.

That can be a particular problem for first-time homebuyers. They accounted for 31 percent of sales in October, down slightly from September and below the 40 percent that is common in a healthy market.

Federal Reserve Chairman Ben Bernanke said Thursday that banks' overly tight lending standards may be preventing sales and holding back the U.S. economy.

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Veiga reported from Los Angeles.

But when it comes to her upcoming walk down the aisle with Justin Theroux, the actress is still deciding on what to wear.

"No, I don't," she told E! News when asked if she had a wedding gown picked out yet.

Adding that wedding planning "might make me crazy."

The 44-year-old star sported a black strapless pantsuit on the red carpet, where she told Access Hollywood about her new project with Lifetime, which is a series of five short films dealing with mental health issues.

"It's not anything to be ashamed of because that's the biggest problem is that people feel because it's mental and it's your brain, you feel crazy and that's such a catchphrase that people are accused of. And it's like any ailment, any disease that's taking place in our body," she said of what she hopes the film sheds light on.

Adding, "There's a big stigma around mental illness and there just doesn't have to be, you can live a very successful life."

Jennifer also made a statement showing off cupping marks (caused by the Eastern medicine practice of attaching glass cups to the skin via heat or suction to help with circulation.)

Numerous cupping circles could be seen dotting the star's back.

-- Jesse Spero

Copyright 2013 by . All rights reserved.This material may not be published, broadcast, rewritten or redistributed.

SEC Commissioner Mike Slive said the SEC network will produce 1,000 live events each year, including 450 televised on the network and 550 distributed digitally. Slive says the network will carry approximately 45 SEC football games each year "and a depth of content across all sports."

No financial terms were released for the deal, which continues through 2034.

The announcement came at a news conference attended by Slive, ESPN President John Skipper, 32 SEC coaches and each of the league's 14 athletic directors. The emphasis was this is to be a national network.

"We believe this conference has national appeal," Skipper said. "This is a national network. This is not a regional network. We understand that in the 11-state footprint is where the most passionate fans are, but there are a lot of SEC fans in California and Texas and New York and Connecticut and Virginia and Nebraska."

The league's coaches and athletic directors said having the national network will make all sports more attractive.

"In volleyball, we may want to go after players in California or in the Midwest," said Georgia athletic director Greg McGarity. "Now they can see the SEC is going to have a broadcast of Georgia-Florida volleyball match on ESPN on Tuesday night at 9 o'clock. That's the type of stuff you can only dream about. Now we have it unfolding.

"Football, obviously, that's already well-populated. What it does for your Olympic sports is just immeasurable."

Kentucky basketball coach John Calipari, who already has a national recruiting base, said the network will make all SEC schools more attractive to national recruits.

"Everybody's recruiting stretches out because they already may want to play against Florida and Kentucky and everybody here, but being in the SEC means if you come with us, you're not a regional player, you're national," Calipari said. "You don't have to worry you have to stay home because that's your fan base. Your fan base is national. You don't have to worry about regional fan bases. You can go out and create what you want to create."

Still, there was no doubt what sport drove the deal football.

Calipari acknowledged he felt left out as he sat on the stage and heard only football-related questions. Asked where basketball fit in the SEC picture, Calipari said "I don't know. How many men's basketball questions were there today? Did we have any? No.

"In the room it was either they wanted to know about money, percentages or what it did with football. I was ready to stand up 'Can I ask a basketball question?' I almost did it, just to do it. Then I said no, I don't want to embarrass anybody."

Georgia football coach Mark Richt said the network should be another empowering tool for the SEC, already the national power with seven straight national championships.

"I don't think there's any doubt," Richt said. "It's not a regional network. It's a national network. It's going to appeal to people of all ages, including the people we're going to be recruiting. My guess is there will be content there that will showcase our players, showcase our facilities and showcase our coaching staff and what we've done in recent past and what we want to do in the future. It can only help us."

Slive also would not discuss details of the ownership arrangement with the SEC and ESPN.

"We would not have done this if we did not believe it would be in the long-term benefit of the league, both in terms of distribution and in terms of revenue," Slive said.

"We're both happy," Slive said.

The Big Ten and Pac 12 also have established networks, but Slive said the SEC's partnership with ESPN is different.

"What's unique and never been done before is partnering with our primary rights holder, which will allow us to move events seamlessly between various platforms," Slive said.

The SEC signed a 15-year deal with CBS in 2008. CBS will still have the first choice of SEC football games.

ESPN senior vice president Justin Connolly said AT&T U-Verse has signed on as the network's first distributor. He said talks are just beginning with other possible cable partners.

Connolly said the deal also gives ESPN rights to oversee the league's corporate partner program. In addition, ESPN will manage and run all of the SEC's digital platforms.

Scheduled to start at 7:05 p.m., the game was delayed three times before finally resuming at 12:13 a.m. 2 hours, 39 minutes after the third and lengthiest delay. Before that there was uncertainty, confusion and, of course, rain.

The teams were delayed a total of 4:49, long enough for the calendar to change before nine innings were played. It ended at 2:53 a.m., giving the teams a short turnaround before a 1:05 start on Saturday.

It was the majors' second marathon game in two days. On Thursday night, Kansas City and St. Louis were delayed an hour before the first pitch and another 4 hours, 32 minutes by rain before the Royals beat Cardinals 4-2 well after 3 in the morning.

Matt Joyce and Loney connected for two-run homers in Tampa's five-run third inning off Scott Barnes (0-1), who replaced starter Corey Kluber following the weather stoppages. Loney added a solo shot to make it 6-2 in the eighth.

Jamey Wright (1-1) came in for unbeaten Tampa starter Matt Moore and pitched three innings for the Rays, who went an AL-best 18-10 in May. Cleveland's only hit was Ryan Raburn's RBI double in the fifth off Josh Lueke.

Cesar Ramos pitched three hitless innings for his first career save.

The teams had little choice but wait out the long delays. With a forecast for heavy rain on Saturday and Sunday, the umpires figured they had to try to get in one game with the possibility the whole weekend could get washed out. The teams aren't scheduled to meet again this season.

The game was delayed 1 hours, 57 minutes at the start, 13 minutes in the second inning and then for another 2:39 before it started again in front of a crowd that began as more than 30,000 and dwindled to just a few thousand, who waited it out and were rewarded for their patience.

At about 11 p.m., Indians manager Terry Francona, Rays manager Joe Maddon, Cleveland general manager Chris Antonetti and two umpires did a walking tour of the saturated outfield grass to inspect the conditions. Not long after that, the overworked grounds crew was summoned again to get the field ready and at 12:13 a.m. Wright threw a pitch to Nick Swisher.

At one point during the third delay, Maddon, with the hood of his blue sweatshirt pulled over his head to try and stay dry, took a stroll through the soggy outfield.

After thunderstorms blasted through the area, the 7:05 p.m. start was pushed back to 9:02 p.m. and the teams took the field under threatening skies.

Kluber got two outs in the second inning when play was halted by rain at 9:18 as plate umpire Fieldin Culbreth ordered the grounds crew to put the tarp on the field. But within seconds of the infield being covered, the rain stopped and the game was re-started just 13 minutes later.

Kluber gave up a walk and got Desmond Jennings to line out for the last out in the second when the rain resumed after three minutes of play and the game was stopped again at 9:34 p.m.

Both Maddon and Francona met separately with the umpires as fans scrambled to stay dry. The Indians announced they reduced $1 dollar hot dogs to 50 cents as a way of thanking fans for enduring the rain. During the third delay, fans watched out-of-town games on the giant scoreboard and cheered when Baltimore beat the first-place Detroit Tigers on a walkoff homer, moving the Indians into a temporary tie atop the AL Central.

The Rays came out swinging after the lengthy delays as Joyce and Loney homered off Barnes in the third to give Tampa Bay a 5-0 lead.

Yunel Escobar singled with one out, and with two outs, Joyce drove Barnes' pitch 411 feet over the wall in right-center for his 10th homer. Kelly Johnson walked and scored on Evan Longoria's double, and Loney followed with his sixth homer, a shot that drew boos from the doused fans hanging around.

Held without a hit through four innings by Moore and the journeyman Wright, the Indians cut it to 5-2 in the fifth on a sacrifice fly by Yan Gomes and Raburn's two-out RBI double .

NOTES: It was Loney's first multihomer game since Sept. 7, 2007. ... Browns offensive linemen, including Pro Bowler Joe Thomas, visited the Indians clubhouse before the game and then crowded into the dugout to stay out of the rain. Thomas couldn't convince one of the rookies to do a belly slide across the tarp for money. ... Indians closer Chris Perez, on the disabled list with a sore right shoulder, will be reevaluated Sunday before the next step in his rehab is mapped out. ... Rays RHP Alex Colome, who made his major league debut Thursday in Miami, was optioned to Triple-A Durham. LHP Jeff Beliveau was recalled. ... Rays RHP Chris Archer will make his season debut Saturday, the eighth starter Tampa Bay has used this season

Recognizing the potential danger to conscience rights posed by government oversight of worship practices, this court has repeatedly cautioned against government control of prayer content. The adoption of an endorsement test effectively nullifies this line of precedent. An endorsement test requires courts to play the role of theologian, making judgments about the prayers validity based on the supposed religious effect they are likely to have on observers.

Attorneys for the town of Greece, New York, in appeal papers asking the Supreme Court to rule on the constitutionality of opening the local governing bodys public meetings with prayers recited by local clergy. The court on Monday accepted the case for review at its next term starting in October.

checkSince 1962, the Supreme Court has been quite consistent in the constitutional view that prayer is a form of religious devotion that belongs in private settingsthe home or the worship centernot in the halls of government. It broke with that consistency some 30 years ago, when it allowed prayer with decidedly religious content to be recited by a paid chaplain at the opening of a state legislatures sessions. It said that was different, historically. After that, its skepticism about official prayer returned and has continued.

On Monday, the court signaled its willingness to reopen the entire issue of prayer in the public sphere, as a question under the First Amendments Establishment Clause. Just as the justices have slowly grown more tolerant of government displays of the 10 Commandments, especially if those exhibits have been in place for many years, they may now be pondering a greater acceptance of official prayerif it occurs in a setting where most of the audience is made up of adults.

A defining feature of most of the courts rulings against prayer rituals is that they have come in the public school setting, where the audience is composed of impressionable youngsters. What has emerged in the most recent rulingsa decision in 1992 against officially sponsored prayers at a public middle school graduation, and a 2000 decision against such prayers at a high school football gameis the court majoritys concern that younger students may be coerced into conforming to a dominant religious theme, and, if they are of a different faith (or of none), will feel isolated and hurt.

In a word, that reaction reflects the fear of coercionthat is, the government sending the message to go along with religious dogma. The coercion theory under the Establishment Clause has been most identified with Justice Anthony M. Kennedy.

There is a rather subtle difference between that theory of coercion and another theory that the court has sometimes used in trying to keep religion and government separated: the theory of endorsement. That theory is closely identified with the work of retired Justice Sandra Day OConnor.

That, too, is about government sending a message: When government appears to be sponsoring a creed linked to one faith alone, it is said to be passing the word that this is essentially the official religion. Appearances count more under that theory than they do under coercion theory, which involves the implied taking away of choice.

Hannah Warren has been unable to breathe, eat, drink or swallow on her own since she was born in South Korea in 2010. Until the operation at a central Illinois hospital, she had spent her entire life in a hospital in Seoul. Doctors there told her parents there was no hope and they expected her to die.

The stem cells came from Hannah's bone marrow, extracted with a special needle inserted into her hip bone. They were seeded in a lab onto a plastic scaffold, where it took less than a week for them to multiply and create a new windpipe.

About the size of a 3-inch tube of penne pasta, it was implanted April 9 in a nine-hour procedure.

Early signs indicate the windpipe is working, Hannah's doctors announced Tuesday, although she is still on a ventilator. They believe she will eventually be able to live at home and lead a normal life.

"We feel like she's reborn," said Hannah's father, Darryl Warren.

"They hope that she can do everything that a normal child can do but it's going to take time. This is a brand new road that all of us are on," he said in a telephone interview. "This is her only chance but she's got a fantastic one and an unbelievable one."

Warren choked up and his wife, Lee Young-mi, was teary-eyed at a hospital news conference Tuesday. Hannah did not attend because she is still recovering from the surgery. She developed an infection after the operation but now is acting like a healthy 2-year-old, her doctors said.

Warren said he hopes the family can bring Hannah home for the first time in a month or so. Hannah turns 3 in August.

"It's going to be amazing for us to finally be together as a family of four," he said. The couple has an older daughter.

Only about one in 50,000 children worldwide are born with the windpipe defect. The stem-cell technique has been used to make other body parts besides windpipes and holds promise for treating other birth defects and childhood diseases, her doctors said.

The operation brought together an Italian surgeon based in Sweden who pioneered the technique, a pediatric surgeon at Children's Hospital of Illinois in Peoria who met Hannah's family while on a business trip to South Korea, and Hannah born to a Newfoundland man and Korean woman who married after he moved to that country to teach English.

Hannah's parents had read about Dr. Paolo Macchiarini's success using stem-cell based tracheas but couldn't afford to pay for the operation at his center, the Karolinska Institute in Stockholm. So Dr. Mark Holterman helped the family arrange to have the procedure at his Peoria hospital, bringing in Macchiarini to lead the operation. Children's Hospital waived the cost, likely hundreds of thousands of dollars, Holterman said.

Part of OSF Saint Francis Medical Center, the Roman Catholic hospital considers the operation part of their mission to provide charity care, but also views it as a way to champion a type of stem-cell therapy that doesn't involve human embryos, the surgeons said. The Catholic church opposes using stem cells derived from human embryos in research or treatment.

Macchiarini has been involved in 14 previous windpipe operations using patients' own stem cells five using man-made scaffolds like Hannah's but in adults; and nine using scaffolds made from cadaver windpipes, including one in a 10-year-old British boy.

He said only one patient died, a 30-year-old man from Abingdon, Md., who had the operation in November 2011 to treat late-stage cancer of the windpipe. He died about four months later of uncertain causes, Macchiarini said.

Similar methods have been used to grow bladders, urethras and last year a girl in Sweden got a lab-made vein using her own stem cells and a cadaver vein.

Scientists hope to eventually use the method to create solid organs, including kidneys and livers, said Dr. Anthony Atala, director of Wake Forest University's Institute for Regenerative Medicine. He said the operation on Hannah Warren "is really showing that the technique is workable."

Hannah had breathing difficulties at birth and Korean doctors soon discovered the missing windpipe. They reconfigured her esophagus so that a breathing tube could go down it from her mouth to her lungs. The esophagus normally runs behind the windpipe and carries food to the stomach.

Korean doctors said she couldn't live long with the tube and told her parents there was nothing more they could do.

Hannah outlived their expectations and has thrived despite the grim prognosis and other abnormalities including an undeveloped voice box that prevented her from speaking. Now that she has a windpipe and can breathe more normally, doctors expect the larynx to grow and function normally. She will work with speech therapists to help her learn to talk.

Holterman said Hannah will likely need a new windpipe in about five years, as she grows.

She breathes with help from a ventilator but no longer has a tube in her mouth that she'd lived with since shortly after birth, Holterman said. She's not yet able to eat normally, but doctors let her have her first taste ever of food a few licks on a lollipop. Her father said she already has discriminating taste and prefers chocolate Korean lollipops to the American kind.

"I asked her, 'Is it good?'" he said, "and she immediately nodded her head."

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Online:

Regenerative Medicine: http://1.usa.gov/13IWdrx

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

Her care and the medical services for her children and grandchildren are paid for as part of the government's treaty obligations to American Indian tribes dating back nearly a century. But under President Barack Obama's health care overhaul, DeRouen and tens of thousands of others who identify as Native American will face a new reality.

They will have to buy their own health insurance policies or pay a $695 fine from the Internal Revenue Service unless they can prove that they are "Indian enough" to claim one of the few exemptions allowed under the Affordable Care Act's mandate that all Americans carry insurance.

"I'm no less Indian than I was yesterday, and just because the definition of who is Indian got changed in the law doesn't mean that it's fair for people to be penalized," said DeRouen, a former tribal administrator for the Dry Creek Rancheria Band of Pomo Indians who lost her membership amid a leadership dispute in 2009. "If I suddenly have to pay for my own health insurance to avoid the fine, I won't be able to afford it."

The Affordable Care Act takes a narrow view of who is considered American Indian and can avoid the tax penalty, which will reach a minimum of $695 when fully phased in. It limits the definition to those who can document their membership in one of about 560 tribes recognized by the U.S. Bureau of Indian Affairs.

Yet more than 100 tribes nationwide are recognized only by states and not the federal government. Many tribes do not allow their members to enroll before they are 18, meaning some school-age children whose parents are American Indian might not be considered "Indian" under the definition in the act.

Other tribal governments have complicated blood-quantum requirements or rules that all members must live on the reservation, even though nearly two-thirds of American Indians and Alaska Natives now live in metropolitan areas, partly a legacy of federal relocation and adoption programs.

The definition of Indian in the Affordable Care Act is roiling emotions on reservations and in native enclaves across the country, but U.S. Department of Health and Human Services spokeswoman Erin Shields said the agency is powerless to change it without an act of Congress.

The problem is so new that the federal government is still seeking to establish how many people might be affected, although Indian health advocacy groups estimate it could be up to 480,000.

In California alone, about 21,000 people who currently receive free health care through Indian clinics are not recognized as Native American by the federal government and would have to pay the penalty, according to the nonprofit California Rural Indian Health Board.

"We have and will continue to encourage a robust dialogue with American Indian and Alaska Native communities about this matter, and welcome their input and ideas for solutions," Shields said in a statement to The Associated Press. "Under the law, it would require a legislative rather than regulatory change to address this matter. And as we consider approaches to the best possible solution, we are eager to work with Congress."

The IRS is working with the definition but has not yet decided how the agency will verify who qualifies as Indian or assess the penalty on tax returns, agency spokesman Eric Smith said. The IRS and U.S. Treasury have scheduled a May 29 public hearing on their proposed rules establishing who qualifies for an exemption from the insurance coverage requirement.

Republican Rep. Tom Cole, a member of the Chickasaw Nation in Oklahoma and one of just two federal legislators who are members of a federally recognized tribe, said he was aware of the concerns and would ensure that care for native people was not compromised as the health overhaul rolls out. He declined to comment about whether he would sponsor a bill to address the issue.

"This could lead to some tribal citizens being required to purchase insurance or face penalties even though they are covered by IHS," he said in a statement to The Associated Press, referring to the federal Indian Health Service. "I am watching the situation closely to ensure that those individuals already benefiting from care through IHS continue to receive it."

The 2010 Census found that nearly one-third of the 6.2 million people who self-identify as American Indian or Alaska Native lack health insurance and that 28 percent live in poverty.

The Indian Health Service, a division of U.S. Health and Human Services, oversees a network of clinics that are required to serve all patients of Indian ancestry, even if they cannot document their federal tribal status.

One of those is the clinic in Santa Rosa, north of San Francisco, where DeRouen, 49, has been seen since she was a little girl. Molin Malicay, who directs the Sonoma County Indian Health Project, estimates DeRouen is among roughly 2,000 of his patients who would face the penalty.

"In the clinics in Central and Northern California, we see many of us Indians who are not considered Indians in the eyes of the federal government because the government itself terminated their tribes," Malicay said. "We're trying to get some of these people covered for care under Medicaid, but there is still so much confusion in the pamphlets and videos about who is Indian (that) it makes it hard to give advice."

Several members of the main tribal advisory group to the Centers for Medicare and Medicaid Services said in a recent conference call with the agency that the definition contained in the Affordable Care Act raises concerns that the U.S. could renege on its obligation to provide all people of Indian ancestry with free health care. Budget cuts already are set to reduce basic federal health programs for Indians by up to 8 percent.

Some tribal elders who favor tighter restrictions on who gets to identify as Native American see it another way.

Mychal Eaglefeathers, a 34-year-old member of the Northern Cheyenne Nation in southeastern Montana, said several elders he spoke with believe that allowing only members of federally recognized tribes to avoid the individual insurance mandate was a positive step, especially as the already strapped Indian Health Service clinics are forced to slash services.

"Especially the elders I've talked to say as long as you're recognized, fine. But if you're not federally recognized, people shouldn't get nothing," he said.

Valerie Davidson, a senior director at the Anchorage-based Alaska Native Tribal Health Consortium, estimates that about one-third of the 140,000 Alaska Native population would have to pay the health care penalty. That includes her nieces and nephews from the largely Yup'ik Eskimo region, comprised of tiny villages only accessible by plane or boat.

She raises the possibility that native people would have to get extra documentation to prove they qualify. People have historically been able to use their federal tribal blood-quantum cards to get IHS health services, but that alone is no longer enough to qualify for the tax exemption under the Affordable Care Act, she said.

In addition, many Alaska Natives who were born after December 1971 are prohibited from enrolling in their families' tribal corporations, even if all four grandparents are Alaska Native, she added.

"Are America's first people really being forced yet again to prove our Indian-ness?" she said through tears on a recent conference call with federal agencies. "Every single day in our own communities we have to fight to demonstrate that we are still here, that we do still exist. We should be believed that what your parents and grandparents say you are, you are."

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