Goldman Sachs: Insurance Stocks Would Drop 36% by 2019 with House Public Option

[kpete]

Goldman Sachs: Insurance Stocks Would Drop 36% by 2019 with House Public Option
By: Jane Hamsher Friday November 13, 2009 8:01 am

Pretty interesting. Goldman Sachs evaluates the impact of the Finance Committee health care bill, the House bill and no bill on the value of insurance stocks over the next 10 years. They focused on the impact of Wall Street’s biggest insurance stocks: Aetna, UnitedHealth, WellPoint, CIGNA and Humana.

The best scenario for the insurance companies is doing nothing:

The study’s authors advise that if no reform is passed, earnings per share would grow an estimated ten percent from 2010 through 2019, and the value of the stock would rise an estimated 59 percent during that time period.

The second best scenario, which they use as a “baseline” and which they give the best chance of passage, is the Senate Finance bill:

The Senate Finance Committee bill, which Goldman’s analysts conclude is the version most likely to survive the legislative process, is described as the “base” scenario. Under that legislation (which did not include a public plan) the earnings per share for the top five insurers would grow an estimated five percent from 2010 through 2019. And yet, the “variance with current valuation” — essentially, what the value of the stock is on the market — is projected to drop four percent.

Their “bull scenario” is the Senate bill “watered down”:

The next best thing for the insurance industry would be if the legislation passed by the Senate Finance Committee is watered down significantly. Described as a “bull case” scenario — in which there is “moderation of provisions in the current SFC plan” or “changes prior to the major implementation in 2013″ — earnings per share for the five biggest insurers would grow an estimated ten percent and the variance with current valuation would rise an estimated 47 percent.

more:
http://www.huffingtonpost.com/2009/11/12/goldman-to-private-insure_n_355998.html

more:
http://fdlaction.firedoglake.com/2009/11/13/goldman-sachs-insurance-stocks-would-drop-36-by-2019-with-house-public-option/

[sinkingfeeling]

1. So? Why should 45,000 Americans die each year to maintain profit?

[prolesunited]

11. +1 million

What sick fucks.

[amitten]

2. Well, time to invest in different stocks then. Too bad, guys. n/t

[rucky]

13. The Free Market only applies to gains - not losses.

silly.

[enid602]

3. Incredible

Incredible that Goldman sachs would mention only this as being an important result of HCR.

[Aramchek]

4. too bad!

[Kalyke]

5. Boo hoo.

:nopity:

[Buns_of_Fire]

6. Not nearly enough.

Here's the way it works, Goldman ol' buddy... Stocks go up. Stocks go down. Buy low. Sell high. Sometimes you win. Sometimes you lose.

Whazzamatter, Goldman ol' buddy? Don't like the Free Enterprise system?

Next, we'll be hearing that insurance companies are "too big to fail" and deserve a couple billion just because the CEOs are just such swell people and they dress nice...

[Ozymanithrax]

7. So what's the bad news?

My step father always told me that Al Capone invented the insurance agency, and he was the most ethical and moral leader the industry every had.

[MNDemNY]

8. But of course you know that NO bill on the table has a robust PO.

Not one that would capture the majority of newly insured.

[SpartanDem]

15. Still the majority of the newly insured would get it from the government

out of the 36 million in the house bill 15M are headed to medcaid, 6M to the public option that's 21 M or 60%. That means about 15M new customers for insurers, but they come with a lot regulations that are bad for their bottom line. This just further proves that doing nothing is best thing for them.

[MNDemNY]

22. NOT SO !!

[SpartanDem]

25. That's not what the CBO says

[MNDemNY]

34. They would get it through the "exchange" only a small percentage of those would in the PO.

[Vinca]

9. Boo freaking hoo.

[aquart]

10. Oh. What a dreadful shame. Dear me. Tant pis.

When will they drop 100%?

[Javaman]

12. And there it is...

is our government is rife with ex-goldies, is it any surprise we are getting sold a bill of goods on the public option?

same as it ever was.

the rich get richer and the poor have babies.

[renate]

14. that is the saddest thing I have ever heard

Poor insurance companies. People who want affordable health care for everyone have absolutely no compassion.

:cry:

[librechik]

16. It's the New Normal--shut up and eat your gruel like the rest of us

as if--

[City Lights]

17. Boo fucking hoo.

:nopity:

[tridim]

18. They've had decades to fix their own problems, now it's too late.

The trigger was pulled years ago.

[jasi2006]

19. Good! Time to divest. Thank what that will do to the stocks now.

Idiots!

[jtrockville]

20. I'd like to see insurance industry stocks drop 100%

Do away with these parasites.

[moondust]

21. Investors first!

Seems to be Rule #1 in all this. Congress is apparently unwilling to further narrow the already limited investment choices available to fat cats with a lot of time on their hands.

[EnviroBat]

23. Good.

Jump You Fuckers!

[Statistical]

24. But wait according to some on DU the HCR is a giant corp giveaway?

[Festivito]

26. Oh! So, let us give our child, parent, and own lives to Goldman Sachs' 36%!

Why should we deserve to live if Goldman Sachs would lose, gasp, 36%?

Let us pay twice as much for even less health care!

All hail Goldman Sachs, our most important entity, above even our own lives and even the above the lives of those we love.

:sarcasm:

[whatchamacallit]

27. Idiot republicans are scared terrorists are coming to NY

The biggest terrorist organization I can think of has been operating out of New York for 140 years.

[Junkdrawer]

28. Say. You don't think that GS is trying to pressure the Senate to water down HCR...more...

:think:

[donheld]

29. What percentage would that stock dive with Single Payer?

Bring it on!

[Marr]

30. Can't we just label these people terrorists and seize their assets?

I mean really-- this isn't the first time they've subtley threatened to crash the economy if their political will isn't done.

[lpbk2713]

31. And that's supposed to be a BAD thing?

Fuck em. Payback is hell.

[HughMoran]

32. Damn, you mean they won't drop 100%?

Insurance companies should be happy we're allowing them to survive at all. The usual crime for murder is a death sentence.

[neverforget]

33. .......

:nopity: :cry:

[ipaint]

35. Second choice it is.

Insurance exchange may have loophole
'A leak in the system'
Insurers could draw healthy people out of new markets


By David S. Hilzenrath
Sunday, November 15, 2009



"It's a leak in the system," said Karen L. Pollitz, a professor at Georgetown's Health Policy Institute. "It returns you to problems that we have today."

...For example, the bill written by the Senate health committee would not require insurers operating outside the marketplace to provide standardized disclosures about what they cover.

It would not prohibit health plans outside the exchanges from using marketing practices that discourage the seriously ill from enrolling, nor would it demand that they offer "a wide choice" of medical providers -- including "essential community providers . . . that serve predominantly low income, medically-underserved individuals," as the bill prescribes for insurers inside the exchanges.

Perhaps the sharpest dichotomy is that, under the health committee proposal, certain standards governing the nature and extent of covered benefits would apply only to policies sold inside the exchanges.

All of those factors contribute to the possibility that insurers might offer cheaper, less comprehensive policies outside the exchanges and entice healthier people to leave the new markets. That would leave the exchanges responsible for sicker people who are more expensive to insure.

Similarly, outside the exchange, the bill drafted by the Senate Finance Committee would not regulate the marketing of individual coverage, nor would it require that health plans be rated based on quality and price.


http://www.washingtonpost.com/wp-dyn/content/article/2009/11/13/AR2009111303160.html

[ipaint]

36. Looks like a mandate plus an exchange they can use as a dumping ground

for those they can't legally cherry pick.

GS wins.

[SpartanDem]

37. Somebody might want to give Micheal Moore this report