Wednesday, November 6, 2013

Interesting Twist: Arrival of ObamaCare Has Not Hurt Insurer Stock Prices

The cynic in me can't miss the opportunity to point out that when big government and big business get together to scratch each other's backs it is only the citizenry that loses.  

This is from Anna Bernasek writing at the New York Times, (Hat to to John Goodman's Health Policy Blog for the pointer):
Because they face new regulations intended to broaden coverage and limit profit-taking, some analysts have been concerned that profits will suffer. But in the run-up to the Affordable Care Act, stock market prices have told a different story. 
Over the last 12 months, shares of the top five publicly traded health insurance companies — Aetna, WellPoint, UnitedHealth Group, Humana and Cigna — have increased by an average of 32 percent, while the Standard & Poor’s 500-stock index has risen by just 24 percent. 
Strong profits in the current year, as growth slowed in overall health care costs, is one probable explanation for the outperformance by the group. 
Another is the growing expectation that payments from new customers required to buy insurance under the Affordable Care Act will offset costs from new regulations.