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Insurance Stocks on the Move

RightinNYC

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Insurance Stocks on the Move? Aetna Inc., Cigna Corporation, Wellpoint Inc., Health Net Inc., American International Group Inc. (AIG) - MarketWatch

Following were among the insurance companies whose shares were heavily traded in Friday's session and the expectation is for the continuation of this trend on Monday. Shares of insurers kept climbing Friday as a key healthcare vote in congress set for the weekend loomed in the background. The upward climb in insurance stocks seemed to indicate that the market had factored in the eventual passage of the bill which could add 10's of millions of new subscribers to the insurers client base.

...

Aetna Inc. (AET) surged 3.67% to $34.46 on 14.33 million shares. The company expects first-quarter earnings to surpass Wall Street predictions, but it held to its previous projection for full-year profit.

CIGNA Corporation (CI) gained 3.46% to $37.08 on 7.78 million shares. In the past one year, the stock has rallied over 115%.

WellPoint, Inc. (WLP) went up 1.96% to $65.07 on 12.46 million shares. In the past one month, the stock has gained over 11%.

Health Net, Inc. (HNT) soared 1.55% to $26.15 on heavy volume. In the past one month, the stock has gained over 14%.

And:

Traders Focus on Aetna in July - WSJ.com

"All this is likely a play on health-care reform and expectations that the private companies aren't at risk of losing too much," Mr. Ruffy said. To judge by Aetna's stock lately, investors would agree. The shares have risen about 20% since mid-February as the chances for a so-called "public option" to compete with private insurers have dimmed.


It would seem that both sides are a bit off when they say that Obama is destroying the insurance industry.
 
Of course the stocks will go up at first. After all, if the bill passes, they're going to have millions of new customers forced to buy their insurance - whether they want to buy it or not.

But then, with the rules and regulations imposed on the insurance companies, they will decline and likely go bankrupt one by one. The added risk without additional revenue will make it pointless and them impossible for them to operate.
 
Of course the stocks will go up at first. After all, if the bill passes, they're going to have millions of new customers forced to buy their insurance - whether they want to buy it or not.

But then, with the rules and regulations imposed on the insurance companies, they will decline and likely go bankrupt one by one. The added risk without additional revenue will make it pointless and them impossible for them to operate.

Seems pretty clear that the stock market expects a healthy insurance industry. No pun intended. How can you conclude they will go bankrupt? They literally have customers being handed to them by force of law.
 
Seems pretty clear that the stock market expects a healthy insurance industry. No pun intended.

For a period of time, sure. It's not like they're going to go bankrupt immediately.
 
For a period of time, sure. It's not like they're going to go bankrupt immediately.

How could they ever go bankrupt when ALL of the citizens have to buy insurance from them?
 
How could they ever go bankrupt when ALL of the citizens have to buy insurance from them?

Hmm.. let's see... maybe because they're going to be forced to accept ANYONE and they'll be unable to raise rates to accommodate the increased risk and financial requirements.
 
Seems pretty clear that the stock market expects a healthy insurance industry. No pun intended. How can you conclude they will go bankrupt? They literally have customers being handed to them by force of law.
Yup, all thanks to liberals and helping them evil capitalist on wall street, right? :doh
 
Because I can not buy insurance and then when I get sick, I can buy it and they have to cover my pre existing condition.
That's how you game the system.

Err, you're aware of the mandate, right?
 
$695 < yearly cost of insurance

Yes, and the addition of paying customers should more than offset those who try to cheat the system.

If it doesn't, premiums will go up. Insurance companies aren't going to just sit there and run in the red.

You can say differently but Wall Street seems to disagree.
 
Yes, and the addition of paying customers should more than offset those who try to cheat the system.

If it doesn't, premiums will go up. Insurance companies aren't going to just sit there and run in the red.

You can say differently but Wall Street seems to disagree.

I understand but if it were me having to pay $695 or the full cost.
I'm going to pay $695 and get full treatment if I need it.

In this instance, I'm going to try to find a new job that pays well but doesn't have insurance, so I get mine free off the taxpayer.
 
I understand but if it were me having to pay $695 or the full cost.
I'm going to pay $695 and get full treatment if I need it.

In this instance, I'm going to try to find a new job that pays well but doesn't have insurance, so I get mine free off the taxpayer.

Really. Lot of those jobs around right now?
 
How can you conclude they will go bankrupt? They literally have customers being handed to them by force of law.

Implementation of the pre-existing conditions ban will eventually force them to go out of business. A business can't survive on no profit, and the profit margin of health insurance companies is already relatively low.
 
Implementation of the pre-existing conditions ban will eventually force them to go out of business. A business can't survive on no profit, and the profit margin of health insurance companies is already relatively low.

One thing that I haven't really seen discussed too thoroughly - insurance companies might be required to offer these people a policy, but what regulations are going to be placed on pricing? If someone with 30 long-term diseases asks Aetna for a policy, why can't Aetna look at his risk factors, determine that in order to turn a profit his premiums would have to be $40,000 a year, and then offer him that rate. If he turns it down, what's the problem?
 
One thing that I haven't really seen discussed too thoroughly - insurance companies might be required to offer these people a policy, but what regulations are going to be placed on pricing? If someone with 30 long-term diseases asks Aetna for a policy, why can't Aetna look at his risk factors, determine that in order to turn a profit his premiums would have to be $40,000 a year, and then offer him that rate. If he turns it down, what's the problem?

I was under the impression that a big part of what the 'tards who passed the bill wanted was caps on how much insurance could cost. That they couldn't raise the premiums outrageously. That's what they've been hemming and hawing about, anyway.
 
I understand but if it were me having to pay $695 or the full cost.
I'm going to pay $695 and get full treatment if I need it.

In this instance, I'm going to try to find a new job that pays well but doesn't have insurance, so I get mine free off the taxpayer.


Where did you get the $695 figure? I just heard Rush say it's 2% of your income or $2,000, which ever is greater. That is the amount paid to the IRS each year if you are not insured, according to Rush.
 
I already stated this in another thread. The stocks were either going up because of the purchase mandates or down because of the speculative nature of the insurance regulations back loaded into the bill. Either way, the insurance stock values and overall company solvency will determine the rest of the market. So now we have the beginnings of a bubble, good luck folks.
 
I already stated this in another thread. The stocks were either going up because of the purchase mandates or down because of the speculative nature of the insurance regulations back loaded into the bill. Either way, the insurance stock values and overall company solvency will determine the rest of the market. So now we have the beginnings of a bubble, good luck folks.

I might have to get on that.

Something to think about.
 
The stocks will go up in the short term because of the influx of new clients to the insurance companies, but I think it's only a short term cash cow for investors. They know that after four years things will change... I wouldn't be surprised if we see stocks declining very blatantly as the roll out date approaches.
 
The stocks will go up in the short term because of the influx of new clients to the insurance companies, but I think it's only a short term cash cow for investors. They know that after four years things will change... I wouldn't be surprised if we see stocks declining very blatantly as the roll out date approaches.
I don't think it's going to take that long. Basically I see the stocks charging for about 1-2 years while enrollment swells, but then trailing off until the turd takes effect and THEN you will see a major burst.
 
Because I can not buy insurance and then when I get sick, I can buy it and they have to cover my pre existing condition.
That's how you game the system.

I still haven't seen anything that would explain why a huge portion of young and healthy people wouldn't just do this. One of the main reasons why young people get insurance is because they're worried that if they don't get it before something happens, they won't be able to get it later. This pretty much eviscerates that incentive.
 
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