Universal Healthcare: A Win For Health Insurers?

The election of Republican Scott Brown of Massachusetts adds a new layer of uncertainty to President Obama’s push for universal health coverage for all Americans. Tipping the balance of power from the democratically controlled Congress and allowing the Republicans filibuster power may prove to be the single most important influence on the final health care bill. However, if a bill is passed that is similar to the Senate health bill, the health insurance industry will be negatively impacted. (For related reading, check out Intro To Insurance: Health Insurance.) Get Free Stock Analysis By Email There are an estimated over 40 million uninsured Americans today and the bill would increase coverage to about 29 million uninsured. The Council of Economic Advisers for President Obama reports that the average annual premium for individuals is over $4,000 creating more than $116 billion in new premium revenue. And the bill provides strong incentive for these uninsured to [Read the full article]

PRESIDENT OBAMA WILL ISSUE his budget proposal for fiscal (September) 2011 on Monday. Under law, Presidents must submit a budget to Congress between the first Monday in January and the first Monday in February. By custom, the President’s proposal is delivered on the later date. First-year Presidents are exempt; last year’s budget proposal was on Feb. 26.

This budget may be more relevant than usual. We are generally skeptical of the import of the President’s budget, since in our form of government, the legislative branch (Congress), not the executive (President), drafts budgets. However, last year, with a new …

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Express Scripts’ purchase of the NextRx pharmacy benefit management unit of HMO WellPoint has made a lot of investors happy. Since the deal was announced last April 13, Express Scripts shares have risen 60% to around 90 before pulling back a bit.

The $4.7 billion purchase, which closed Dec. 1, doubled to 50 million the number of beneficiaries served by Express Scripts (NasdaqGS:ESRX – News). Equally important, the deal gives Express Scripts a 10-year contract to continue providing pharmacy benefit services to patients covered under WellPoint’s (NYSE:WLP – News) managed care plans.

Express Scripts, with a market cap of $23 billion, ranks second among pure-play pharmacy benefit managers by market cap. Medco Health Solutions (NYSE:MHS – News) leads with a market cap of $30 billion.

CVS Caremark (NYSE:CVS – News), which is a hybrid of retail pharmacies and pharmacy benefit managers, or PBMs, has a $46 billion market cap. [Read the full article]

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