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Healthcare Answer for fmahnke



December 10, 2009 – Comments (4) | RELATED TICKERS: UNH , ANTM , AET

Health insurance is basically a profitable business model, although far too complicated for me to analyse individually. I have made choices based upon the recommendations of the TMF (UNH), Legg Mason, (AET) and Fairholme funds (WLP).
I am long the larger players in the sector because they have helped write healthcare reform policy. There is almost nothing bad for their business models in the proposals moving through Congress. The only prce controls being talked about expire before 2011 if they even get included.
Medicare for low income people might be expanded to include age 50 and above. This group (older and low income) is relatively expensive and shifting their burden onto taxpayers through medicare will not hurt insurers. Medicare is fast becoming a Federally subsidized for profit industry. Mandated and taxpayer subsidized insurance for more Americans will also help insurers because the insurers set the premiums to be profitable weather the new enrolees are young and healthy or not. The loss of premiums during the economic downturn is also a good thing for insurers because they have collected the premiums and are now free of the liability. As people get back insurance it will be at higher individual premiums or higher employer backed premiums.
On the expense side the difference between what insurers pay Doctors and what those Doctors would like to be paid is only growing. It is not collusion, it is just using the same programs.
They are the financial gatekeepers of 8% of GDP and growing.

4 Comments – Post Your Own

#1) On December 10, 2009 at 10:17 AM, carcassgrinder (34.01) wrote:

If anyone thinks that insurers, drug companies or medical professionals will make any less money through the "final" bill, they are delusional.  Everything in DC is set up to appease large corporate influences....even if it is spun to the public as if they are cracking down.

Cynical, yes.

True, most likely. 

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#2) On December 10, 2009 at 10:21 AM, Bamafan68 (97.72) wrote:

Carcass, if you think that medical professionals will NOT make less money with the final bill, you are delusional.  Doctors's inflation adjusted incomes have been taking serious hits for the past 2 decades; this will only accelerate the process.

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#3) On December 10, 2009 at 10:38 AM, carcassgrinder (34.01) wrote:

I'm sorry, I should have clarified...the medical services industry will not make less money (Hospitals, Practices etc.).  I do not believe for a second that doctors, hospital CEO's, or practices will make any less...only more.    I believe we will start to see wages in general nursing drop.  The medical industry will separate it's respective classes like any other capitalist system...where eventually a small select group will reap the lions share of income and the bulk of those employed in the field will have their wages pressured down to "competitive" levels.

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#4) On December 10, 2009 at 5:28 PM, fmahnke (65.67) wrote:


One more question.  I understand that people are forced to go on Medicare or forfeit Social Security. If this is true, how will it now?

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