Sunday, January 19, 2014

Health Insurers: Whining About Socialism All The Way to the Bank

By cskendrick on January 7,2013

Not one of the major publicly-traded health insurers' stocks underperforms the S&P500 market index and hasn't since summer 2009 when we all started this very interesting conversation about how Obamacare would destroy private insurance.

The insurers are whining about how socialism is killing them all the way to the bank. Aetna, perhaps the most publicly opposed to the ACA based on its close association with one Joe Lieberman (h/t NYCeve),  bought Coventry Health in a bold move to expose itself even more to socialism. HCA went public again in 2010 an odd play for a corporation fearing market exposure in the aftermath of PASSAGE of the Affordable Care Act.  (In another bold risk management move, HCS fobbed off former chair Rick Scott onto the state of Florida.)

So that means not only the voters, not only common decency but ruthless pursuit of returns isn't on the side of 'repeal and replace'. My theory on why: Once ACA is in place, companies will no longer have to manage in-house health packages for employees. The large companies, exempt in theory from Obamacare, will voluntarily phase out their benefits on the premise that, like in every other developed country on Earth, health insurance is a conversation between the people and their public servants.

(more below the squiggleract.)

We're an increasingly multinational corporate world. Big multinationals don't like coming to America and finding out they have to pay expensive health care packages for employees that they don't have to pay for anywhere else. It won't happen fast, but it will happen faster than the 30 years it took American workers to lose their defined benefit pensions.

Now, with pensions, this was something Republicans couldn't get enough of back in the day, because it started up when 'the day' and all future ones were quite bright and rosy in GOPers' eye. The golden age of the Reagan Empire. We wear de-risking now. De-risking is cool. Which makes it all the more amusing that now it's happening under Obama's watch the same thing is evil. For how it was Cool When Republicans Did It But Socialism Now, Michael Baroneone only has to peek at the prose of Michael Barone on the topic.

Perhaps this isn't the health care world as it should be in anyone's eyes. Liberals object to setting up a system that compensates institutions and individuals that will
never stop contributing to a party that wants to deconstruct the public space. Tactically speaking, centrists/pragmatists/whatever the most awesome label is this week might want to revisit the merits as well. (And thanks for the cash in the meantime, Democrats, while we continue to hate you lots and plot your complete destruction. Love, the insurance industry.)

On the other side of the aisle I am quite sure Republicans don't like government assuming the risk, ever, and they've long since moved on to hating on the miniscule tax increases to passive investor income (a dip in after tax returns that is more than made up for by the reduced volatility in those reduced, because less risk AND over time the reduced long term liabilities to private corporations who will now be off the hook for health packages for their staff.) But... taxes. But... socialism. But... Obama gets credit if this works (but not from us). But... Duck Dynasty Sarah Palin something.

Thing is, the cray-cray crew don't have any strategy but stamping their feet and (see: October shutdown) threatening to tall OUR ball and going home. Not because of triumph of liberalism. Not because Tea People are suddenly feeling, okay, yeah, my kids have health issues and I am diabetic and my work health plan is getting ridiculously expensive and this website's not ALL that bad so I'm enrolling.

ACA is going to work because it makes a lot of already rich people and corporations even richer. Companies getting to dump trillions more of long term liabilities as they volunteer their associates into Obamacare (because freedom) is why no one's coming to the rescue of the 'Repeal and Replace' set, any more than anyone came to the rescue of first private workers' then public servants' pensions since the 1980s.

ACA is better than no ACA by far: We're not replacing socialized medicine with ACA, so this isn't quite the same as swapping out pensions with 401Ks. (So, perhaps there's a point for Barone there...if one accepts that Doing More For The American Worker Is Always Bad And Really Bad If It Makes Democrats Look Good). This is something new...and the irony is that corporations (same as with the 401K conquest of private retirement funding) are liking what they're seeing....even if they have no intention by and large of funding Democrats. (They'd rather just have less crazy Republicans, good luck with that Corporate America. Keep us posted.)

So in a nutshell: Giving the risk and expense of keeping you, the working stiff, healthy and alive back to you (with a little help from your government) is what ACA is all about. Oh, and it makes some serious coin for insurers in the meantime (see: Stock performance since 2009).

For that reason - it makes some serious loot for people who don't necessarily have a problem with socialism, only sharing it with the little people - ACA is here to stay, because it takes a LOT of risk off Corporate America's books in the long run and saves shareholders trillions, perhaps many trillions, in the bargain.

If fewer people get sick and die and bankrupt their families in the process, that's nice, but the insurers who are doing so well financially, because socialism, won't ever thank Democrats for the solid.

They'll continue whining all the way to the bank...and that, ironically, is why ACA's here to stay.

Crossposted at Daily Kos