![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/sp_en_6.gif)
Why Insurance Industry Support of Obamacare Will Be the Downfall of Insurance Companies
http://www.thedailybell.com/images/library/Hemera-m.jpgObamacare is law but that may not prevent health insurance companies from feeling considerable backlash as time goes on. This brings up questions not just about insurers’ profitability but the viability of the industry as a whole both from a professional and investment standpoint. This is something that has not been focused on much, but it should be.
Now insurers, behind the scenes, are throwing their considerable muscle toward getting Obamacare up and running. Bloomberg, for instance, tells us that “Insurers Oppose Obamacare Extension as Danger to Profits.” The article explains that “allowing Americans more time to enroll for health coverage under Obamacare may raise premiums and cut into profits.”
Extending the enrollment period would have a destabilizing effect on insurance markets,” said Robert Zirkelbach, a spokesman for the Washington-based lobbyist group American’s Health Insurance Plans.
Allowing younger, healthy Americans to sign up later, as they probably would, means less revenue for insurers counting on those premiums to help defray the cost of sicker customers, threatening industry profits. “If you can enroll at any point in the year, then you can just wait until you get sick,” Brian Wright, an analyst with Monness Crespi Hardt in New York, said in a telephone interview. “This isn’t the industry crying foul and exaggerating the issue, this is actually one of those issues where there is a well-grounded reason for the concerns.”
And this is no small matter for the US economy. According to NPR, “One in eight Americans work in health care and the U.S. spends about $2.7 trillion on it each year. Tony Carnevale, director of the Georgetown University Center on Education and the Workforce, tells Robert Siegel that the U.S. healthcare system is ‘growing like crazy.’ ”
The insurers’ dilemma, despite current growth, is a self-inflicted one. In the article, “Reuters to US Economy: ‘Our Heart Will Go On’ ” we focused on the hysteria over the government shutdown and the media’s sympathetic viewpoint toward government services generally. In fact, Reuters characterized the shutdown as a “fight with no room for compromise ...” and blamed the shutdown on the so-called Tea Party. “Minority government,” the editorial fumed. “It’s outrageous when you think about it.”
This is part of a larger dominant social theme: While the national healthcare website may be fixed, the larger legislative push is not to provide healthcare to all but rather to make the current provisions so onerous and expensive that people will cry out for a single payer system. The media’s sympathy toward big government will make this meme an active and persuasive one.
Government bigness and its necessity is surely a growing dominant social theme, but it is one that a significant portion of the US population doesn’t feel comfortable with, especially libertarians and Tea Party types who make up a growing and vocal minority of the electorate. In addition, heavy-handed health insurance tactics have probably alienated their natural political constituency as the Internet Reformation shows supporters of big insurance to be the bought-and-paid-for hacks they are.
The insurance industry is thus in trouble on two fronts in the US and one wonders as a result why they’ve done what they have. The clearest explanation is greed, but if so, insurance executives may have set some sort of record for shortsightedness.
As the US public becomes familiar with the ins and outs of Obamacare there is a very good possibility that the role of the insurance industry itself will be associated with its failures. While in the short term established insurers may make considerable profits via Obamacare, in the long term they face several dangers.
The first is that the public will associate insurers closely with the more unpleasant aspects of the bill, thus giving the entire industry regular doses of bad publicity that may eventually undermine the control they’re currently exercising over the bill.
The second and even more difficult possibility is that Obamacare is merely a way station to a fully socialized single payer system. The insurance industry has probably alienated a base of natural supporters with its heavy-handed tactics in support of Obamacare. And a significant number of US citizens sympathetic to a single payer system wouldn’t mind seeing healthcare insurance done away with entirely.
It’s too soon to say healthcare insurers have signed a protracted death warrant by forcefully backing Obamacare behind the scenes, but over time it may begin to seem so. Would you want to be a healthcare insurance executive right now? Neither would we. Nor will we be looking to invest in any insurance companies at this point.
- See more at: http://www.thedailybell.com/trends-a....1mcrZ96E.dpuf
Why Insurance Industry Support of Obamacare Will Be the Downfall of Insurance Companies
http://www.thedailybell.com/images/library/Hemera-m.jpgObamacare is law but that may not prevent health insurance companies from feeling considerable backlash as time goes on. This brings up questions not just about insurers’ profitability but the viability of the industry as a whole both from a professional and investment standpoint. This is something that has not been focused on much, but it should be.
Now insurers, behind the scenes, are throwing their considerable muscle toward getting Obamacare up and running. Bloomberg, for instance, tells us that “Insurers Oppose Obamacare Extension as Danger to Profits.” The article explains that “allowing Americans more time to enroll for health coverage under Obamacare may raise premiums and cut into profits.”
Extending the enrollment period would have a destabilizing effect on insurance markets,” said Robert Zirkelbach, a spokesman for the Washington-based lobbyist group American’s Health Insurance Plans.
Allowing younger, healthy Americans to sign up later, as they probably would, means less revenue for insurers counting on those premiums to help defray the cost of sicker customers, threatening industry profits. “If you can enroll at any point in the year, then you can just wait until you get sick,” Brian Wright, an analyst with Monness Crespi Hardt in New York, said in a telephone interview. “This isn’t the industry crying foul and exaggerating the issue, this is actually one of those issues where there is a well-grounded reason for the concerns.”
And this is no small matter for the US economy. According to NPR, “One in eight Americans work in health care and the U.S. spends about $2.7 trillion on it each year. Tony Carnevale, director of the Georgetown University Center on Education and the Workforce, tells Robert Siegel that the U.S. healthcare system is ‘growing like crazy.’ ”
The insurers’ dilemma, despite current growth, is a self-inflicted one. In the article, “Reuters to US Economy: ‘Our Heart Will Go On’ ” we focused on the hysteria over the government shutdown and the media’s sympathetic viewpoint toward government services generally. In fact, Reuters characterized the shutdown as a “fight with no room for compromise ...” and blamed the shutdown on the so-called Tea Party. “Minority government,” the editorial fumed. “It’s outrageous when you think about it.”
This is part of a larger dominant social theme: While the national healthcare website may be fixed, the larger legislative push is not to provide healthcare to all but rather to make the current provisions so onerous and expensive that people will cry out for a single payer system. The media’s sympathy toward big government will make this meme an active and persuasive one.
Government bigness and its necessity is surely a growing dominant social theme, but it is one that a significant portion of the US population doesn’t feel comfortable with, especially libertarians and Tea Party types who make up a growing and vocal minority of the electorate. In addition, heavy-handed health insurance tactics have probably alienated their natural political constituency as the Internet Reformation shows supporters of big insurance to be the bought-and-paid-for hacks they are.
The insurance industry is thus in trouble on two fronts in the US and one wonders as a result why they’ve done what they have. The clearest explanation is greed, but if so, insurance executives may have set some sort of record for shortsightedness.
As the US public becomes familiar with the ins and outs of Obamacare there is a very good possibility that the role of the insurance industry itself will be associated with its failures. While in the short term established insurers may make considerable profits via Obamacare, in the long term they face several dangers.
The first is that the public will associate insurers closely with the more unpleasant aspects of the bill, thus giving the entire industry regular doses of bad publicity that may eventually undermine the control they’re currently exercising over the bill.
The second and even more difficult possibility is that Obamacare is merely a way station to a fully socialized single payer system. The insurance industry has probably alienated a base of natural supporters with its heavy-handed tactics in support of Obamacare. And a significant number of US citizens sympathetic to a single payer system wouldn’t mind seeing healthcare insurance done away with entirely.
It’s too soon to say healthcare insurers have signed a protracted death warrant by forcefully backing Obamacare behind the scenes, but over time it may begin to seem so. Would you want to be a healthcare insurance executive right now? Neither would we. Nor will we be looking to invest in any insurance companies at this point.
- See more at: http://www.thedailybell.com/trends-a....1mcrZ96E.dpuf
Reply With Quote
