MarketWatch (Dow Jones)
March 28, 2008
Wellpoint (WLP) Downgrade from Lehman. Sells down to $43.02 from 52-week high of $90.
And…
Analysis Look to First-Quarter Financial Results of Insurers for Signs of Industry’s Health
Kaiser Daily Health Policy Report
April 3, 2008
According to Sheryl Skolnick, a health care analyst and senior vice president at CRT Capital Group, the health insurance industry has experienced a downturn for two years, and “it just took (WellPoint) imploding for us to figure it out.” She added that the current prices of health plans do not account for growth in medical costs. Skolnick said that health insurers will begin to reverse the downturn when they “create affordable health insurance plans that consumers really want to buy instead of affordable-but-barebones plans that do not offer consumers a compelling value” (Wisenberg Brin, Dow Jones, 4/2).
http://www.kaisernetwork.org/Daily_reports/rep_hpolicy.cfm#51337
Comment:
By Don McCanne, MD
WellPoint has been the leader in marketing innovative “affordable-but-barebones plans that do not offer consumers a compelling value.” So now the industry will need to reverse its downturn by creating “affordable health insurance plans that consumers really want to buy.”
It’s all very simple. Restore the health benefits in their plans, and then sell them at a competitive premium that will cause consumers to want to buy them. It must be a good idea since Senators Clinton, Obama and McCain each propose private health plan competition as the major component of their health reform proposals.
Before benefits are restored, one little glitch will have to be solved. In addition to the revenues that they will receive from their competitive premiums, they are going to have to figure out where they will get the money to pay for the health care benefits that consumers really want to have. Apparently the presidential candidates will let the market figure that out.
