(AP Photo/Evan Vucci)
The great thing about capital is that it's not wedded to an ideology, though the conventional wisdom would have you think that it's otherwise. Many people still can't shake the fiction that conservative Republicans are the tools of fat cat financiers and industrialists compared to liberal Democrats, who supposedly fight the good fight on behalf of the little guy. But as the Great Health Care Reform debate of 2009 teaches, there's not a world of difference between the two parties
After Senate Democrats cleared the way
for a vote on health reform legislation, the stocks of Cigna, United Health and Wellpoint rallied to 52-week highs. To be sure, the mini-bubble that's been in the stock market the last several months has helped push up the entire Dow. But the moneyed interests figured out earlier than most that any final "reform" bill would be a gift to this particular sector. They turned out to be prescient and rightly celebrated after the Senate dropped the provision for a government-run insurance plan while putting in place a mandate requiring health insurance for about 30 million Americans now without coverage. (As a measure of how great a deal they're about to reap, the left is beside itself with rage and some, like Firedoglaker's Jane Hamsher,
are agitating to kill the Senate bill.)
After the Senate vote, Credit Suisse smartly raised its price targets on several insurers. The analyst covering the group noted that "the heavy lifting will come when Congress is forced to slow the rate of medical cost growth through more aggressive payment restrictions and utilization controls down the road." He got it right. Also, the fact that certain costs are capped in the bill while premium expenses are not is a green light for laissez les bons temps rouler. Considering the mosh-pit wrangling that went just to arrive at this point, there's little chance Congress might tackle that item any time soon.
After watching this farce play out, I came across this apercu from Bill Baker,
a publicist who I know from back east.
"Around the turn of the millennium, the average monthly insurance premium for a family of four was about about the same price as a VCR. Now, VCRs are extinct and health insurance costs about the same as a fifth story studio walk-up in Manhattan."
Which helps explain why it's Fat City for an industry that's mastered the Washington game better than most.