Insurance Space

The US Congress is currently considering proposals to overhaul the nation’s health care system. On 7 November 2009, the House of Representatives passed the “Affordable Health Care for America Act” (H.R. 3962), and, on 24 December 2009, the Senate passed the “Patient Protection and Affordable Care Act” (H.R. 3590). The House and Senate bills, which differ from each other in material respects, are now in the hands of a Joint Conference Committee of the two chambers, whose mandate it is to seek to reconcile the two bills. If the reconciliation process is successful, the Conference Committee report will go back to each chamber to be voted upon. If adopted by both the House and the Senate, the Conference Committee report will be presented to President Obama for his signature.   

Washington is the latest state to consider a ban against the controversial practice of using credit scores to determine insurance rates, with a legislative hearing held this week on the proposal.

An announcement from Washington Insurance Commissioner Mike Kreidler expressed support for ending the practice in the state, pointing out that some people have seen their premiums increase simply because they closed accounts or took other basic financial steps. Kreidler also noted that some insurance companies have even begun taking a person’s educational level into account when setting rates.

UnitedHealth Group Inc., the biggest U.S. health insurer by revenue, beat analysts’ estimates for fourth-quarter profit as sales of coverage for the elderly grew and costs for treating swine flu tapered off.

Net income rose 30 percent to $944 million, or 81 cents a share, from $726 million, or 60 cents, a year earlier, when a $350 million legal settlement damped results, the Minnetonka, Minnesota-based company said today in a statement.

Lots of companies are showing improved profits these days, but only a few can boast that their profits doubled in the latest quarter from the previous year.

For this column, I screened about 1,700 U.S. stocks with a market value of $1 billion or more, and found about 100 that can make that claim.

By no means would I buy all of these stocks. Some are too indebted. Others sell for a high multiple of earnings or have business strategies that leave me skeptical. Yet several seem to me to have investment merit.

Small businesses and self-employed individuals hope to get better deals on health insurance through the new exchanges that would be created under health care reform legislation.

These new marketplaces should provide up to 30 million Americans with an easy-to-use way to shop for coverage by offering a menu of plans, presented in a Web-based standardized format. By creating a large pool of customers, the exchanges should be able to get better insurance at a lower cost than individuals or small businesses could get on their own.

Union leaders opposed to a Senate plan to tax the most expensive employer-provided health benefits said Democrats face losses in this year’s U.S. congressional elections if they fail to support labor’s agenda.

“This is a moment that cries out for political courage, but it is not much in evidence,” Richard Trumka, head of the 11 million-member AFL-CIO labor federation, said yesterday in a speech before he and other union leaders met with President Barack Obama, who supports the tax. Trumka warned of a repeat of 1994, when Democrats lost control of Congress, if lawmakers back a health-care overhaul without heeding labor’s concerns.

President Barack Obama said the health-care legislation he anticipates signing this year will have an immediate impact by expanding coverage to the uninsured and requiring insurers to accept customers regardless of pre- existing conditions.

In his weekly radio and Internet address, Obama said the measure making its way through Congress would build a new foundation for economic growth by reining in health-care costs and making affordable health care more available.

While many of the changes won’t take place for several years, “there are dozens of protections and benefits that will take effect this year,” he said.

Senate Democrats will have the upper hand as U.S. lawmakers return to Washington this month to confront the last major hurdle in the effort to overhaul the nation’s health-care system.

With Democrats in both chambers under pressure to craft compromise legislation, the biggest areas of contention are the different taxes the House and Senate chose to fund their bills, how strictly to bar federal money for abortion and whether to create a government-run program to compete with private insurers.