Saturday, March 31, 2012

ASK THE EXPERTS, GET CONFUSED

The stocks of insurance companies have gone way up this week, and Matthew O'Brien of The Atlantic knows precisely what the Street is anticipating:

One reasonable conclusion is that Wall Street's betting that Obamacare will either be struck down in its entirety or upheld in its entirety. Both would be very, very good news for healthcare companies. The death of the individual mandate, alone, would be bad news for Big Insurance....

The worst possible outcome for healthcare insurers is if the Court only invalidates the individual mandate, kicking out the second leg of the tripod. Insurers won't be able to ditch the sick, but the healthy will ditch them. Adverse selection will quite viciously do its work on their bottom lines....


So, according to O'Brien, losing just the individual mandate would be the absolute worst thing for the insurance companies, and a complete overturning of the law would be excellent news for them.

Which is interesting, because Reed Abelson and Katie Thomas of The New York Times say the exact opposite:

"Many of us did not get the bill we wanted, but I think having to start over is worse than having to fix this," said Robert Laszewski, a health care industry consultant and former insurance executive who opposed the bill.

... Many insurers would have difficulty changing course. "The risk of repeal and starting from zero frightens them infinitely more" than having to comply with the law as written, said Michael A. Turpin, a former insurance executive who is now a senior executive at USI Insurance Services, a broker.

... many insurers say the health care market is deeply flawed. "The system doesn't work," said Mark T. Bertolini, the chief executive of Aetna. "Something has to be done."

The law, "while imperfect in a number of ways, was a step forward," Mr. Bertolini said....


But if I were you, I wouldn't lose too much sleep worrying about the possibility that the Supremes will overturn the whole law when Big Insurance would prefer that only part of it be overturned, or vice versa. I'm sure Big Insurance, and the rest of Big Business, have already communicated their wish list to the movement-conservative bloc on the Court. I find the Times theory more persuasive -- it's one more reason I think the law will be left seriously wounded but not killed. Besides, as I've said, you still want to keep right-wing base voters motivated for November, so the Supremes will want to leave something in place for them to hate.

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