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And what place might that be?  In the money, is where.

The notion that the ACA has finally reined in the cost of health insurance is naive.  Private health insurers have been soaking people for generations and they are expert at gaming the regulations.  The regulations and controls imposed by the ACA will be no exception, especially considering that the insurers helped to write the law.  They are Obamacare's and Obama's ghost writers.  Maybe that's what Palin meant by death panels.

I've said before here that if you have any doubt about the insurer's ability to make money even under the seemingly tough rules imposed by the ACA - e.g., taking people with preexisting conditions or limiting the medical loss ratio - just take a look at the price of their shares since the ACA went into effect.  And now, the New York Times has noticed too.

... from the financial perspective of the health care industry, Obamacare, as the law is often known, doesn’t seem much of a hindrance.

In fact, it may even turn out to be positive.

uh oh
Because they face new regulations intended to broaden coverage and limit profit-taking, some analysts have been concerned that profits will suffer. But in the run-up to the Affordable Care Act, stock market prices have told a different story.

Over the last 12 months, shares of the top five publicly traded health insurance companies — Aetna, WellPoint, UnitedHealth Group, Humana and Cigna — have increased by an average of 32 percent, while the Standard & Poor’s 500-stock index has risen by just 24 percent.

Strong profits in the current year, as growth slowed in overall health care costs, is one probable explanation for the outperformance by the group.

Another is the growing expectation that payments from new customers required to buy insurance under the Affordable Care Act will offset costs from new regulations.

Let's talk understatement here.  Stock prices don't beat the averages when holding your own is the expectation.
Mark T. Bertolini, the Aetna chief executive, said recently: “We continue to believe that public exchanges can represent a longer-term upside opportunity.”

And most health insurers are forecasting earnings growth after the health care law is fully in effect.

David Cordani, Cigna’s chief executive, said his company’s average annual earnings per share would grow 10 to 13 percent over the next three to five years.

Yep, some good things for Americans, but the cake and the box it came in goes to the insurers.  Yes, millions will be getting health insurance for the first time.  How long the price of those policies are affordable is another question once the insurers get around to their old tricks.  The same is true for how long the ACA will keep the growth in healthcare costs.  

The ACA is not a step toward single payer health insurance.  Just the opposite. The ACA has locked US health insurance into a private system for generations.  With the government paying the private insurers what the people can't afford, why shouldn't Wall Street see health insurance companies as a good bet for the future.

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Comment Preferences

  •  Tip Jar (17+ / 0-)

    The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

    by accumbens on Sun Oct 27, 2013 at 05:58:06 AM PDT

  •  Taking Wall Street investors as a bellwether (4+ / 0-)
    Recommended by:
    Cedwyn, tk421, thomask, ssgbryan

    is a bad idea. After all, these are the people that supposedly "lost" forty trillion dollars in the 2008 collapse.
    Letting regulated insurance companies administer the distribution of dollars for health-care is consistent with the Republican penchant for letting private enterprise suckle at the public teat. Also, since insurance is an enterprise that's been traditionally supervised by the states, there was lots of resistance to having the federal government do more than dispense dollars and collect revenue to keep the current flowing.
    If the Congress has been a reluctant participant, that's largely because they suddenly realized that another large pot of money was going to escape their minute control, robbing them of the opportunity to allocate dollars to insure their own continuation in office.

    •  Wall streeters (2+ / 0-)
      Recommended by:
      shaharazade, RFK Lives

      knew what they were doing during the crash.  They knew they were betting against their customers and creating worthless assets.

      The banks have a stranglehold on the political process. Mike Whitney

      by dfarrah on Sun Oct 27, 2013 at 08:15:45 AM PDT

      [ Parent ]

      •  Well, the CDOs and re-insurance products were (0+ / 0-)

        worth less than the worthless dollars themselves simply because they weren't backed by the credit of the American public.
        The mortgages turned out to be fraudulent because all of the participants, sellers and buyers and middlemen, were engaged in deception. However, the land and houses do have some value, albeit not what was claimed. The people whose labor went into constructing them were glad to have been paid. Though, in some instances the mortgages were bad because craftsmen had not been paid and had placed liens on the properties.

  •  Given that the Great Democratic and (11+ / 0-)

    Progressive Triumph of the Twenty-First Century is -- oops -- an invention of the Heritage Foundation first implemented by Mitt Romney, I hardly see how this should be surprising.

    Tipped and recced.

    Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

    by corvo on Sun Oct 27, 2013 at 07:26:27 AM PDT

    •  In 2017 you'll get your chance for single payer (0+ / 0-)

      in your State, if you're willing to put in the hard work for it. Was that in the Heritage Foundation Mitt Romney plan?

      •  you mean (7+ / 0-)
        if you're willing to put in the hard work for it
        if you can defeat the vested interests calling the shots in both parties.

        Fixed that for you. :-)

        Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

        by corvo on Sun Oct 27, 2013 at 08:43:48 AM PDT

        [ Parent ]

        •  Don't be defeated from the beginning. (0+ / 0-)

          If modern Liberalism is, "I asked, my work here is done." it's won't accomplish anything. The path to single payer is going to be a journey, not a romantic one day revolution some November. You can work toward single payer or wait for it; I choose to work for it.

    •  Tell that to a family in the Medicaid expansion... (1+ / 0-)
      Recommended by:
      housesella

      ...group (millions of families).

      Or to owners and workers in independent micro-businesses like those of Pike Place Market (pdf), one of Seattle's symbols and its #1 tourist attraction.

      The 2007 survey linked above found that only 19% of people working at the Market got health insurance through their place of work. Another 42% (my wife among them) were insured through other means (spouse, government program, etc.) - and a full 39% of the people sustaining that urban jewel in a progressive ultra-blue city, were uninsured.

      Go on my friend, tell people like these across the US that Obamacare is a shame because Romney did it first, and because it's not single-payer (which I too support).

      •  No, it's a shame because it is a conservative plan (2+ / 0-)
        Recommended by:
        corvo, aliasalias

        that locks us into a private insurance system probably long after most on this blog are dead.

        The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

        by accumbens on Sun Oct 27, 2013 at 11:53:20 AM PDT

        [ Parent ]

      •  you're not my friend n/t (0+ / 0-)

        Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

        by corvo on Sun Oct 27, 2013 at 11:55:06 AM PDT

        [ Parent ]

  •  The S&P is up "only" 24% in a single year? (3+ / 0-)
    Recommended by:
    corvo, shaharazade, Sunspots

    That's a bubble, folks.

    I'm living in America, and in America you're on your own. America's not a country. It's just a business.

    by CFAmick on Sun Oct 27, 2013 at 07:50:16 AM PDT

  •  If VT and CA succeed, others will follow (5+ / 0-)
    Recommended by:
    puakev, claude, MRA NY, thomask, Box of Rain

    As long as Vermont and California succeed with single payer, other states will follow and eventually so will the nation.

    ------
    Ideology is when you think you know the answers before you know the questions.
    It infests hollow spaces where intelligence has died.

    by Alden on Sun Oct 27, 2013 at 07:52:54 AM PDT

    •  exactly (1+ / 0-)
      Recommended by:
      Alden

      This is only the first step.  The insurance companies/wall street see this as a truly long term growth. Unfortunately, they are so stupid they have forgotten how to correctly calculate long term growth bcs all they know how to calculate now is short term growth (read, next QTR or next Month, maybe next Year), but this is it.  

      They arent taking into account all the new health COOPs that go into effect and are allowed to grow to statewide penetration.  These non-profit INS companies are going to drive down the cost of insurance dramatically and there are WAY more of them now.

      Before ACA there were only 4-5 real non-profit INS companies still around and they were pretty small, being relegated to regions of certain states.  Most of the older ones had been purchased and turned into for profit behemoths (BCBS for example). Now almost half the states have a COOP that has started and will grow (24 states i think).  That's 24 new non-profits that will be directly competing against for-profits in the federal exchange.  

      Their profits are not going to last very long and it will be hilarious.  These COOPs are going to be going for efficiency like Medicare.  If they can get up to just 90% Medical loss ratio, they will end up smoking the for profit companies on prices and quality of service.  Remember, the law only makes companies hit 85% MLR, but Medicare has a 97% MLR, one of the most efficient in the world.

      This will be fun to watch.

      --jake

  •  "Reined," as in horses. (5+ / 0-)
    Recommended by:
    claude, TopCat, accumbens, Sunspots, cheerio2

    Not "reigned," as in kings and queens.

    Thanks.

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Sun Oct 27, 2013 at 07:57:20 AM PDT

  •  perhaps it will be as people wake up (1+ / 0-)
    Recommended by:
    aliasalias
    The ACA is not a step toward single payer health insurance

    "Tax cuts for the 1% create jobs." -- Republicans, HAHAHA - in China

    by MartyM on Sun Oct 27, 2013 at 08:19:06 AM PDT

  •  So what? (1+ / 0-)
    Recommended by:
    Assaf

    I don't care a bit if the insurance companies make money as long as people have good affordable coverage that they can't lose.  Bringing more people into the system will hopefully help achieve that.  

    Also, medical insurance is now a regulated commodity and will consistently be under political scrutiny.  This fact alone will help hold down abuses.  The insurance companies don't have the cover of obscurity anymore.  

    Meanwhile, my Vanguard Health Care Industry sector fund is up 29 percent year-to-date.  Think I'll buy some more!  

  •  Single payer's not going to happen so long as (2+ / 0-)
    Recommended by:
    cheerio2, wasatch

    70% of Americans still have private insurance, 80% of them are satisfied with such coverage, and 57% still prefer a private based health insurance system.  http://www.gallup.com/...

    However, I recently spoke with the broker for our health insurance policy at my place of work, and she predicted glumly that it was inevitable that insurers will eventually drop out of the exchanges because they're not profitable enough, but since people will by then have grown accustomed to having coverage, the government would have to keep providing them coverage somehow or risk political repercussions.  And that, according to our broker, would lead to government opening up Medicare to folks willing to buy into it.

    To be clear, our broker is not some Obamabot, she works for Blue Shield and is not a fan of the law because of the very scenario she explained to me - that it would inevitably lead to some kind of government option.  That is how Obamacare may lead to single payer, or at least get us closer to that goal.

    "Those who have wrought great changes in the world never succeeded by gaining over chiefs; but always by exciting the multitude." - Martin Van Buren

    by puakev on Sun Oct 27, 2013 at 08:24:32 AM PDT

    •  I wish I had a dollar... (1+ / 0-)
      Recommended by:
      Mr Robert

      for everything a broker told me that turned out to be nonsense.  They are repeating the same propaganda they hear from the people they broker for.  

    •  Can not allow buy in to Medicare (0+ / 0-)

      Then we would be back to the sick buying in for good coverage, and the well opting for cheap, skimpy coverage.  The system cannot work that way.  Everyone must be in the pool.

      I support Medicare done right For All.  Second best would be private insurance run as a strictly regulated public utility.

  •  But for the fact that (0+ / 0-)

    the annual growth of national health expenditures and per-capita health expenditures (including out-of-pocket and health insurance costs) have been at or near historic lows in 2009, 2010, 2011, (projected)2012, and 2013, you would have a point.

    •  Which would suggest that the ACA didn't do it? (3+ / 0-)
      Recommended by:
      Sunspots, aliasalias, lostinamerica

      If it was going down in 2009 - that was before it kicked in at all.  And in the early years was slowly being implemented.  In any case, my point is that in time insurance premiums will rise much to the benefit of the private insurers.  They will find a way.  They always have/

      The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

      by accumbens on Sun Oct 27, 2013 at 09:23:42 AM PDT

      [ Parent ]

    •  BTW, does (or will) measures of per capita costs (0+ / 0-)

      include government subsidies or just the cost to consumers?

      The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

      by accumbens on Sun Oct 27, 2013 at 09:24:56 AM PDT

      [ Parent ]

      •  According to the second document linked (0+ / 0-)
        The health spending projections were based on the National Health Expenditures released in January 2012. The projections include impacts of the Affordable Care Act.
        which I assume include government subsidies.
        •  Projections? Not actual spending? And how could (0+ / 0-)

          the ACA be credited for what happened in 2009?  And I wouldn't assume anything about the accounting.

          The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

          by accumbens on Sun Oct 27, 2013 at 11:57:35 AM PDT

          [ Parent ]

    •  In MA, where we have had our own mandated (3+ / 0-)
      Recommended by:
      accumbens, Assaf, aliasalias

      healthcare((RomneyCare) for the last 8 years we had seen double digit premium increase (private and public) each year until last year when our Governor capped the maximum allowable increase to a single digit. Last year my premium went up by 9%..

      I am reviewing my benefit options for next year. Our rates are going up by 6%. 1.25% is for fees associated with the Affordable Care Act, the remainder is due to inflation and usage of care. My optical plan is also changing due to the ACA and means another small increase of a couple bucks a month.

      The experience here in MA is that predicated costs and expected saving were not accurate. We have seen average double digit increase since the mandated plan went into effect.

      •  Important information. I wonder though... (0+ / 0-)

        ...whether there is a fundamental different between a single average-population-size state doing it - which certainly cannot affect the nationwide healthcare-cost market - and when the entire nation does it.

        Here's hoping...

        •  I've read quite a bit of anaylsis about things (3+ / 0-)
          Recommended by:
          Assaf, barkworsethanbite, aliasalias

          Here in MA but I'm not going to win any Mensa awards anytime soon.

          However I can give you my gut feel. Cost have not be contained. I have a family plan, 3 daughters and a wife. My premium will be going from about $475/month this year to >$500/month in January. As I mentioned in my early post, I've seen an average of double digit increase for the last 8,
          [ I don't have out of pocket expense off the top of my head but we pay about  a grand for contact lenses/year for 4 and ~$350/year for glasses. Optical exam are $110. Dental cost are another issue. While the dental insurance helps it is limited,
          I just had two teeth extracted because frankly, the $$ in the budget to save them was not there. I had on e$66 copay at the dentist who referred me to the orthodontic surgeon ($70 copy) for the extraction.  Since it is near end of year and my dental plan coverage is largely used up, I will have to see how much of the procedure I will get hit up for.

          That stats show that the plan*RomneyCare has been very effective in increasing the number of insured.  I think we have about 98% of residents with insurance.  However stats seem to indicate those purchasing it may not be able to afford it based on the low number of co-pays for Dr visits and prescriptions and the the fact that MA has one of the highest rates where people use the ER as primary healthcare stop of any of the states.

          While I have no answers, adding million more into this system with public funding does not seem like a solution to making insurance affordable

  •  Also look at insurance exclusions (0+ / 0-)

    I've been reading that the exchange policies don't cover things like cancer, etc. - that when they are cheaper, that is why.

    •  Don't cover cancer, etc.??? (0+ / 0-)

      After you've eliminated cancer, I'm not sure what the etc.   is.  

      You are obviously reading some abject nonsense. Upgrade your reading.  

      •  Here's one link (3+ / 0-)
        Recommended by:
        accumbens, aliasalias, lostinamerica

        http://www.nakedcapitalism.com/...   added bolding is mine

        "Bending the “cost curve” in this way appears to also bend “the care curve”

        As you can see from my results, the most under-represented specialties (on the left) are the ones that typically provide services to truly sick patients, such as oncology, cardiology, internal medicine, neurology. And no doctor specialty has more than about 75% representation on the Exchange provider networks. Hospitals are also included on the right of the graph. Their numbers are diminished in the Premera Exchange plan network via excluding specialty hospitals that are crucial to good care in this region, such as Children’s Hospital and the Seattle Cancer Care Alliance.

        Quasi-Medicaid
        What we’re seeing has been described as a quasi-Medicaid level of doctor access. I would have little problem with plans that “streamline care”. But using Premera as a case in point along with reading about left-out doctors and hospitals all over the nation, I see a pattern of drastically reducing access to care for the sickest patients. This is a method for insurers to subvert the mandated yearly patient out of pocket maximums, (as well as the loss of insurers’ ability to cap lifetime maximum payouts) by making access to expensive care difficult or impractical, especially for the poorest and sickest patients. And by limiting tax subsidies to Exchange plans only, I believe the Democrats wrote their law deliberately to let insurers do this."

        •  Oh, the insurers are good, very good at subverting (2+ / 0-)
          Recommended by:
          aliasalias, lostinamerica

          the regulations.  That is their true expertise - not health insurance.

          The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

          by accumbens on Sun Oct 27, 2013 at 11:59:34 AM PDT

          [ Parent ]

        •  This is about networks, not coverage (1+ / 0-)
          Recommended by:
          housesella

          Yes the insurance companies are pushing people into narrow networks; they have been doing that for years.

          But this does NOT mean that cancer or anything else is not covered.  

          The implications of the networks is a whole other discussion, but it does not mean that you are not covered, only that you might have to seek your treatment within the network.    Treatment within a network is a heck of a lot better than no treatment at all.  

  •  Diarist falling into trap of concern trolls. (0+ / 0-)

    It is way premature to know whether the broad Obamacare launch will be a boon for insurers, or force them work harder actually providing care to a less "insurance-easy" patient population at lower margins.

    If anything, the evidence so far points towards the latter: since 2012 insurers have been forced to send refund checks whenever not enough care was provided, on average. And it's been happening: ordinary Americans receiving nice refund checks from insurance companies.

    IOW.... this is the classic Concern Troll trap:

    Invoke criticism from the supposedly progressive angle, and broadcast it at a time not relevant for reality on the ground - but certainly relevant politically, because it is simultaneous with the most massive assault from the right.
    Sorry. Not tipping or rec'cing.
    •  And you fall for the propaganda methinks. (2+ / 0-)
      Recommended by:
      aliasalias, lostinamerica

      Those reimbursements are peanuts compared to what they make in profit.  You're probably happy with the "big" settlements that Wall Street firms are paying for the crash and other shenanigans.  Drops in a bucket.

      The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

      by accumbens on Sun Oct 27, 2013 at 12:01:16 PM PDT

      [ Parent ]

  •  Can't say I disagree with this (1+ / 0-)
    Recommended by:
    housesella

    However, the ACA is helping people.  And, I think the best thing ACA has done for long term reform is get rid of the preexisting condition underwriting and rescission.  Even if the ACA fails and is repealed, people are NOT going to want to repeal the preexisting condition and rescission provisions in the ACA.  So then we'd be left with insurers not being able to sustain policies for the individual insurance market without gov't subsidies, because of those provisions.  Those provisions would effectively destroy the individual health insurance market.  And if there is no individual insurance available, enough people will be outraged that there will have to be a solution.

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