Health Reform: Good Deal or Bad Deal for Insurance Companies?
Good deal, says Wall Street. Here’s The Associated Press, reporting yesterday on insurance company stock prices after the Senate bill cleared its first procedural hurdle:
Shares of Aetna rose $1.81, or 5.6 percent, to $34.32; Cigna gained $2.15, or 6 percent, to $37.95; Humana added $1.71, or 3.9 percent, to $45.24; UnitedHealth traded up $1.35, or 4.3 percent, to $32.89; Wellpoint Inc. jumped $2.19, or 3.8 percent, to $60.51. All hit 52-week highs, except for Humana, which was a little more than a dime short of its 12-month high.
Wellcare also rose $1.47, or 4 percent, to $38.41; Health Net rose 73 cents, or 3.1 percent, to $24.28; Molina rose 61 cents, or 2.7 percent, to $23.02; and Amerigroup rose 49 cents to $26.28. Wellcare and Health Net hit 52-week highs as well.
Nate Silver parsed these figures yesterday, reaching the verdict that they don’t necessarily mean that the industry’s profit margins would be higher under the bill, though millions more customers would increase the companies’ volume considerably. OK — fine. But it still means the industry will fare well (with more than $430 billion in government subsidies thrown in for good measure). And it still means that the task of screening claims for medical services remains in the hands of the same folks who have a perverse economic incentive to deny those claims.
These are the rewards of spending millions lobbying Congress.