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Basically the rich HMO's just got richer with this revised Obama plan. How you ask?

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December 22, 2009 – Comments (7) | RELATED TICKERS: WLP , AET , CI , WLP , AET , CI

I heard guests on Bloomberg radio driving home saying that 30 million people that can't afford Insurance currently either because they are unemployed or make too little to pay for it will get handouts by the FED. to pay for their Insurance Premiums. 

Those HMO's whose stocks fell from $100+ or $50+ to current levels of $60 or the $30's will gain another 30 million paying customers.

What initially was thought bad for HMO's is now a Bonanza of profits.

 Go figure....

7 Comments – Post Your Own

#1) On December 23, 2009 at 8:44 AM, devoish (96.00) wrote:

30 million paying customers represents 10% of the US population. the Stock price moved up that far last week. This group represents a much higher percentage of the "uninsurable" than the people they already have. There is also the issue of caps on payouts. The insurers can no longer "cap" what they payout if you get sick. That will lead to higher costs or lower profits.

The good news is that the people who have been paying expensive premiums for policys that do not provide healthcare  will no longer be subsidizing policys that do actually provide healthcare.

You know, like high rate/high fee credit cards used to subsidize low rate/refund cards.

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#2) On December 23, 2009 at 9:02 AM, Eudemonic (61.29) wrote:

The economic law "when you subsidize something, the price rises" still holds. In the long run, as long as the subsidy is there, these companies will prosper and their services will dwindle. It will be a direct transfer of wealth from taxpayers to insurers. Since the policy holder is not directly paying the premium, insurers have will have no incentive to be accountable.

A recent example is the price of a college education. Once the federal gov't began underwiting student loans, tuition rates sky rocketed.  The same will happen in health insurance.

 

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#3) On December 23, 2009 at 9:45 AM, devoish (96.00) wrote:

Eudemonic,

Yes, the cost of a premium will go up. A "socialized" or "nationalized" Single Payer healthcare system would have provided restrictions on executive pay, (lower than the Presidents) and eliminated dividend payouts. We did not get that option which gives the executives at private insurers the option of using subsidys to provide more healthcare options to their customers or increase their own paychecks or those of healthcare providers of some combination of all three. It also gives them more upfront cash to invest in the hope of defraying costs, investments guaranteed against failure by the US Government, a very risky proposition for taxpayers.

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#4) On December 23, 2009 at 9:48 AM, devoish (96.00) wrote:

I should have said "investments guaranteed against failure and losses by increasing premiums and/or the US Gov't".

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#5) On December 23, 2009 at 12:13 PM, guiron (26.14) wrote:

A recent example is the price of a college education. Once the federal gov't began underwiting student loans, tuition rates sky rocketed.  The same will happen in health insurance.

Yeah, but if you look at Medicare and the VA, the government actually runs those with much better efficiency than any private insurer or provider group,  by a long shot. Subsidizing insurance companies is not a good long-term solution, but the status quo of healthcare in the US is unsustainable and unique in the developed world for its high prices and poor quality.

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#6) On December 23, 2009 at 12:16 PM, guiron (26.14) wrote:

BTW, in most of the developed world higher education is paid in full. We wouldn't be having discussions about tuition increases if we were more like them.

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#7) On December 24, 2009 at 11:41 PM, alexxlea (46.58) wrote:

I love America. But America is a shithole in a lot of ways. Health care is mentioned. So is education. We have some strange system where we have been hell-bent on diverting the best resources away from the general public to those who pay.

 

If we're going to continue to lag behind even non-industrialized nations in a lot of ways, then we might as well start admitting the fact that we don't care about a more equal and free society, we just care if the rich get all the benefits the world can afford them.

 

And yes, the poor subsidize the rich through cheap labor, a market for products and services, and a willing constituency who is willing to throw away any chance at a better future because they're stuck in the 80's on some stupid "hot-button" issue (Oh my god I hate the terms idiots use to describe idiotic things) that should have been buried and shoveled decades ago and can't be bothered to WAKE THE FREAK UP AND REALIZE THAT THEY AREN'T EVER GOING TO BE THAT SUPER SUCCESSFUL RICH DUDE DRIVING A BENTLY so they should VOTE AND ACT ACCORDINGLY.

 

Dear god we've let corporations steal our remaining chances to work with dignity, steal our chances to put someone who isn't a freaking prop in high offices, and steal every last ounce of our energy in their desire to dominant every last corner of our lives. I literally can't open my eyes without getting hundreds of visual and aural reminders that THEY OWN YOU.

 

Ralph Nader recently wrote a new book on some of this stuff, I mean I haven't read it, just two reviews on it, but I have to agree with him on having that broken utopian dream in my head.

 

I literally prayed for a decade that we would come to our senses. But when our nation just fell into the trap that it did without putting up a fight, dooming my children and their children to a dimmer future, my heart was broken. Day by day I was losing hope, but I mean come on... we could have had a much better path out of this, and we chose to cheat and take the shortcut that leads to a cliff.  Also, watching shows like the one where they open the suitcases of money, and seeing those people's faces... man... Here you go, .01 case. The winner is you.

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