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On News Of Senate Finance Committee Negotiations, Health Insurance Stocks Soar
If you're wondering what all those health insurance lobbying dollars funneling into Washington were really buying, check out this article.
Shares of U.S. health insurers rose broadly on Tuesday on hopes a health reform bill would not include a government-run option, which has drawn strong opposition from insurers who fear it would destroy the private marketplace.The S&P Managed Health Care index of large U.S. health insurers closed 6.5 percent higher.
Aetna rose 12.6 percent, Coventry was up 12.7 percent and Cigna was 7.7 percent higher, all on the New York Stock Exchange. Centene rose 7.9 percent.
Via Firedoglake. That was less than 24 hours after the Associated Press broke the long-expected news that the Senate Finance Committee would not endorse a government-run health insurance option. And it may be evidence that the market doesn't regard co-operatives as particularly dangerous competitors to major insurers.
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Josh
Matt
Eric
Brian
Yup. Investors know exactly what the Blue Dogs are up to, even if the press is too fucking stupid (or in the tank) to figure it out.
But I remain hopeful that we can get a decent bill as long as progressives in both houses stick to their guns and make it crystal clear that they'll kill any bad bill.
July 29, 2009 11:39 AM | Reply | Permalink
(or in the tank)
^^this^^
July 29, 2009 11:40 AM | Reply | Permalink
Cha-ching! Ring the cash register Wall St!
Pricks.
July 29, 2009 11:46 AM | Reply | Permalink
I just want to point out that Wall Street doesn't exactly have a sterling record of evaluating risk in the short term. A one day spike in stocks really doesn't mean anything.
Which is not to say that we shouldn't worry or stop lobbying Congress. I'm just saying that a bunch of investors and hedge fund managers who live day by day may not necessarily understand the implications of what's going on in DC any better than the rest of us.
July 29, 2009 11:50 AM | Reply | Permalink
They don't have any better insight into the final outcome than anybody else- in that respect they're just gambling, which is what they do after all. But they have plenty of accurate insight into the fact that the crap the Senate Finance committee is working on is very good for insurance companies.
July 29, 2009 11:53 AM | Reply | Permalink
Absolutely. But we have no idea whether the Finance Committee's bill is going to bear any resemblance to the final bill that makes it to Obama's desk. So really, the only thing this story tells us is that Wall Street recognizes the Finance Committee's bill is a handout to insurance companies (which we already knew) and enough investors thought other investors would be trying to buy those stocks in order to make a short term profit that they ought to get in too. The headline is infuriating, but there's no new information here.
I suppose if Baucus tries to sell the result to us and say that it's true health care reform, we can all point to what happened on Wall Street as a counterpoint. Other than that, though, I'm just not going to get worked up about this.
July 29, 2009 12:00 PM | Reply | Permalink