# So how does the Healthcare Insurance Industry feel this fine Monday morning? **URL:** \ **Category:** Great Debates\ **Created:** [March 22, 2010, 1:26pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330 "2010-03-22T13:26:12Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Lightnin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lightnin/32/180_2.png) [@Lightnin](https://boards.straightdope.com/u/Lightnin)\ **Post date:** [March 22, 2010, 1:26pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/1 "2010-03-22T13:26:12Z")
Over the last few weeks as the anti-reform hysteria reached new, breathless heights, one of the standard arguments against the bill has been that it’s a blank check for the Insurance industry. Since everyone will be forced (at gunpoint!!!1!) to have insurance, the industry execs will be swimming in piles of money… and they’ve actually been lobbying to get this bill passed. So how true is this? Are the insurance execs cackling with glee now that their seeds of evil have borne bitter fruit? It seems to me that it’s got to be a Pyrrhic victory, at best. Sure, they’ve got guaranteed customers… but now they’ve got to insure _everyone_. No more cutting customers off when they get to be too expensive, and no more denying coverage. And now, of course, they’re completely in bed with the government… Are they doing a happy dance, or not? ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [March 22, 2010, 1:41pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/2 "2010-03-22T13:41:03Z")
If they’re happy I’ll eat my hat. If this takes effect then it’s not that far to a full public option and a non-industry providing of insurance. ---
**Author:** ![wolfman](https://avatars.discourse-cdn.com/v4/letter/w/a8b319/32.png) [@wolfman](https://boards.straightdope.com/u/wolfman)\ **Post date:** [March 22, 2010, 1:44pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/3 "2010-03-22T13:44:37Z")
I’m really damn curious about this myself. I got a message on Friday about a possible job from a good recruiter, But I didn’t get back to him in time before he left the office. I left him a message early this morning, and he left one back with me. Just found out the job is at a health insurance company. I am really curious what the passing will do to their hiring plans they had on Friday. Could be good, could be bad, panic batten-the-hatches time for them. ---
**Author:** ![Trom](https://avatars.discourse-cdn.com/v4/letter/t/958977/32.png) [@Trom](https://boards.straightdope.com/u/Trom)\ **Post date:** [March 22, 2010, 4:11pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/4 "2010-03-22T16:11:40Z")
If you accept publicly traded healthcare providers’ stock prices as a proxy for how they “feel”… They feel very, very [good](http://finance.yahoo.com/echarts?s=IHF#chart2:symbol=ihf;range=1y;compare=%5Egspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined). Even compared to the S&P 500 over the past year which itself had a gigantic rally, they feel absolutely fantastic. The IHF is an exchange traded fund that tracks the [U.S. Healthcare Providers Index](http://us.ishares.com/product_info/fund/overview/IHF.htm). ---
**Author:** ![overlyverbose](https://avatars.discourse-cdn.com/v4/letter/o/9dc877/32.png) [@overlyverbose](https://boards.straightdope.com/u/overlyverbose)\ **Post date:** [March 22, 2010, 4:32pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/5 "2010-03-22T16:32:33Z")
In the short term anyway, all these health insurance companies should theoretically be hiring - a lot - to support the influx of additional people. Plus, while insurance companies will probably not be able to raise premiums a ton, the government is giving individuals tax rebates for buying insurance, but I don’t think they’re forcing insurance companies to _lower_ premiums (yet), though I’m guessing they’ll at least have to cap them and offer a standard defined benefit, similar to the Medicare model. And, many people who don’t have insurance don’t have it because they don’t yet need it (at least, that’s true for many young people who don’t have it), so I think the idea is that with a healthier population now required to have health insurance, companies will make more in the short term until their population ages and/or sickens, which is probably one of the reasons for encouraging preventive care by making it free (I think the preventive care will only apply to Medicare-eligibles for now). As for hiring, the regulations are coming out; however, the federal government will probably be releasing sub-regulatory guidance soon that will require quite a bit of implementation. Using Medicare as a model, companies will need: Marketing personnel to comply with new marketing guidelines (CMS considers policy info “marketing,” including things like your huge policy book, summary of benefits/annual enrollment guides, etc. Reporting specialists (including claims, prescription drug data, medical use, etc.) IT infrastructure Grievances, appeals, pre-auths, other utilization management specialists Benefits specialists Fraud, waste & abuse specialists Network contracting specialists Added contacts with drug manufacturers Coordination of benefits personnel Added legal personnel and lobbyist relationships And, assuming that private companies will be providing the State Insurance Exchanges, they’ll need to staff up for that and will have to figure out how to coordinate with Medicaid. There are also tons of other ways insurance companies, state programs, corporate assistance programs and other organizations will have to coordinate. It’ll be interesting to see what happens and how things go with respect to implementation. Plus, with the recent ruling that companies can be considered persons, I wonder how that’ll effect the healthcare companies lobbying Congress. The government itself will also need a ton of additional people to handle things like call center, review marketing for compliance, perform audits on health plans, create and clarify policy, check networks, etc. As someone who helped implement several Part D plans during the initial launch of the program, this is kind of a wet dream for me - so much to learn and so complicated, which I love. It seems like there’s so much opportunity (for now, anyway) to learn and provide expertise. There’s also a lot of opportunity for failure, though. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [March 22, 2010, 4:37pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/6 "2010-03-22T16:37:21Z")
About getting 30 million + new subscribers, all of them mandatory? The companies feel great about that. Having to pay out more on the fraction of policies that do cost them? Not so great, but they’re still probably ahead. Strengthening the possibility of single payer eventually? A long time off, they’ll work something out if they need to. Remember, the bill that was just passed is pretty much what \*they and the Republicans \*wanted back when Clinton looked like he was going to get something more. ---
**Author:** ![wolfman](https://avatars.discourse-cdn.com/v4/letter/w/a8b319/32.png) [@wolfman](https://boards.straightdope.com/u/wolfman)\ **Post date:** [March 22, 2010, 10:34pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/7 "2010-03-22T22:34:40Z")
> [@overlyverbose](#): > > In the short term anyway, all these health insurance companies should theoretically be hiring - a lot - to support the influx of additional people. > … > IT infrastructure > … That makes me happy :), I am quite glad to hear it. ---
**Author:** ![marshmallow](https://avatars.discourse-cdn.com/v4/letter/m/df705f/32.png) [@marshmallow](https://boards.straightdope.com/u/marshmallow)\ **Post date:** [March 22, 2010, 10:52pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/8 "2010-03-22T22:52:22Z")
> [@ElvisL1ves](#): > > Strengthening the possibility of single payer eventually? A long time off, they’ll work something out if they need to. Single payer will be forever politically untenable for this reason. For it to occur in the US would require, well, not a revolution, but it would probably be a cleverly named era with capitalized letters. ---
**Author:** ![wolfman](https://avatars.discourse-cdn.com/v4/letter/w/a8b319/32.png) [@wolfman](https://boards.straightdope.com/u/wolfman)\ **Post date:** [March 22, 2010, 10:55pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/9 "2010-03-22T22:55:29Z")
> [@marshmallow](#): > > Single payer will be forever politically untenable for this reason. For it to occur in the US would require, well, not a revolution, but it would probably be a cleverly named era with capitalized letters. I could see it happening with a slow creep of Medicare downward in age. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [March 22, 2010, 10:57pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/10 "2010-03-22T22:57:37Z")
> [@OverlyVerbose](#): > > In the short term anyway, all these health insurance companies should theoretically be hiring - a lot - to support the influx of additional people. > … > IT infrastructure > … And that would imply premium increases. ---
**Author:** ![ladyfoxfyre](https://avatars.discourse-cdn.com/v4/letter/l/ad7895/32.png) [@ladyfoxfyre](https://boards.straightdope.com/u/ladyfoxfyre)\ **Post date:** [March 22, 2010, 11:07pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/11 "2010-03-22T23:07:11Z")
> [@Sam\_Stone](#): > > And that would imply premium increases. Why would it imply premium increases for existing patients, rather then just the increased revenue due to the fact that many more people will be buying insurance than before? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [March 22, 2010, 11:12pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/12 "2010-03-22T23:12:58Z")
> [@Trom](#): > > If you accept publicly traded healthcare providers’ stock prices as a proxy for how they “feel”… > > They feel very, very [good](http://finance.yahoo.com/echarts?s=IHF#chart2:symbol=ihf;range=1y;compare=%5Egspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined). Even compared to the S&P 500 over the past year which itself had a gigantic rally, they feel absolutely fantastic. > > The IHF is an exchange traded fund that tracks the [U.S. Healthcare Providers Index](http://us.ishares.com/product_info/fund/overview/IHF.htm). That is probably a bad sign for the rest of us. Oh, well . . . ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [March 24, 2010, 6:21am UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/13 "2010-03-24T06:21:17Z")
> [@Trom](#): > > If you accept publicly traded healthcare providers’ stock prices as a proxy for how they “feel”… > > They feel very, very [good](http://finance.yahoo.com/echarts?s=IHF#chart2:symbol=ihf;range=1y;compare=%5Egspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined). Even compared to the S&P 500 over the past year which itself had a gigantic rally, they feel absolutely fantastic. > > The IHF is an exchange traded fund that tracks the [U.S. Healthcare Providers Index](http://us.ishares.com/product_info/fund/overview/IHF.htm). Thanks for that lead. It seems to me though that the IHF index has tracked the S&P 500 pretty closely since January 20, when the probability of health care reform was at its lowest following the Democrat’s electoral loss in Massachusetts. > **[Google Finance - Stock Market Prices, Real-time Quotes & Business News](https://www.google.com/finance/)** > > Google Finance provides real-time market quotes, international exchanges, up-to-date financial news, and analytics to help you make more informed trading and investment decisions. (Click SP500 for a comparison, and hit YTD to get the year to date figure. Then play with the bottom scroller. Between Jan 1 and Jan 20, the IHF index did gain relative to the S&P 500, for reasons that are unclear.) Bonus question: will HCR destroy the economy? A: The stock market doesn’t think so. Here I plot the probability of Obamacare as measured by Intrade, against the S&P 500. The two series have a .75 correlation coefficient – it’s positive. Now that particular statistical test is highly problematic, but if HCR was an economic disaster, one would think that the relationship would be the opposite. Instead, we get a chart like this one: [![](https://s139.photobucket.com/albums/q288/forgoodmeasureM4M/?action=view¤t=ObamaCareOddsVsSP500.png) ](https://s139.photobucket.com/albums/q288/forgoodmeasureM4M/?action=view¤t=ObamaCareOddsVsSP500.png) The stock market has risen since ~Feb 8. The odds of Obamacare started to rise around Feb 19. I’m not saying the 2 are related though: I’m saying that Wall Street greets HCR with a yawn. ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [March 24, 2010, 6:42am UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/14 "2010-03-24T06:42:17Z")
Agree in the short term good, long term bad. Even if we never get a single payer type system, this bill starts moving us towards a situation where basically everyone buys into more or less the same risk pool, with particular levels of standardized coverage being required. But managing all the complexity that comes along with seperating people by risk, trying to avoid covering high-risk members and offering a dizzying array of varying levels of coverage is basically the only services that Health Insurance companies provide. Without a need for that management, there really isn’t much of a reason to have Health Insurance Companies, at least in their current form. So a decade or two out, companies like Cigna will have much smaller staffs, much smaller profit margins (because its hard to justify taking much of a profit if you don’t provide many services) and basically much less to do. Thats why I think the Insurance Companies ended up turning against the reform bill when it started to look vulnerable, even though in the short term it seemed like a decent deal for them. ---
**Author:** ![The\_Great\_Philosopher](https://avatars.discourse-cdn.com/v4/letter/t/3ec8ea/32.png) [@The\_Great\_Philosopher](https://boards.straightdope.com/u/The_Great_Philosopher)\ **Post date:** [March 24, 2010, 6:51pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/15 "2010-03-24T18:51:44Z")
Major health insurance stocks fell about 2% when the bill passed, even though the markets were up overall. Ezra Klein also posted up a memo given by consultants to WellPoint (I think) which said that the bill would hurt them badly, because their specific business model put a lot of emphasis on making profits from the individual markets, which will now be much more heavily regulated (other insurance companies, by contrast, didn’t stand to lose so much). I’ve never heard anyone call it a giveaway to the insurance industry, where did you hear that? Big Pharma maybe, but not the insurers. The insurance companies definitely opposed the bill, but at the same time they didn’t oppose it too fiercely - they do get a huge new customer base after all. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [March 24, 2010, 10:17pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/16 "2010-03-24T22:17:08Z")
> [@ElvisL1ves](#): > > Remember, the bill that was just passed is pretty much what \*they and the Republicans \*wanted back when Clinton looked like he was going to get something more. It’s scary that this long after FDR, the left considers a modified Nixon plan a victory while Nixonites (pretend they?) are against it. ---
**Author:** ![The\_Great\_Philosopher](https://avatars.discourse-cdn.com/v4/letter/t/3ec8ea/32.png) [@The\_Great\_Philosopher](https://boards.straightdope.com/u/The_Great_Philosopher)\ **Post date:** [March 24, 2010, 10:32pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/17 "2010-03-24T22:32:41Z")
> [@foolsguinea](#): > > It’s scary that this long after FDR, the left considers a modified Nixon plan a victory while Nixonites (pretend they?) are against it. It’s scary how little policy actually matters to US politicians. If John McCain had won the election and proposed this exact reform bill - which is not inconcievable, given that it’s basically modeled after moderate Republican proposals - you can bet a lot of Republicans who are currently screaming about it being “socialism” and “totalitarianism” would have voted for it, and a lot of Democrats hailing it as the best legislation for decades would have voted against it. It’s actually quite depressing the more you think about it. ---
**Author:** ![Lightnin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lightnin/32/180_2.png) [@Lightnin](https://boards.straightdope.com/u/Lightnin)\ **Post date:** [March 24, 2010, 10:38pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/18 "2010-03-24T22:38:36Z")
> [@The\_Great\_Philosopher](#): > > I’ve never heard anyone call it a giveaway to the insurance industry, where did you hear that? I’ve seen it mentioned all over the place on sites such as Digg and Reddit- usually, of course, coming from the same people who called it “socialism” a few weeks ago. I’m not real clear on how something can be socialism AND capitalism at the same time, but there you go. In the runoff between Coakley and Brown, it came out that the pharma and healthcare insurers threw Coakley a [fundraiser](http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Coakley-in-trouble-Pharma-and-HMO-lobbyists-to-the-rescue-81067542.html)right before the election, and some are saying that it was a clear sign that they wanted Coakley to win so that she’d vote for the healthcare reform act. Personally, I’m of the opinion that it was just the healthcare industry trying to get her to vote against it, because they knew that if Brown won, he (as a Republican) was \*guaranteed \*to vote against it. Coakley, at least, would only \*probably \*vote for it. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [March 25, 2010, 9:23pm UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/19 "2010-03-25T21:23:57Z")
> [@The\_Great\_Philosopher](#): > > It’s scary how little policy actually matters to US politicians. Well, for many in the media & probably many in the legislatures as well, the bizness of politics is more about personal politics than about policy. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [March 26, 2010, 2:30am UTC](https://boards.straightdope.com/t/so-how-does-the-healthcare-insurance-industry-feel-this-fine-monday-morning/533330/20 "2010-03-26T02:30:33Z")
> [@The\_Great\_Philosopher](#): > > I’ve never heard anyone call it a giveaway to the insurance industry, where did you hear that? Firedoglake was one of the few lefty outlets to be so in favor of the public option as to recommend opposition to the Affordable Care Act. [Sample post](http://fdlaction.firedoglake.com/2010/03/03/health-insurance-industrys-300-billion-victory-over-the-public-option/). > [@](#): > > Major health insurance stocks fell about 2% when the bill passed, even though the markets were up overall. Ezra Klein also posted up a memo given by consultants to WellPoint (I think) … As a comparison, Wellpoint is up about 5% over the S&P 500 this year. Though starting from around Feb 10, Wellpoint has underperformed the S&P by about 6 percentage points. I think we can agree that these numbers are… not exactly catastrophic. [http://www.google.com/finance?q=NYSE%3AWLP](http://www.google.com/finance?q=NYSE%3AWLP) All that said, **Simplicito** may be vindicated: some believe that stock markets have difficulty thinking more than 3-5 years forward. Then again, so do some CEOs.