Health Insurers may have Sealed their own Fate

By relentlessly attacking the major provisions of the Senate Finance Bill which would appear to be serving as the template for compromise reform legislation at least capable of overcoming a Republican fillibuster, the health insurance industry may have done itself no favors.  While at least giving the impression of playing nice up until unveiling a very critical report of the Senate Finance bill on the eve of its passage, the industry at least had a seat at the reform table.  No more.

The Democrats (as divided as they have been on the various reform measures especially whether to have a public insurance option or some watered down standby version of it) now have a common enemy.  By putting its imprimatur on a report warning of the great premium increases which would result if the Senate Finance version became law, the insurance industry has now shown its true stripes as against at least a version of reform which has the greatest chance of overcoming a Republican fillibuster, clearing the Senate and becoming law.   

If anything, the almost universal panning of the premises and conclusions of the report by impartial health care experts has resulted in emboldening Democrats to resurrect the public insurance option, all but left for dead as recently as a couple of weeks ago.  In addition, there are now efforts to impose fresh new regulations on the insurance industry, limit its profitability and even restrict, if not eliminate, the antitrust exemption it has long enjoyed.

These developments should significantly impact the fortunes especially of the for profit investor owned companies such as:

1.  United Health Group;

2.  Humana;

3.  Aetna;

4.  Cigna; and

5.  WellPoint.

This author consults with leading institutions through GLG