I pray the progressives wake up soon and come out of their collective slumber before we help the Democrats pass a health insurance bail out.
The reforms championed two years ago, that rested largely on providing Americans with a Medicare-like plan, open to all takers, has morphed into Romney Care. While the centerpiece progressives envisioned on health care reform rested largely on federal intervention via program, the Democrats have cleary gone the less contentious route of a federal roll via regulation. The idea seems to be create a federal role, and hopefully tighten regulations later down the road, which is laughable. If you read just this short piece about the so-called "public option" from the CBO you can see this is not what progressives rallied around. Not. Even. Close. But you don't have to take my word for it, just listen to the investors.
Via the Wall Street Journal:
Why Obama's Speech Is Lifting Health Stocks
While it didn't pass any legislation, President Obama's nationwide address on health care Wednesday night was a boon to some investors.
The prospects for reform remain uncertain, but investors signaled their own views Thursday by pushing up shares of Wellpoint (WLP: 54.03, 0.15, 0.27%), UnitedHealth Group (UNH: 29.07, 0.04, 0.13%) and Aetna (AET: 30.37, +0.52, +1.74%), the three largest managed care health-insurance providers. Managed-care stocks fell last spring on their decline in profitability and Obama's election. But each company has seen double-digit gains in the last three months as the prospects for a large government insurance program diminished. Obama’s address Wednesday didn’t change investor’s sentiment. snip
But BMO Capital Markets analyst David Shove says the markets now back some kind of reform, and are voting with their wallets. "The president spoke and the stocks went up," Shove says. "Normally, until recently, when the president has spoken, those stocks went down. Managed care and a lot of health-care names have been trading on [the belief that] reform wins." Coffina says reform talk has acted as a brake, and now that's being released. "Now, on fundamentals, the larger companies are pretty cheap, we think," he says.
Shove says the price-to-earnings multiples of several managed-care stocks could rise from their now-depressed levels once the health-care issue is settled in Congress "[Investors] will go back to the normal three questions: What's the price, what's the cost and how many members are you going to have?" he says.
While managed care pricing is alright, and insurers have adjusted to higher medical costs, the weak economy could soon assert itself on the industry. "Membership is horrible," Shove says. "Because Americans are not working. Also, investment income has dropped. It used to account for about 20% or more of revenue, now it's 10% or lower."
While political deal making continues and Wall Street takes a back seat to Washington, Coffina says investors still have a chance to profit from the health-care debate. "On a valuation basis, based on likely legislative outcomes, we think there's a significant enough margin of safety, especially for UnitedHealth and Wellpoint, that they're cheap enough -- relative to what's likely to happen -- that it's worth the risk."
The public option is a a nice shiny distraction. The Democrats have managed to bail out just about every fat cat who can hold a fund raiser. What about us? Where's our bail out?
George McGovern tells you how easily the Democrats can achieve universal health care with one single sentence:
But what seems missing in the current battle is a single proposal that everyone can understand and that does not lend itself to demagoguery. If we want comprehensive health care for all our citizens, we can achieve it with a single sentence: Congress hereby extends Medicare to all Americans.
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We recently bailed out the finance houses and banks to the tune of $700 billion. A country that can afford such an outlay while paying for wars in Iraq and Afghanistan can afford to do what every other advanced democracy has done: underwrite quality health care for all its citizens.