Obamacare stocks rally


By CaptainShuddup   Follow   Wed, 7 Nov 2012, 10:54am   1,186 views   24 comments
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With the election out of the way, investors were on the prowl for stocks that stand to benefit under President Obama's health care reform law.

Shares of major hospital operators rallied Wednesday as investors bet that the Affordable Care Act, popularly known as Obamacare, will boost those companies' bottom lines.

HCA Holdings (HCA), which operates 163 hospitals across the country, was up 7%. Investors also bid up shares of LifePointHospitals (LPNT), Health Management Associates (HMA), Tenet Healthcare (THC), Community Health Systems (CYH) and Vanguard Health Systems (VHS).

The law is expected to expand coverage to millions of patients, who would otherwise seek treatment at hospitals without any health insurance. Under the new law, hospitals will treat fewer patients who can't pay, which should help bolster their profits. CNNMoney had previously identified hospital operators as a potential winner if Obama were to be elected for a second term.

Meanwhile, investors punished shares of insurance companies that provide health care coverage, which will face new competition as the law is phased in over the next few years.

Humana (HUM) fell 6% in early trading. Aetna (AET), UnitedHealth (UNH), WellPoint (WLP), Cigna (CI) and Coventry (CVH) were also under pressure.

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  1. Call it Crazy


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    1   11:55am Wed 7 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike (2)  

    CaptainShuddup says

    Obamacare stocks rally

    So have firearm and ammo manufacturers...

  2. CaptainShuddup


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    2   11:59am Wed 7 Nov 2012   Share   Quote   Permalink   Like   Dislike (2)  

    In the meantime Oil is taking a Gas pounding.

  3. Homeboy


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    3   12:22pm Wed 7 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    CaptainShuddup says

    The law is expected to expand coverage to millions of patients, who would otherwise seek treatment at hospitals without any health insurance. Under the new law, hospitals will treat fewer patients who can't pay, which should help bolster their profits.

    Meanwhile, investors punished shares of insurance companies that provide health care coverage, which will face new competition as the law is phased in over the next few years.

    Health insurance will be expanded to millions of people and insurance companies will stop making insane profits? Oh no, that's horrible. What a bastard that Obama is.

  4. CaptainShuddup


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    4   12:33pm Wed 7 Nov 2012   Share   Quote   Permalink   Like   Dislike (2)  

    That's the theory, I implore you to cite one example where big business got the shitty end of the stick in the last 20 years.
    You guys are shooting from the hip with gut assumptions, the smart people that know who's paying for it, are going by history.
    Higher premiums and higher profits.
    There must not be "Lower" in either one of those figures.

  5. Homeboy


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    5   11:30am Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    CaptainShuddup says

    That's the theory, I implore you to cite one example where big business got the shitty end of the stick in the last 20 years.
    You guys are shooting from the hip with gut assumptions, the smart people that know who's paying for it, are going by history.
    Higher premiums and higher profits.
    There must not be "Lower" in either one of those figures.

    Uh, what do you mean by "you guys"? I quoted YOUR post.

    It is now a FACT that more people are insured than before the law, and the part that says insurance companies took a beating is from YOUR article. He he - maybe next time you'll read the article before posting it.

  6. edvard2


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    6   11:55am Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bottom line: too bad, healthcare reform is going to happen.

  7. zzyzzx


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    7   11:58am Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike (2)  

    Homeboy says

    Health insurance will be expanded to millions of people and insurance companies will stop making insane profits? Oh no, that's horrible. What a bastard that Obama is.

    I wouldn't be so sure that health insurance company profits will be under pressure. As per other articles here, even though they have required payouts, that won't stop them from simply jacking rates and increasing payouts just to maintain profit levels.

  8. Homeboy


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    8   8:57pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike (1)  

    zzyzzx says

    I wouldn't be so sure that health insurance company profits will be under pressure. As per other articles here, even though they have required payouts, that won't stop them from simply jacking rates and increasing payouts just to maintain profit levels.

    Again, I'm just quoting the article. It's more than a bit misleading to start a thread with the title, "Obamacare stocks rally", when health insurance stocks actually FELL. I mean, what part of " investors punished shares of insurance companies that provide health care coverage" don't you guys understand?

    As for your contention that nothing will stop insurance companies from "simply jacking rates", that's actually not true. It was true in the past, but now they will be limited by law as to how much profit they can make.

    It's almost as if you right-wingers WANT Obamacare to fail.

  9. rooemoore


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    9   9:01pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    CaptainShuddup says

    That's the theory, I implore you to cite one example where big business got the shitty end of the stick in the last 20 years.

    That's easy - Tuesday.

  10. Homeboy


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    10   9:10pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    http://www.businessweek.com/ap/2012-11-08/sector-snap-health-insurance-stocks

    "Insurance stocks flopped Wednesday after President Barack Obama's re-election reinforced the future of his health care overhaul, a law that fills investors with worry about government restrictions and tighter profits."

    So are you guys saying investors are worried about something that's never going to happen?

  11. rooemoore


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    11   9:20pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Homeboy says

    So are you guys saying investors are worried about something that's never going to happen?

    Investors worry if someone farts in church. Don't over-think it.

  12. Homeboy


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    12   9:25pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    rooemoore says

    Investors worry if someone farts in church. Don't over-think it.

    You're missing the point, my friend. These guys believe Obamacare is just a scheme to pump up insurance company profits. If that were the case, investors would be jumping all over it, not dumping it. The right wingers crying that the sky is falling are the ones over-thinking it. Who started this thread? Not me.

  13. Homeboy


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    13   9:30pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Funny how it seems to mean something that "Obamacare stocks rally" - enough to start a thread about it. But then when I point out that insurance stocks actually DIDN'T rally, then it all of a sudden means nothing. You guys are priceless.

  14. curious2


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    14   9:46pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    It seems posters here are quoting from different articles and talking past each other. The OP copied and pasted (without even attribution) this article from CNN, listing companies that stand to profit from Obamacare. Homeboy replied with a link to a Bloomberg article about insurance companies that may incur reduced profits due to Obamacare. Both of these effects were predictable and are entirely consistent.

    As I had previously pointed out to Homeboy (he disliked this but I'll point it out again), insurers have been buying hospital corporations and corporate practice groups to prepare for Obamacare. The reason is obvious: the MLR requirements compel insurers to shift profit from the insurance side to the provider side. So the parent company buys the provider, thus keeping the $ in the family so to speak, with the profit ultimately flowing up to the same CEO. The markets on Wednesday and Thursday simply adjusted to the fact that the profit is shifting from the insurance side to the provider side, so insurers that hadn't bought enough providers fell, while providers rose. I don't know why Homeboy didn't get this the first time, but I'll try again: a parent corporation can own multiple subsidiaries, including one that sells insurance and another that owns hospitals. MLR compliance means simply increasing the payout from the insurance subsidiary to the provider subsidiary, i.e. raising hospital prices. People end up paying more (especially if they're hit by a truck and the nearest hospital is out-of-network on their Obamacare policy), the hospital corporations profit more, but the insurance profit is technically reduced to comply with the MLR requirement. Homeboy gets to say he's got subsidized insurance, and that you have to buy it too, while the premiums increase and the CEO buys a new jet.

    The larger story is that markets overall fell 4% over two days. Likely reasons include the fact that mandatory diversion of more resources into the most wasteful sector (medical) drains those resources away from the rest of the economy.

  15. Homeboy


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    15   10:24pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    curious2 says

    It seems posters here are quoting from different articles and talking past each other. The OP copied and pasted (without even attribution) this article from CNN, listing companies that stand to profit from Obamacare. Homeboy replied with a link to a Bloomberg article about insurance companies that may incur reduced profits due to Obamacare. Both of these effects were predictable and are entirely consistent.

    WRONG! I quoted CaptainShuddup's OWN article, that he posted in the OP, stating that stock in insurance companies FELL when Obama was re-elected.

    His own article.

    Then, I FURTHER supported the point by posting a Business Week article corroborating the fact that stock in insurance companies fell.

    "Obamacare stocks" didn't rally, as the thread title misleadingly states. The stock in some HOSPITALS went up, because investors believe they won't have to treat as many uninsured people now. Having more people who can afford medical treatment is a GOOD thing. The stock in INSURANCE COMPANIES went down, because investors believe that insurance companies won't make such huge profits now. That is ALSO a good thing.

  16. curious2


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    16   10:29pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Homeboy says

    HOSPITALS went up, because investors believe they won't have to treat as many uninsured people now.

    The cost of treating uninsured people under EMTALA is only 2% of total spending and affects primarily public hospitals, which are not traded on stock exchanges. L.A. County has reported that it may have to close hospitals because subsidies that it had been depending on are going to be re-directed to insurers under Obamacare, but it will continue having to treat uninsured people under EMTALA. For-profit hospital corporations, which are the only ones traded on stock exchanges, are expanding to meet the expected surge in demand for elective procedures, i.e. scheduled procedures not emergencies, and some of these new hospitals do not even have emergency rooms so they won't have to treat any EMTALA patients.

  17. Homeboy


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    17   10:57pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike (1)  

    curious2 says

    I don't know why Homeboy didn't get this the first time, but I'll try again: a parent corporation can own multiple subsidiaries, including one that sells insurance and another that owns hospitals. MLR compliance means simply increasing the payout from the insurance subsidiary to the provider subsidiary, i.e. raising hospital prices.

    How perfectly disingenuous of you. You know very well that the egotistical Dan8267 is being a little thread-Nazi, and deletes anything I post in that thread. You know that he deleted a bunch of my responses to you, and yet you continued to beat up on my even though I can't respond. Nice.

    So here we are again, and we'll see if you have the stones to actually deal with someone who is now able to reply to you.

    You have a theory, but you have absolutely no evidence to support it. They can buy all the hospitals they like; they are still barred from arbitrarily raising premiums just to increase profits. In the article you link to, I don't see anything to support your contention that Obamacare is going to cause insurance company profits to skyrocket.

  18. Homeboy


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    18   11:10pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    curious2 says

    Homeboy says

    HOSPITALS went up, because investors believe they won't have to treat as many uninsured people now.

    The cost of treating uninsured people under EMTALA is only 2% of total spending and affects primarily public hospitals, which are not traded on stock exchanges.

    So then you seem to be saying that investor sentiment does not accurately indicate ANYTHING about the health insurance industry. Which then renders this entire thread moot, since the thread is about what happened to healthcare stocks.

    And that, in fact, has been my point all along.

  19. curious2


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    19   11:13pm Thu 8 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Homeboy says

    So then you seem to be saying that investor sentiment does not accurately indicate ANYTHING about the health insurance industry.

    That is the opposite of what I said. And, you still don't seem to understand that a parent company can own an insurance subsidiary and a hospital subsidiary. When the parent raises prices at the hospital subsidiary, it raises profits on that side, while increasing costs on the insurance side, thus satisfying the MLR requirement and justifying a premium increase. QED. You also overestimate my interest in your pretend fighting; if you want to non-gang-bang your head against your keyboard, please just goad the professor into something about 9/11.

  20. Homeboy


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    20   12:21pm Fri 9 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    curious2 says

    Homeboy says

    So then you seem to be saying that investor sentiment does not accurately indicate ANYTHING about the health insurance industry.

    That is the opposite of what I said.

    I quoted an article saying that investors believe hospitals will have to treat fewer uninsured patients.

    You responded by saying that the investors' belief is untrue.

    THEREFORE, you are arguing that investor sentiment is not an indicator of the truth.

    "QED", as you like to say.

    I'd love to stay and hear how that is the "opposite" of what you said, but I think I have to go jab a screwdriver into my brain now.

  21. Homeboy


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    21   12:25pm Fri 9 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Sucks when your fellow right-wingers don't just delete all my posts for you, doesn't it?

  22. SoftShell


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    22   12:47pm Fri 9 Nov 2012   Share   Quote   Permalink   Like   Dislike (2)  

    that's right...
    keep it dumbed-down so the likes of maddow can explain it to the fanboyz...

    rooemoore says

    Investors worry if someone farts in church. Don't over-think it.

  23. CaptainShuddup


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    23   1:01pm Fri 9 Nov 2012   Share   Quote   Permalink   Like   Dislike (2)  

    Homeboy says

    Sucks when your fellow right-wingers don't just delete all my posts for you, doesn't it?

    "There was a man.
    Immigration gun was drawn.
    The Dixon was ready to fire.
    To kill the little man with the pills.
    But then someone walks into the room
    and stand in front of this little man.
    "Put the guns away," the man say.
    "Nobody will die today."."

  24. Homeboy


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    24   12:01am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    CaptainShuddup says

    "There was a man.
    Immigration gun was drawn.
    The Dixon was ready to fire.
    To kill the little man with the pills.
    But then someone walks into the room
    and stand in front of this little man.
    "Put the guns away," the man say.
    "Nobody will die today."."

    So exactly how much acid did you do in the '60s?

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