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For months, Republicans and their amen corner have been warning "Obamacare will destroy the private-insurance market" in order to "make a single-payer, i.e. socialized medicine, system inevitable." Apparently, the conservative prophets of doom forgot to tell the nation's major health insurance companies. As it turns out, even as Republicans decry the Affordable Care Act's mythical bailout of the carriers, the insurers' CEOs and shareholders are very happy with Obamacare's prognosis for their firms.

As Sarah Kliff recently explained, "Health insurers arguably have the biggest financial stake in the exchanges' success." But as the executives running America's large health insurers look at current enrollment numbers, the demographic mix of their new customers, and their future prospects for individual, business and Medicare Advantage product lines, they are comfortable with what they see.

On Wednesday, Aetna chief executive Mark Bertolini told the audience at the J.P. Morgan Health Care Conference:

"Given the general demographics that CMS released yesterday, I'm not alarmed. They're better than I thought they would have been."
Please read below the fold for insider responses on Obamacare.

Bertolini is not alone. Despite the troubled rollout of the ACA's health insurance exchanges, the CEOs of the biggest carriers seem confident that the growing pains for what is a small part of the businesses in 2014 will be overcome. While Cigna chief executive David Cordani reassured the JP Morgan event attendees that "we're still in the early innings," CEO Joe Swedish of Wellpoint declared himself "cautiously optimistic":

"We believe that over time a lot of these bumps will work themselves out. We always expected it to have sort of a lumpiness to it, to the rollout. It's certainly become more lumpy than one would have predicted, and I don't think that's applicable to just us, that's just the nature of how this has evolved. Over time, this will work out."
As it turns out, when it comes to their stock prices, things are working out very well indeed for the CEOs and their shareholders alike.

Back in October, the New York Times explained the sunny outlook for insurers even in the face of the ACA's "10 essential requirements" for new policies and the 80/20 rule on "medical loss ratios" that some fretted would limit profits:

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.

Three months later, the carriers' year-over-year performance is even more impressive. As the chart above shows, Cigna's share price has jumped by 61 percent since January 18, 2013. Aetna is close behind at 54 percent, while Humana, UnitedHealth Group and Wellpoint all enjoyed gains exceeding 30 percent over the past year.

As Robert Reich detailed in October, Republicans had no grounds to fret over the health of the health insurers:

Last week, after the giant insurer Wellpoint raised its earnings estimates, CEO Joseph Swedish pointed to "the long-term membership growth opportunity through exchanges." Other major health plans are equally bullish. "The emergence of public exchanges, private exchanges, Medicaid expansions ... have the potential to create new opportunities for us to grow and serve in new ways," UnitedHealth Group CEO Stephen J. Hemsley effused.
Now, even for its supporters there are plenty of reasons to be unhappy with the launch of the Affordable Care Act. While the rate of growth for total American spending on health care has slowed to its lowest level in years, the prices actually charged by hospitals, physicians and drug makers remain largely opaque and unregulated. Insurers banned from discriminating based on pre-existing conditions, using "rescission" to drop coverage for the sick and imposing annual and lifetime caps have stepped up other cruel practices like "network narrowing" and policy cancellations to maximize profits at patients' expense.

Still, starting this year millions of Americans are gaining health insurance, and with it the prospect of healthier lives and financial futures. At the same time, the health insurance industry appears very healthy, indeed.

Originally posted to Jon Perr on Fri Jan 17, 2014 at 03:54 PM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Thus Obamacare is doing what it was designed to do (2+ / 0-)
    Recommended by:
    dfarrah, marykk

    Keep those bloodsuckers in the dough.

    Obama: self-described Republican; backed up by right-wing policies

    by The Dead Man on Fri Jan 17, 2014 at 04:20:02 PM PST

    •  And affordably insure millions of Americans. (5+ / 0-)

      it fitfully blows, half conceals, half discloses

      by Addison on Fri Jan 17, 2014 at 04:36:51 PM PST

      [ Parent ]

      •  We could be affordably (0+ / 0-)

        providing health care, but oh well.....

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

        by dfarrah on Fri Jan 17, 2014 at 05:55:59 PM PST

        [ Parent ]

        •  Give it a decade.... (4+ / 0-)

          ...the structure of Obamacare allows for states to pursue single-payer, and that will be shown to be an efficient model. Private insurers will have to adapt, and single-payer states will be able to rein in costs.

          Right now we've approximately the Netherlands model. We'll find a good balance, given the status quo of universal coverage, soon. Soon enough for some, no, and that's a rolling tragedy. But we're at a better place for the once-uninsured than we were 5 years ago, and 5 years from now, we'll be better still.

          We're at the crossroads between a rolling tragedy and a rolling success story. Both sets of anecdotes are real for those experiencing them, but the trajectory is positive.

          it fitfully blows, half conceals, half discloses

          by Addison on Fri Jan 17, 2014 at 06:01:19 PM PST

          [ Parent ]

    •  I've been pushing single payer--Medicare for all-- (0+ / 0-)

      for years, so it's not like I'm a huge fan of the ACA. But if you think Obama could have gotten through Congress in 2009/2010 a single payer bill which would have put hundreds of thousands of health insurance company employees out of work in the middle of the worst recession since 1929, you're writing from Colorado under the influence of some of that newly-legalized primo stuff.

  •  And we're supposed to cheer (0+ / 0-)

    yeah right.

  •  Will they campaign for Democrats? (0+ / 0-)

    The true colors for these CEOs is if they will spend $$$ campaigning for Democrats to improve the law, or they will spend money on Thugs who want to repeal it.
    What has been completely lost in this debate is the ability of Americans to get health care. People who have never been to a doctor can now see a doctor, for free.
    Single payer would have been amazing. Obamacare is still good enough though ...
    Now, let's work hard to give Pelosi the House back.

    •  I doubt it. (1+ / 0-)
      Recommended by:
      GAKeynesian

      Corporate executives are, for the most part, knee-jerk Republicans - even when the bottom line is staring them in the face. The stock market is booming - but do you see Wall Street money flowing to liberals? I'm willing to bet insurance executives will keep on watching Fox News.

      Early to rise and early to bed Makes a man healthy, wealthy, and dead. --Not Benjamin Franklin

      by Boundegar on Mon Jan 20, 2014 at 07:14:42 PM PST

      [ Parent ]

      •  They're also pragmatic bottom line people (0+ / 0-)

        They might shock you going into the next elections. If a Teahadist is nominated by the Republicans, I doubt these insurance corporations want to lose all of the business. They might try to purchase some horrible 3rd way thinking, but they aren't trying to play ACA repeal games.

  •  Invincibles (0+ / 0-)

    So much for the worry about the invincibles. One problem down for the health insurers down the road, will be new entrants, who know the exchanges could provide customers for them, at the click of a mouse.

    •  New players (2+ / 0-)
      Recommended by:
      GAKeynesian, Mostel26

      My new insurance is from a non-profit health plan company founded by local community health centers, and being administered by another health services company that has a large PPO in the northwest.  A little more expensive than the others but had the largest network.  The other plans were all restricting their networks.

  •  The scary thing? (1+ / 0-)
    Recommended by:
    GAKeynesian

    It would be one thing if all he was doing was pandering to the right.

    But, he actually believes everyone should own machine guns, that we should all be armed to the teeth, including teachers in schools.

    KOS: "Mocking partisans focusing on elections? Even less reason to be on Daily Kos."

    by fcvaguy on Mon Jan 20, 2014 at 06:13:03 PM PST

  •  And this is a good thing? (3+ / 0-)

    I'm not paranoid or anything. Everyone just thinks I am.

    by Jim Riggs on Mon Jan 20, 2014 at 06:27:12 PM PST

  •  This isn't good news (6+ / 0-)

    At least not in the conventional sense. Whatever makes insurance companies happy is bound to make the rest of us miserable. Single payer or medicare for all would eliminate that huge, blood sucking leach on the neck of our economy. Anybody remember those two ideas that never got a hearing while waving pom-poms for this Heritage Foundation written law? Of course the insurance companies are happy and making money. It was designed to make them money. I hope the ACA works but as far as I'm concerned, happy insurance companies = a loss for we, the people.

    "Given the choice between a Republican and someone who acts like a Republican, people will vote for a real Republican every time." Harry Truman

    by MargaretPOA on Mon Jan 20, 2014 at 06:28:53 PM PST

    •  It's up to us to get rid of the blood suckers. (2+ / 0-)
      Recommended by:
      GAKeynesian, MargaretPOA

      I keep hearing that 2014 is the year of major change. So, let's get rid of the incompetent capitalists whom we can not trust to

      1) provide affordable, high quality health care

      2) produce clean, safe, affordable food and water

      3) provide clean, safe, affordable housing

      4) provide clean, safe, affordable transportation

      5) provide good education

      6) provide reliable, affordable utilities

      for all the people.

      Wherever capitalists own the means for providing any of these (and you can add others) they chisel and cheat without mercy to increase their skim at our expense.

      Enough is enough.

      We cannot win a war crime - Dancewater, July 27, 2008

      by unclejohn on Mon Jan 20, 2014 at 06:45:01 PM PST

      [ Parent ]

    •  You hit the nail on the head, MargaretPOA! (1+ / 0-)
      Recommended by:
      MargaretPOA

      My new Kaiser plan is costing me 40% more,  bigger co-pays and a hike in the deductible of more than $1,800.  The coverage is not better nor more comprehensive.

      The ACA is nothing like health care in the Netherlands, despite what a commentor here says and is nothing more than a big, fat check for insurers whether you qualify for subsidies(I don't ) or not.

      Single payer is the way to go...sadly, it will never happen because the insurance companies will make sure their big payola will never end through lobbying.  

      If Liberals Hated America, We'd Vote Republican

      by QuarterHorseDem on Mon Jan 20, 2014 at 07:41:19 PM PST

      [ Parent ]

    •  The health insurance business is exactly that, (1+ / 0-)
      Recommended by:
      Mostel26

      a business.  The positives in all this is the 10 requirements that a policy must contain; without that we would continue to be screwed.  

      •  Sounds like you're defending them (0+ / 0-)

        But the FACT remains that despite a few consumer protections, this plan was written by a right wing think tank. Something else I suspect: had a President McCain or Romney signed this bill into law, even with those same protections, many of the people now defending it would be screaming bloody murder. You know it, I know it, everybody else here knows it, whether they will acknowledge it or not. Again, I hope it works because the need is there but without forcing the states to comply, SCOTUS made sure that it's doomed to failure. Private for profit access to health care is no different in my mind than private, for profit prisons and something tells me that you don't defend them as just a business.

        "Given the choice between a Republican and someone who acts like a Republican, people will vote for a real Republican every time." Harry Truman

        by MargaretPOA on Tue Jan 21, 2014 at 03:56:17 AM PST

        [ Parent ]

        •  Perhaps I'm more optimistic (1+ / 0-)
          Recommended by:
          jim bow

          because even though I know it started with the Heritage Foundation, it is the much needed start this country had to have.  The sabotage of its merits by the Repugs is outrageous, but I venture to say those who have crusaded for a reform of our health delivery system for years would have worked with them had the shoe been on the other foot.

          As one who is retired from the health field after 25 years, I am well aware of the need for a rerform that will insure the sick, healthy, wealthy and poor.  

          Is this the panacea?  No, of course not.  It is a start, and will be adjusted and reworked until it resembles more of what most people need and want.  A decade from now, as costs of premiums and health delivery levels out, we can get more of a picture of how we are doing.

          It would have been a real surprise if things had run smoothly.  This was too big a change.  SCOTUS did a disservice to the country by their ruling on Medicaid.

          I believe this to be a monumental achievement for President Obama.There are millions of Americans whose lives have changed for the better.  I believe when the dust settles, they will be in the majority.

  •  Well not at all (2+ / 0-)
    Recommended by:
    GAKeynesian, Mostel26

    a surprise that forcing people to buy a product would result in stocks rising.

    Also, off topic, there are posts here I want to Rec but, besides the diary itself, only one post in the thread has a rec/hide button.

    Health insurance is not health care.

    by Jarrayy on Mon Jan 20, 2014 at 06:31:23 PM PST

    •  Always look at the date the comment was posted ... (4+ / 0-)
      Recommended by:
      Jarrayy, Chas 981, GAKeynesian, Mostel26

      if you notice that there is no Rec / Hide button.  

      Here's why:
      More and more often, lately, DK is putting diaries on the front page that were "published" a couple of days (sometimes more, sometimes less) earlier.  Since the Rec / Hide buttons are only enabled for 24 hours after a comment is published, that means the diary will have comments that are already too old to Rec / Hide.  

      I suspect that the practical effect of the 24-hour rule is that discussions in a particular diary are less likely to drag on and on and on for days/weeks/months, etc.  

      That's especially fresh in my mind right now because I received a private message today that's a reply from a comment I posted November 7, 2013!  The guy said he couldn't figure out how to reply so he used the message function.  The reason he couldn't figure it out is because there was no Reply button.  The Reply button disappears after a period of time, too; it's much longer than 24 hours but I don't know the exact time period on this.

      They don't win until we quit fighting!

      by Eyesbright on Mon Jan 20, 2014 at 07:05:39 PM PST

      [ Parent ]

  •  What, them worry? (3+ / 0-)
    Recommended by:
    GAKeynesian, Mostel26, nextstep

    Why shouldn't they be optimistic? Their potential losses are largely covered—by guess who?

    Obamacare contains a $25 billion federal risk fund set up to benefit health insurance companies selling coverage on the state and federal health insurance exchanges as well as in the small group (less than 50 workers) market. The fund lasts only three years: 2014, 2015, and 2016.

    The government's risk management program for the insurers has three parts (the "3Rs"):
    A revenue neutral Risk Adjustment System designed to level adverse claim costs between health plans.
    A Reinsurance Program that caps big claim costs for insurers (individual plans only).
    A Risk Corridor Program that limits overall losses for insurers.
    Of the $25 billion, $20 billion is earmarked for the Reinsurance Program and $5 billion goes to the U.S. treasury.  

    First, the Reinsurance Program caps big individual claim costs for insurers––in 2014, 80% of individual costs between $45,000 and $250,000 are paid by the government, for example.

    Then comes the Risk Corridor program. Participating health plans will receive payments from the federal government in any of the following circumstances:
    The plan's costs for any benefit year are more than 103% but not more than 108% of the health plan's targeted amount. The feds will reimburse 50% of all costs in excess of 103% of the medical cost target.
    If the plan's costs are more than 108% of the annual target, the feds will first pay the health plan a flat 2.5% of the target and then reimburse the plan for 80% of their claim costs above the targeted amount––with no upside limit.

    http://healthpolicyandmarket.blogspot.com/...(Health+Care+Policy+
  •  The paradox of being an Obama hater... (2+ / 0-)
    Recommended by:
    GAKeynesian, Mostel26

    If people are truly against this "evil" healthcare program naturally they should divest themselves of any and all stock or 401 k concerns that are associated with it right??????.
    Dont hold your breath!!
    Just like when the haters were boycotting Disney for being gay friendly they still bought the stock.
    Or the folks that champion Hobby Lobby for taking a stand against contraception. Except just like every other retailer Hobby lobby is full of Chinese goods even though the Chinese state pretty much promotes abortion.
    $$$$ Talks regardless of belief.

    "Love is what we were born with. Fear is what we learned here." Marianne Williamson

    by Canadian Green Card Alien on Mon Jan 20, 2014 at 06:43:51 PM PST

  •  Insurers should feel good about ACA. The law (1+ / 0-)
    Recommended by:
    Mostel26

    provides for a bottomless, profitable subsidy by the government.  We will get to single payer eventually, however indirectly.  This is the genius of the ACA design.

  •  If you're a CEO and you like your bonus... (0+ / 0-)

    you can keep it!

  •  One would hope we could progress to single payer (0+ / 0-)

    and address all of the problems that allow the U.S. To provide the 37th best health outcomes in the world at the highest prices. Unfortunately, we will need progressives to progress.
     

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