Private Insurance is Winning.
Managed-care stocks (AKA, health insurance companies) were up big today on the news that Congress has plans to repeal both the health insurance tax and Cadillac tax as a part of the latest spending bill.
In fact, health insurers outperformed most of the market over the past month or so. Why? Because public support for Medicare for All is dwindling.
To illustrate this fact, Elizabeth Warren – now a frontrunner for the Democratic nomination – moderated her rhetoric on healthcare policy proposal as seen in her 100-day presidential roadmap.
Similarly to Biden and Buttigieg, Warren wants to create a public option first. Then, she’ll focus efforts on Medicare for All legislation.
Bernie is really the only candidate left who supports an immediate jump to Medicare for All after Andrew Yang came out in support of a step-wise approach.
Back to private health insurance.
So, as I see it, the tax repeals covered with moderating rhetoric surrounding Medicare for All can only be good news for managed care companies. After all, who do you think is going to manage any public health insurance option? Private insurance companies.
You might be surprised to learn that they already manage a third of Medicare (AKA Medicare Advantage) and two-thirds of state Medicaid programs.
So, let’s recap:
- Private insurance companies aren’t going anywhere anytime soon;
- Private insurance won big-time with the repeal of two health insurance based taxes; and
- Democratic healthcare policy proposals have moderated over time – away from Medicare for All.
It will be interesting to see how these facts play out as election 2020 comes closer.