Not one to wish any more misfortune on the American people, but we know we are screwed when health care stocks — health care insurers and pharmacy benefit manager stocks — are on the rise following Step 1 in the Senate’s race to health care reform.
The economy is on everyones mind. We are all awaiting the recovery. It has not reached my neighborhood yet. Most economists have said that the stock market is the leading indicator of economic recovery. Thanks to the Senate deleting any public options from the proposed bill health care stocks are seeing a rise. Well, damned if you do. Damned if you don’t.
Again, thanks to the Senate for making sure that the fundamentals of capitalism and the free market are allowed to run rampart and health related stocks are on the rise. The economy may be looking better on Wall Street but for those who are uninsured with pre-existing conditions things are looking pretty grim this holiday season.
We are not opposed to captialism when the playing field is level at the beginning. In the case of health care reform we can only assume that lobbyists for insurers and pharmaceuticals reached the senators on the right side of the isle and some on the left. All the leading indicators are looking good.
The real problem is that most of us are in the “lagging indicator” group — unemployed, uninsured, or in the diminishing middle class who have taken pay cuts and cuts in work hours to cling to a half-assed employer provided insurance program that will at least get the insured through the hospital doors.
According to Reuters:
“All in all, relative to the last version of health reform issued by the Senate, things have turned out pretty well for the health insurance industry,” said Carl McDonald, an analyst at Oppenheimer. “In particular, all versions of a government-run health plan have largely been eliminated.”
What is making the stocks rise?
The original Senate bill taxed the health insurance industry a fixed $6.7 billion a year. Under the new proposal, the industry would face a $2 billion tax in 2011, with increases over time to $10 billion in 2017.
Analysts said the new proposal would allow insurers time to factor the tax into pricing. [emphasis added]
And, let us not forget that the government is now mandating insurance coverage. Of course, we all need insurance but until we see it in practice we are skeptical. The insurance will have plenty of new clients due to the mandate and they have plenty of time to raise the premiums before the taxes really kick in.
Let’s see. You and I will soon be required to purchase insurance, but not before the insurers have time to raise the premiums. Does that sound as if it is helping you or me? Maybe I don’t get it but it seems to me that we are being required to support those private insurance companies increase their profits.
Before anyone mentions that there is a cap on the percentage of profit an insurer can take, let me remind you that with a potential 30,000,000 new customers they are still sitting fat. I can’t feel sorry for them.
If all goes well, the insurers and pharmaceutical companies will be popping the champagne corks on Christmas Eve and New Year’s Eve. The rest of us — well, now we know why “they” refer to “us” as Joe Six-Pack.
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