What? the socialization of health care causes shares of Amerigroup (AGP) to spike? AGP jumped over 6% this AM on the passage of the major overhaul of health care/delivery/payment yesterday by Congress.
I won’t get into all the debates of how this affects personal freedoms (you mean I have a pay a penalty now nationally, not just in MA if I don’t have the “proper” coverage?), and how this will not cut the deficit (seriously, if you believe that you don’t pay attention – think “Big Dig” or even past entitlement programs – tremendously over cost estimates), and how this will force good medical professionals in two directions – out of the business or into private pay only clinics.
Forget all that – wasn’t this bill supposed to fix big bad health insurance companies? Why is AGP spiking? ohhh I know, mandating 30M be covered will bring MORE business to HMO’s. So if you don’t like insurance companies, get ready for a whole lot more of em! Because Daddy-O needs them to execute his plan.
[on a side note, look at the profit margins of major insurance companies – AGP (2.88%), WLP (7.75%), AET (3.67%), CI (7.07%), UNH (4.39%) – links go to Yahoo Finance page where you can see profit margins – take out the profits, are you REALLY saving health care costs? Doesn’t it tell you the costs are coming from somewhere else???]
A couple of thoughts to bring up – if 40%+ of the USA doesn’t pay taxes, and they don’t, how would you interpret that data? helping the poor is fine to a point, but do you think that 40% of the people need “help?” I have to think that some of those folks get a free ride. therefore if you pay taxes, watch out. Obama is building the free-rider class – those that pay no taxes, get handouts and don’t work. Does this describe all of that 40%? No I’m sure it doesn’t – but it describes enough of them that they will continue to vote for higher taxes and more handouts.
In the unintended consequences department – small businesses, which create most jobs in the US according to multiple sources, including Daddy-O (we discussed why the President wants to be our daddy and is succeeding – so from now on, I will relinquish my rights as a US citizen and just call him Daddy – why not? G.W. Bush took my civil liberties and Daddy O is taking my economic liberties – both are important for having true freedom), small entrepreneurs might just take it easy. Think about it – why earn more than 200k if the government will take more than half of it? Someone sitting on their couch eating nachos might say, “if I made over 200k I’d pay those taxes” but this person misses the point – they are not going to do the work so therefore don’t appreciate the effort that building a business takes – or the risks. An entrepreneur ways the pros and cons, especially since the entrepreneur is investing PERSONAL CAPITAL. If working too hard would mean losing most of one’s money to the state, that person will not grow their business and hire new employees. Think about that – more taxes = fewer jobs.
It won’t be until the printing press is taken away that many folks will realize the ramifications of spending too much of other people’s money, especially their future money (borrowing). Bottom line – as I always say – people need to learn by either the stick or the carrot – looks like we need the stick – Congress definitely needs the stick this November.
Disclosure: Neither I nor my clients interest in any of the stocks mentioned in this column. This may change in the future.