Health reform: Dog Bites Man edition

More

Health insurance company stocks tanked this week last week on the news that President Obama wants to slash their Medicare payments. Except that doesn't even remotely qualify as "news."

There's a lot more to Obama's budget and his plans for health reform than this but he wants to cut $177.5 billion from the subsidies the government pays to private insurers over the next ten years and to subject the plans to a new bidding process to win the right to service beneficiaries in the Medicare Advantage program.

That's no small amount of money and the market reacted accordingly. The folks at the Wall Street Journal took a snapshot after the budget came out Thursday:


Here's the damage as of mid afternoon. Humana: down 20% UnitedHealth Group: down 14%. Coventry Health Care: down 14%. Aetna: down 13%. WellPoint: down 10%. Cigna: down 9%

Far be it from me to criticize but how on earth could this have caught anyone by surprise? Now's comes the part where I concede that I come at this from a Washington perspective not a Wall Street one. But still. (And I'm not the only one who's incredulous over this. Check out Matthew Holt and Robert Laszewski, too.)

And it's not just that investors had the months between Obama's election and inauguration to prepare themselves. Details about the budget started appearing in the Journal, the New York Times, the Washington Post and other outlets in the few days leading up to the budget. Obama's address to a joint session of Congress Tuesday also highlighted that the president intended to tackle health reform, a costly agenda.

The Democratic House passed a $50 billion, ten-year cut in Medicare Advantage back in 2007, too. (That was the dog licking its chops.) Though it never became law, that legislation sent an unmistakable signal of where Democrats' heads are. Heck, even John McCain was looking to take a pound of flesh from the insurance industry, indicating that even having a Republican in the White House wasn't going to fully protect them this year.

Jeffrey Young is a staff writer at The Hill.

Jump to comments
Presented by

Jeffrey Young

Jeffrey Young is a staff writer at The Hill, the newspaper for and about Congress, where he covers health care, lobbying, politics, and the intersection thereof for the "Business & Lobbying" section. He's been covering health policy in Washington for a decade and still hasn't heard that one good idea that will fix everything. Email Jeffrey at jeffrey.young.atlanticbusiness@gmail.com
Get Today's Top Stories in Your Inbox (preview)

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity


Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity

Video

Is Technology Making Us Better Storytellers?

The minds behind House of Cards and The Moth weigh in.

Video

A Short Film That Skewers Hollywood

A studio executive concocts an animated blockbuster. Who cares about the story?

Video

In Online Dating, Everyone's a Little Bit Racist

The co-founder of OKCupid shares findings from his analysis of millions of users' data.

Video

What Is a Sandwich?

We're overthinking sandwiches, so you don't have to.

Video

Let's Talk About Not Smoking

Why does smoking maintain its allure? James Hamblin seeks the wisdom of a cool person.

Writers

Up
Down

More in Business

Just In