Wellpoint and United Healthcare: Stock price since Healthcare Bill passed.

First, a little history. If you remember I have written about these 2 companies many times during the healthcare debate. I had said if you want to know if the healthcare Bill is good for average Americans, watch the price of their stocks.If the stock price goes up and stays up, it is bad for the average American. If it goes down, it is good for the average American. On Dec. 5th the markets opened to the news the Public Option was going to be eliminated from the final Bill. Both company stocks surged after that. Then about a month or so ago the Bill go passed after reconciliation made it a better Bill. Well, there has been enough time passed since the Healthcare Bill got passed, so let's look above at the price of these stocks above. Both charts are a 1 year look at the stock price of both companies. I think we can safely say that shareholders didn't think it was that good, as we are now back to December levels in price and the steepness of the drop is noticeable.

The data is in on the Healthcare Bill approved by Congress and it's good!

I though an appropriate amount of time has passed since the Healthcare reform Bill passed and President Obama had signed it into law. There has been a lot of hype about it. Remember when on Dec. 5th they dropped the Public Option and the Healthcare stocks Wellpoint and United Healthcare started their march up. See the charts above. Well now that weeks have passed since the signing into law, interestingly enough the stocks of both of these Healthcare Insurance companies has dropped. I also said that when the stocks were going up, that the language in the Bill was good for Insurance companies and if the price of the stock dropped it was bad for the insurance companies. Well, as you can see the stock prices have come down and are now approaching where they were before the Public Option was announced dead.

For all the hype about the Bill as negative for average Americans, I think the real data is in and it isn't the polls taken by Republicans. It's the stock price and it is speaking loud and clear that the Bill in its final form is good for Average Americans.

Is bad Healthcare reform dead? Does good health insurance reform have a chance now? Look for answers in healthcare stock prices.

With all that has happened this past week, I thought an update on the Healthcare stocks was in order. If you have been reading here for a while, I have said countless times, that if you wanted to know if the proposed Legislation by the Democrats was good for average Americans, just watch the price of the stocks of United Healthcare and Wellpoint.

As you can see from the chart above, back on Dec, 5th, the Democrats conceded that the Public Option appeared dead. On Monday, Dec. 7th both stocks started to rise and gained almost 30% at the peak of each chart. On Tuesday, in Massachusetts voted in a Republican Senator to fill former Ted Kennedy's seat, a significant upset which continues to reverberate throughout the Democratic Party and the News media, this weekend. Again, as you can see from the charts, this election of a Republican, which denies the Democrats of their super majority of 60 votes, also appears to deny the Health Insurance companies the benefits they were hoping to get with the proposed legislation. This is signified by the drop after the market close on Tuesday, Jan. 19th and the market close of Jan. 20th and had continued through the day yesterday.

If you assume for a minute that what is good for Health Insurance companies is bad for average Americans, then this move is good and hopefully will continue. The Healthcare legislation needs to be bipartisan.

My suggestions for this are as follows:
1. What is needed is simplicity, not a 2008 page Bill.
2. Insurance companies must not deny coverage for pre-existing conditions any longer.
3. People should be able to buy Insurance across State lines, as they can do for car insurance.
4. Tort reform is also important and should be included in any proposed legislation.
5. Everyone should be required from age 25 and over to purchase Health Insurance.

This would be a good start for bipartisanship and would still allow an unprecedented victory for the Obama Administration and the Democratic Party.

Health Ins. reform and the Senate seat in Massachusetts

I am still tracking the price of Healthcare stocks since December 4th when everyone learned that the Public Option for Healthcare insurance reform was dead. Since that time both United Healthcare and Wellpoint stock charts have soared. To be more precise, United Healthcare's stock has risen a whopping 29.5% and Wellpoint has gained 28.5%. I have said the best way to know if the healthcare legislation will be good for the average American or for the Heath Insurance companies was to follow the price of these stocks. As many can clearly see, the proposed legislation is good for the Health Insurance companies as they are getting about 30 Million new members to their ranks without much restriction on cost containment thanks to Republicans and Blue Dog Senators efforts like Sen. Ben Nelson of Nebraska's efforts to try to kill any meaningful legislation.

In the charts above, the answer is clear and you can't slap lipstick on this pig to make it look better. This may be why, at least in Massachusetts, the Democrats may lose the former Democratic seat held for 47 years by Ted Kennedy. He is turning in his grave over this mess.

The last word on the Senate Healthcare Legislation and the affect it has had on theirstock prices

Well the data is now complete with today's action. As you can see from the 2 charts above, the Senate Bill has been a good thing for the Health Insurance companies and their shareholders and not so good for average Americans. I don't know where these two stocks go from here but I will track them until a Final Bill is passed by both the House and Senate and ready for the President's signature. I will not post any more on these two companies or the topic until then. I will return to writing about the stock market, politics and news items of personal interest but for now that's it on this topic.

I want to wish all my readers a Merry Christmas as we are only a few days away. Whatever your faith, it is a time to enjoy loved ones and try to forget about other pressing matters. Remember to be generous to those in need more than just for Christmas as many need help. Local Food Banks are a good place to give as are local Shelters for the homeless.

United Healthcare & Wellpoint win delay on healthcare tax

You read that headline correctly. They had it planned all along and that may be at the core of why United Healthcare, symbol UNH, stock moved up almost 18% in just 8 trading days. Here's some excerpts from the news out this morning from Bloomberg.com.

Health Insurers Win Delay on Start of $70 Billion in Added Fees

By Alex Nussbaum


Dec. 20 (Bloomberg) -- UnitedHealth Group Inc., WellPoint Inc. and smaller U.S. insurers gained a year under Senate Democrats’ proposed health-care legislation before the start of a tax that industry lobbyists say will drive up premiums.

The measure proposed yesterday by Senate Majority Leader Harry Reid would also exempt some nonprofit insurers from the tax, shifting more of the burden to the for-profit companies, said Elizabeth Hall, a vice president at Indianapolis-based WellPoint.

The insurer tax, amounting to about $70 billion over 10 years, was to start next year under a previous version of the Senate measure. That would have forced insurers to take $6.7 billion out of profit, since they’ve already signed contracts setting rates for 2010, said Matthew Borsch, a New York-based analyst for Goldman Sachs Group Inc., in a Dec. 16 interview. The new version also postpones more of the tax until after other parts of the health overhaul kick in.

“We made some pretty salient arguments that people are going to be paying for something before they see any benefit,” Hall said in a telephone interview today. “There’s a policy logic behind it and also a political logic: Who wants to tax their constituents before they see any benefits?”

Without the change, Borsch said, 2010 earnings per share at UnitedHealth, based in Minnetonka, Minnesota, would have been cut 25 percent, while those at WellPoint would have been diminished 28 percent.

I have said in previous posts to watch the stock prices of these healthcare stocks to see if these changes are good for average Americans. If the stock prices keep going up, it is good for their shareholders but bad for average Americans. If their stock price drops, it will be bad for shareholders and good for average Americans. Let's see where the price of the stocks go when the trading day closes on Monday.

United Healthcare gains 17.1% in just 8 days. I wonder why?

I had to post another chart and comment on the Health Insurance companies and how far their stock price has advanced. I am not going to repeat myself here so if you want the background read the previous several posts. But in summary, United Healthcare's stock has advanced 17.1% since the company knew the Public Option was going out of the Senate Bill on Dec. 6th and then the option to have people 55 and older get a chance to buy in to the Medicare program died on Dec 14th. Can you imagine a stock gaining 17.1% in just 8 days!!!! Unbelievable! And the volume went up a factor of 2.5 times to 3 times the previous 20 days. So this move up is for real and not just a blip on the charts.

I also was keeping track of Wellpoint to see how their stock moved. Well the verdict is in, Wellpoint has gained 10.4%. Now you know how the Insurance companies view this legislation. It is a boon for them and their shareholders and it is going to hurt the average American and the country as Healthcare costs are going to rise for the country.

All I can say is that this is disgusting.

Update on Health Insurance stocks and the Senate Legislation's expected impact

In keeping track of the Health Insurance companies of United Healthcare and Wellpoint's stock price to give us average Americans insight as to whether the proposed changes to the Healthcare legislation will be good for us. Well last night word came down that now the Senate has decided to eliminate the 55 year old Medicare idea, which was to help the Bill's passage instead of the Public Option. Senator Joe Lieberman was the one who again said he was not for it, even while, in September, he came out with the idea himself, as a way forward. Now he has gone back to his masters in CT and gotten more new instructions. So now he opposes it. I think Joe is looking to retire from the Senate when his term ends. Gee, I wonder what Industry he is going to work for? Any guesses?

Anyway, the charts above show that since the Public Option got scrapped, the Healthcare companies stocks have soared. In the case of United Healthcare, with the market gains including today so far, the stock is up 13.8% in just 7 business day. That is an unbelievable climb. Wellpoint has gained 9.8% during the same period. It too is a remarkable gain. The overall market has gained 0.7% in the same time period. It has been basically flat. So there is no doubt the Health Insurance public companies are thrilled at the idea of mandating insurance for everyone and subsidized by the government and no restrictions to contain costs in effect, for these companies. Bravo Congress! You are screwing up again to try to get a 60 vote majority to get this through. The Republicans wouldn't be so accommodating if they were in the drivers seat here. If they didn't have the 60 votes and they were in control of the Congress and it was a particular piece of legislation which would reduce taxes or something, they would go to reconciliation if they didn't have the votes and ramrod it through. I have always said the Democrats have the best teachers right next to them in how to wield power in Congress. It is the Republican Party. The problem is that the Democrats are made up of a lot of weak people.

UPDATE: 4:00pm PST

Well now you know we are losing as average Americans. The Democrats are trying to put lipstick on this pig and sell it to the public. It doesn't work for me. There are not real cost controls and we will be back dealing with this in 4 years after 2012 election. You just wait and see.

Is the proposed Healthcare Legislation good for us? Watch healthcare stocks!

I was wondering what the reaction would be to the latest Senate move to drop the Public Option from the proposed Healthcare legislation. A group of 10 Senate Democrats, under the direction of Sen. Harry Reid, were asked to try to craft a compromise bill on the question of how to resolve the "Public Option" issue, which the House had passed in its legislation. There were 5 Progressives in the group and 5 Moderate Senators. They reached agreement to drop the "Public Option" in favor of extending Medicare Benefits to make people 55 years or older eligible for the program. I was wondering whether this is a sellout of those Americans who want the Public Option, because they feel it is the only way for true competition to keep costs down in Healthcare, or whether they would view this as a net positive to do this. I didn't know where to look as this idea has floated around in the news media since the weekend publicly. Where should I look for that tidbit of a clue as to the answer to that question? I found it. It was to look at the change in price of healthcare stocks!

So I looked at the stocks of WellPoint and United Healthcare to give me the answer. In the 1 month chart above you can see the answer to that question if you look at the last 2 trading days. I think that the United Healthcare 1 month chart above is the most revealing, as it clearly shows a reversal in the price of the stock in the past few days. Now it is heading up. The Wellpoint 1 month chart shows more upward movement as well, the past 2 days. So, if you think this proposed Healthcare Legislation banging around in the Senate is good for the average American, you are wrong.

It will be good for the Health Insurance companies and so those owning their stocks will benefit. There will be a lot of smoke and mirrors, used by the Senate, to sell this as "good for America" but I am not going to believe it. The stock market response is a reasonable way to determine whether this is good for the average American and the data is already in. Don't wait for the Congressional Budget office data to say anything to the contrary. They will show this helps reduce costs in some fashion.

As to the Healthcare companies stocks, I'll bet that today both of those stocks rise again. Check back tomorrow and watch for the overall stock market to rise as well as there is more at stake than just these two companies. The healthcare sector will be one sector of several which leads the markets higher today .