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Some states running their own ObamaCare exchanges may be illegally using federal dollars to keep them afloat, according to a new warning from a government auditor. The inspector general for Department of Health and Human Services (HHS) said officials must better inform states about the purpose of the grants to prevent them from improperly using the money to prop up their health insurance exchanges. (Ferris, 4/29)

Small businesses are among the most vulnerable to steep cost increases in healthcare coverage if the Supreme Court rules against ObamaCare, according to new data from the Urban Institute. In addition to the 7.5 million people who could lose their insurance subsidies if the Obama administration loses the case, nearly 3.5 million people on small-business plans would also face “substantially” higher premiums, Linda Blumberg, senior fellow for the Urban Institute, will tell a Senate panel on Wednesday. (Ferris, 4/29)

To understand how the health law is supposed to fix the mediocre, overpriced, absurd medical system, you could read wonky research papers on bundled payments and accountable care organizations. Or you could look at what’s going on at Baptist Health System in San Antonio. ... Baptist made money doing what used to be industry heresy: reducing patients’ use of the medical system. The hospital group made a deal with Medicare, the huge government program for seniors, as part of an ambitious array of experiments authorized by the Affordable Care Act. (Hancock, 4/30)

When Congress reauthorized federal funding for the state-managed Children’s Health Insurance Program for two years in April, it did not address a so-called family glitch that could jeopardize coverage for nearly 2 million children, according to state CHIP directors and children’s health advocates. As funding for the program expires in 2017, families of children now getting health insurance through CHIP will have to find policies on the state and federal exchanges established by the 2010 health care overhaul. (Evans, 4/29)