So is HCR good for the people and bad for insurance companies? A picture.

[Statistical]

Cigna (CI) 1 year chart (up another 2% today)

More telling is chart over last month (as it became obvious the Senate bill with specific details would be used)



12% gain in 30 days while the overall market has been flat.

Health Care Reform = scary for insurance companies (especially w/ public option on table)
What ultimately passed = good for insurance companies (16 million forced customers).

Not all "HCR" are created equal. A strong public option open to everyone with subsidies for the poorest among us would have KILLED profits for big Health Insurance companies. What passed. Not so much.

[ixion]

1. Ironic... there is illegal code in your image

much like the bill.

[Statistical]

13. Yeah I fixed it now. DU is picky about what dynamically generated images it allows.

[OhioChick]

25. LOL

:rofl:

[Dawgs]

2. It's possible that it could be good for both.

:shrug:

[Lerkfish]

12. its possible that I am secretly rich.

but I"m not.

[Political Heretic]

14. It's possible that my crotch smells like Jesus

But I doubt it.

[Johonny]

28. Of course

The two aren't mutually exclusive.

[high density]

3. Most stocks have gone up in the past year

Did you not recall the low about a year ago?

[Statistical]

6. Notice the downward trend from September to November.

That is when it looked like HCR might actually help the consumer.

As things got worse and worse the stock rallied.
Ironically in February when it looked like we would have no "reform" stock gave back some only to charge ahead in March as 16 million forced customers looked like a reality.

Since September the S&P is up 8%, CI is up 19%. Doubling performance of the market in that last 6 months.

[still_one]

4. That is because the 40 million uninsured will now be insured, so short term it means they

have more customers

The best evaluation I have seen is of this is from David Frum:

"It’s hard to exaggerate the magnitude of the disaster. Conservatives may cheer themselves that they’ll compensate for today’s expected vote with a big win in the November 2010 elections. <...>

No illusions please: This bill will not be repealed. Even if Republicans scored a 1994 style landslide in November, how many votes could we muster to re-open the “doughnut hole” and charge seniors more for prescription drugs? How many votes to re-allow insurers to rescind policies when they discover a pre-existing condition? How many votes to banish 25 year olds from their parents’ insurance coverage? And even if the votes were there – would President Obama sign such a repeal?

We followed the most radical voices in the party and the movement, and they led us to abject and irreversible defeat. <...>

So today’s defeat for free-market economics and Republican values is a huge win for the conservative entertainment industry. Their listeners and viewers will now be even more enraged, even more frustrated, even more disappointed in everybody except the responsibility-free talkers on television and radio. For them, it’s mission accomplished. For the cause they purport to represent, it’s Waterloo all right: ours."

http://www.huffingtonpost.com/2010/03/22/health-care-reactions-fir_n_507753.html

[merh]

5. do you think the numbers change or the numbers go up

because of folks like you who say this will result in profits for the insurance industry? Does your position cause folks to invest in the industry to enjoy those predicted profits?

And tell me, if this is so good for the insurance companies, why did they oppose it?

[Statistical]

10. They opposed it the same reason Republicans did...

to water it down so much that it was ineffective.

A strong public option available to everyone and with subsidies for lower income would have KILLED the insurance industry. It would have put a cap on potential profits forever. Also it would allow even people who are currently happy with their insurance a "backup plan". If insurance companies tried to squeeze another nickle or dime out of customers eventually they would get fed up and shift to the PO.

The current "reform" not so much.

CEO of Aetna was on CNBC this morning (listen to it on my commute). He was talking about expanded earnings (which is nice way of saying profit) due to the fact that 16 million new people will be required for the first time to be "responsible" and accept cost of their own health (his words not mine).

His only problem with the bill? It doesn't do enough to cap costs. He says more work needs to be done for consumers to feel "full cost of health care". i.e make it expensive enough and people will use it only when they absolutely have to.

[merh]

15. They opposed even the water downed version

They still are spouting gloom and doom about it. If it would bring about the windfall they wanted the naysayers would not have been so loud.

Is the bill perfect? No.

Is it a beginning? Yes.

Does it do any good? Yes.

Can it be improved? Yes.

Will it be improved? Yes.

[Statistical]

17. Grandstanding.

Extremists are more likely to get elected. People who compromise are seen as weak. The Republicans played their part. It was the "moderate" Dems who actually forced the legislation to be more watered down. The loud Republicans simply provided cover.

Now everyone can go home and campaign on it.

Republicans can campaign on the socialist takeover of Healthcare (which would be funny if it wasn't so scary).

Moderate/Conservative/Blue Dog Dems can run on how the fought hard to get "sensible reform (no public option, no single payer).

Liberal Democrats can campaign on this bill like it is the second coming of FDR, New Deal 2.0.

Everyone wins.

[merh]

18. But the bottom line is that the health insurance companies do not like

the idea that the federal government is now involved in their business.

They (insurance companies) have escaped regulation for years and they liked it. To them this is just the beginning and they are right.

[Statistical]

19. Well stock price suggests otherwise.

Ignore the 1 year chart. In last 30 days the market has been essentially flat.

Health Insurance companies prices exploded 12% in less than a month. As the bill got closer and closer to being finished investors liked what they saw more and more.

Also the govt ability to regulate with corporate special interests is very limited.

Our highly regulated finance industry?
Our highly regulated mortgage industry?
Our highly regulated energy industry? (Enron)
Our highly regulated drug industry?

Sure it isn't a 100% pure super win for the Insurance companies but weigh and measure everything and investors seems to think that the gains outweigh any of the costs.

[merh]

20. The insurance companies would be escatic, boasting how this is

a win for them and the citizens. They would be bragging about how great this will be for them so that more and more and more will invest.

They ain't doing that because it isn't that great for them.

It is the beginning of government regulation in an industry that hasn't been regulated by the feds for over half a century.

The investing is happening because of folks like you, the ones that think it will be a boom for an industry that hates it.

[Political Heretic]

27. ...

http://www.politico.com/blogs/bensmith/1209/Insurance_industry_insider_We_win.html

[Statistical]

30. Another one.

NC insurer praises health care overhaul bill
http://www.bostonherald.com/jobfind/news/healthcare/view/20100322nc_insurer_praises_health_care_overhaul_bill/srvc=home&position=also

Legg Mason's Miller: Health Care Stocks to Outperform (overall stock market)
http://www.cnbc.com/id/35980524

Yup they just seem terrified of 16 million forced customers to add to the ranks.
Terrified I tell you.

Insurance companies are simply a middle man. They take the cost of the health care add 5% and charge that to the consumer. Nothing in the bill changes that. If the underly cost of health care goes up the premiums go up (and their 5%-10% gets fatter). If you add another 16 million people then total revenue goes up and profits as a percentage of that goes up too.

Eliminating lifetime caps, and pre-existing condition limitations makes the system fairer but that burden won't be borne by health care companies. They will pass that cost onto the end consumer. The pain just gets spread around a little bit.

Even "better" a substantial number of new participants will be subsidized so that is a direct transfer of wealth from governments coffers to shareholders.

[merh]

21. I think you need to look at what passed before reaching your

sweeping and very flawed conclusions.

Sec. 102. Ensuring value and lower premiums. Amends the Public Health Service Act to require health insurance issuers in the small and large group market to meet a medical loss ratio of not less than 85%, effective for plan years beginning January 1, 2010. Directs the Secretary to require that plans in the individual market also meet a medical loss ratio of not less than 85% so long as it does not destabilize the existing individual market. If plans exceed that limit, rebates to enrollees are required. In determining the methodology for the medical loss ratio, the Secretary is to design it to ensure adequate participation by issuers, competition in the market, and value for consumers.

...

Sec. 104. Sunshine on price gouging by health insurance issuers. Establishes an annual review process for increases in health insurance premiums by the Secretary of HHS in conjunction with the States that requires insurers to submit a justification for any premium increases prior to implementation. Effective for plan years beginning January 1,2010.

[Statistical]

22. Most insurance companies already has medical loss ratio of 85% or higher.

That is a nice way of saying "only" 15% gross profits. Aetna gross profits last year were 5%. Do you really think a cap on 300% growth in profit margin combined with 16 million people forced onto the rolls is *really* going to hurt them.

[merh]

23. Apparently they believe it will hurt them.

They are not celebrating the win.

[Statistical]

24. Actually CEO of Aetna was on CNBC this moring.

He indicates they will see stable earnings (doublespeak for profits) for next couple years. Earning growth won't accelerate until 2014 in his opinion.

Why 2014?
Oh yeah that is when 16 million Americans will be forced to buy insurance or pay a fine/tax.

Executives rarely "gloat". They have a fiduciary responsibility and can be held liable (by investors) for forward looking statements they make that are untrue.

[Raineyb]

29. Everyone wins except the public

The insurance companies will continue to bankrupt them with the backing of our government.

[Warpy]

7. There's good and bad for both

but what will eventually put the nail in the insurance company coffin and turn them back into responsible companies is extending Medicare eligibility.

The insurance companies are actually quite good about providing Medigap insurance. They just suck when it comes to providing the whole package.

[tridim]

8. Wall street is betting that Cigna et al will play ball with the new laws

It's up to Cigna to decide if they want to survive as a regulated business. Continuing to raise rates and cut services is tantamount to corporate suicide at this point.

Let's check back on these numbers in a few months.

[Statistical]

9. Why?

Rates will continue to rise even CBO estimate indicates that.

The only difference is of the 30 million uninsured it is estimated about 16 million will be forced into private insurance.

[tridim]

11. Have you taken Econ 101?

[Statistical]

16. Have you?

What highly regulated industry are you using as a model.

The highly regulated banking industry?
The highly regulated mortgage industry?
The highly regulated drug industry?
The highly regulated tobacco industry?
The highly regulated cable industry?

[Political Heretic]

26. Laughed out loud so hard someone out the window yelled at me....

:thumbsup: