Stock Prices Rise as Congress Funnels Money to the Insurance Companies
Author: ReasonablyConcerned Published Under: Politics
If you were at all unsure of how important corporate interests are to our politicians, how big of an influence the insurance lobbyists have, and who the majority of our politicians really work for, all you need do is look at the stock prices of some of the publicly traded health insurance companies.
When the great healthcare debate first began, well this year anyway, it was started with ideological hopes of making a real change to the way health care is handed out. A public option seemed like it might actually have a chance of passing and it looked like we might be able to pry the well being of the sick from those whose only goal is to make a dime and have found that the best way to do this is to deny care. It looked like the United States might actually catch up to the rest of the civilized world, where people do not face bankruptcy or death when they get ill.
Growing Momentum
Health Care Reform has been a talking point for some time, arguably decades, but in terms of the Obama Administrations spearheading of health care reform, it began in the beginning of March 2009 when Obama held a summit on health care, which stated the importance of meaningful change to the health care industry.
The health care reform issue would continue to gain attention, with the debate reaching its crescendo in August. It was in August, that the public option began to truly take hits, but it would hang on and still be a part of the Health Care Reform Bill that was passed by the House of Representatives on November 7, 2009, narrowly avoiding defeat in a vote of 220-215.
After being passed in the House of Representatives, the bill traveled to the Senate, where many senators had already spoken out saying there would be no way a public option would be passed. It was actually considered common knowledge that upon reaching the Senate, the public option would be killed.
After over a month of debate in the Senate, most of which went on in private, it was announced that the public option was dead and people without insurance would be mandated to buy into private insurance, with a few meaningless changes that make it only slightly more difficult to deny someone for a preexisting condition, yet still allowing the companies to pretty much do as they will.
So What Has the Health Care Debate Done to Stock Prices?
We live in what is billed as a free market economy, although this is in many ways a misnomer, however that is another debate. So, one of the leading indicators of political trends is the stock prices and in terms of health care reform, the stock prices of publicly traded insurance companies.
Almost overnight after Obama announced the need for health care reform at the international summit, stock prices at most publicly traded insurance companies plummeted.
At WellPoint(WLP), which includes such giants as Blue Cross and Blue Shield, stocks dropped from around 40 on February 25, 2009 to around 30 points during the first few days of March.
At Humana Inc.(HUM,) stock prices dropped from around 40 points on February 25, 2009 to around 20 points during the first few days of March.
Aetna Inc. (AET,) Assurant Inc. (AIZ,) CIGNA Corp. (CI,) Coventry Health Care Inc. (CVH,) and AMERIGROUP Corporation (AGP) all saw similar plummets in the first few days of March.
Stock prices at most publicly traded insurance companies would slowly begin to rise again for the next few months, only to drop again across the board in August, when the debate about Health Care Reform reached its peak.
After August, when it became clear that the public option was on shaky ground in the senate and might not even make it out of the house, stock prices again began to climb at these companies.
Since November, when the health care reform bill moved from the House to the Senate, where again the public option was Dead on Arrival, stock prices at these companies has been on the rise, with pretty much all companies reporting a 25% increase.
So Who is this Bill Really Helping
Using the stock prices as a metric, it is clear that health care reform is a blessing for the Insurance Companies.
With millions of Americans on the brink of being forced to buy insurance, without making any real change to the system, the insurance companies are basically being handed millions upon millions of new customers. So, of course insurance stock seems to be a safe bet.
To top it off, with more than four years until the bill will go into effect, the Insurance Companies have plenty of time to raise premiums with virtually no regulation, so when they get their new guaranteed customers, they will be sitting pretty, ready to keep on making a killing. Already, several companies have raised premiums by 10% this year alone.
The Sad Truth
The sad truth is that the majority of our politicians have been bought and paid for, handing out billions of dollars to the banks and then following it up with a bailout to the insurance companies. Rather than addressing the core problems with health care, our politicians continue to take money from the insurance company lobbyists and hand them a bill that guarantees they can pretty much continue carrying on as before, with only token changes that don't really do anything to prevent them from denying care or bankrupting people.
Black and White
I think it is important to note that this is not a Democrat or Republican thing and people from both parties are complicit in this transfer of wealth. It is amazing that in a world where nothing is black and white, NOTHING, so many people try actually buy into the propaganda that there is an actual difference between the Republicans and Democrats. In the end, they both answer to the same people, and it is not You or I, but the corporate interests who fund their campaigns.
Many people have bought into this view so heavily, they make the argument that the bill must be passed, so the Democrats can save face and not loose seats in the coming election.
Unfortunately, this is a dangerous and disingenuous approach that does not actually benefit the people. Supporting something that is not in the best interests of the people, solely to save face, is not the right decision, ever. The lesser of two evils is still evil.