Insurance Companies and Healthcare Reform

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AP ran a story today noting that after Democrats proved Sunday night that they had 60 votes to pass healthcare reform, stocks in health insurance companies rose. This suggests that investors think the Senate healthcare bill is a huge boon for insurers, and Nate Silver quantifies that boon here.

Fair enough. Healthcare reform does guarantee a considerable amount of new business for the insurance industry. But be careful.  Here’s a chart showing a basket of insurance company stocks over the past six months, and as you can see they’ve been rising pretty steadily the entire time.1 What’s more, the most recent surge began on December 3rd, well before passage of healthcare reform was assured.  And Monday’s spike in the first hour of trading, though impressive, was probably pretty speculative and has lost some of its steam already. Generally speaking, you should always be wary of people attributing broad-based market rises to specific events, and this seems like a pretty good example. I’m not sure I’d read all that much into a very short-term market reaction here.

1This chart includes both accident and health insurers, but if you take a look at individual health insurance companies you see pretty much the same trend.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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