"Why Health Insurance Shareholders Are Loving Obamacare"

[applegrove]

Why Health Insurance Shareholders Are Loving Obamacare

by Peter Suderman at Reason.com

http://reason.com/blog/2014/09/10/why-health-insurance-shareholders-are-lo

"SNIP.......................



Obamacare continues to struggle in the court of public opinion, but it’s good news for some health insurance industry stockholders, specifically the folks who have invested in WellPoint, which owns multiple insurers, including Blue Cross. Via The Washington Examiner’s Tim Carney, here’s a research note from Seeking Alpha titled: "WellPoint Inc.: Loving Obamacare?"

WellPoint, the note says, has become a "big beneficiary of the Affordable Care Act." It’s doing well overall, and part of the reason is the "company’s Obamacare-derived good fortune." The company was doing fine before the law’s coverage expansion went into effect, but now it’s performing even better, the note says—and the "’special sauce’ that has made the stock soar further could in fact be Obamacare."

As Carney notes, this is not exactly the oppositional law that President Obama and other Democrats promised when the law was being debated. Rep. Nancy Pelosi (D-Ca.) described the insurance industry as "immoral" and "villains." In fact, some big insurers have turned out to be the law’s beneficiaries.

It’s not just that Obamacare includes a mandate to buy their product, and subsidies to help people do so. It’s that the law prevents insurers from taking outsize losses should claims costs within Obamacare plans come in higher than expected. The law includes a "risk corridors" program that pays 50 percent of excess expenses for costs in any plan that exceeds 103 percent of a predetermined target, and 80 percent of the excess for costs above 108 percent, between 2014 and 2017.




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[applegrove]

1. This is the conclusion.

http://reason.com/blog/2014/09/10/why-health-insurance-shareholders-are-lo

"SNIP..............

With this sort of quasi-bailout in place, of course insurance industry shareholders are going to be thrilled. The law sets up a requirement that the public buys the product, heavily subsidizes its purchase, and then protects the industry from excess losses—all at taxpayer expense. Some villains.

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[blkmusclmachine]

2. PROFIT $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

[WillowTree]

3. For the sake of clarity, Wellpoint does not "own.......Blue Cross".

That's very misleading. Blue Cross-Blue Shield is not one company and, while Wellpoint owns some of the for-profit BCBS companies, it certainly does not own all of them and it does not own any of the not-for-profit Blues.

[msongs]

4. massive giveaway to private corporations. of course they are happy nt

[SoCalDem]

5. Insurers were on the precipice

just about to start bleeding customers as Boomers graduated into Medicare..There is no mystery to me about how our new healthcare "system" has evolved..

[applegrove]

7. Bingo! I had not thought of that.

[Boreal]

12. Great point

"'d never thought of that, either. There are always so many reasons for big political and policy moves and that must surely have been a factor. Lets not forget that the Yoo Ess Ay is a corporatocracy. Public risk for private profit, corporate welfare and a snow job to sell it.

[spanone]

6. it's also good news for people with pre-existing conditions

[liberal_at_heart]

8. further making profit more and more private and risk and loss more and more public.

How much more can we distort capitalism? How far will we go?

[KG]

9. and now all americans are mandated subsidize health insurance profits

hoo-fucking-ray.

[Nuclear Unicorn]

10. Weird. I was shouted down as a RW paid troll hack for saying as much during the debate.

This was wholly predictable. In fact, it was impossible for there to be any other outcome. There's even a slush fund to pad profits during transitions such as plans being deprecated for lack of mandated coverages and employer implementation.

If the government plan relies on for-profit corporations then the government finds itself protecting corporate profits, even if the corporate model is a net loser. Taxpayer money must then be shunted to the profit line -- protecting the corporation from the consequences of its misjudgments (assuming no avarice *giggle*). There is no incentive to correct the bad model and for all we know the tax-shunting pols are stockholders.

Anybody saying anything differently is either too naïve or outright diabolic.

One day they'll learn to listen to the cynical and world-weary 20-something young woman.

[Boreal]

11. Well, we couldn't have Medicare for all

because, erm, ISIL. This is an empire and war comes first, even if we have to manufacture it.

[mythology]

13. I don't know that I buy the premise of the article, at least here in Massachusetts

Granted we have limits on the rate increases an insurance company can raise, but also in an effort to avoid the ACA's tax on fully insured groups, more companies are switching to self-insured policies which are distinctly less profitable.

Maybe it's different in states where the insurance companies are for profit.

In the name of disclosure, I do work for a non-profit health insurance company in Massachusetts, but I'm not speaking on behalf of that company nor divulging confidential information from that company.

[Vinca]

14. Look at Wall Street. Forget Obamacare, things improve under Democrats.

Then the fat cats support the GOP to save a couple of bucks in taxes, Shrub-like fools are elected, and they lose their diamond-encrusted shirts.