You hear a lot of talking points from both Democrats and Republicans about why Medicare for All won’t work. It’s too expensive. It will provide inferior service. People don’t want to give up their employee-sponsored insurance.
One thing you don’t hear, unless you turn to the financial press, is this: a whole sector of the economy is based on profiting off denying you healthcare. And if Medicare for All happens, they’re going to lose a lot of money, and possibly their entire business.
On Wednesday, Bloomberg reported that stocks in the healthcare market are taking a nosedive as talk of Medicare for All by 2020 presidential candidates proliferates.
As financial analyst Michael Newshel put it: “Presidential primary politics [are] more in focus than fundamentals.”
Together, the shares of hospitals and insurers lost $28 billion in market value on Tuesday, according to data compiled by Bloomberg. The Tuesday losses capped the worst five-day stretch since 2011 for health insurers, despite UnitedHealth reporting earnings that beat analysts’ estimates and raising its 2019 forecast.
The slide in hospital and insurance stocks continued Wednesday, wiping out billions of dollars more in market value from some of the biggest health companies in the U.S. UnitedHealth fell 3.2 percent at 2:20 p.m. in New York. Its competitor Anthem Inc. was down 6.8 percent, and Cigna Corp. slid 5.1 percent. Hospital chain HCA Healthcare Inc. dropped 3 percent, and Community Health Systems Inc. lost 5.5 percent.
The rout has started to bleed into the broader space, hitting medical devices, biotech and pharmaceutical shares. The S&P 500 Health Care Equipment Index plunged 4.3 percent, the most since February, while the Nasdaq Biotech Index fell 4.5 percent. Among drugmakers, Allergan Plc declined 5.4 percent, Pfizer Inc. was down 3.6 percent and Merck & Co. fell 4 percent.
Bloomberg attributes this dive to a call earlier this week between insurance giant UnitedHealth’s CEO Dave Wichmann and analysts, on which he repeated some familiar points about big bad scary socialism. This seems to have spooked the market.
Medicare for All would be a “wholesale disruption of American healthcare” that would “surely have a severe impact on the economy and jobs—all without fundamentally increasing access to care,” Wichmann said on the call.
It hardly needs to be said that as the CEO of an insurance company, Wichmann’s job isn’t to worry about “access to care.” His job is to make money.
Bernie Sanders, perhaps the leading figurehead in the fight for universal healthcare, and the sponsor of the current Medicare for All bill in the Senate, directly addressed UnitedHealth earlier this month on Twitter.
In the tweet, Sanders linked to a Washington Post article which discussed how insurance companies were wooing Democrats away from Medicare for All. The article quoted UnitedHealth’s insurance division CEO Steve Nelson responding to an employee question about the company’s response to Medicare for All in an internal meeting.
“One of the things you said: ‘We’re really quiet’ or ‘It seems like we’re quiet.’ Um, we’ve done a lot more than you would think,” Nelson told the employee. “You want to be kind of thoughtful about how you show up and have these kind of conversations, because the last thing you want to do is become the poster child during the presidential campaign.
“We are advocating heavily and very involved in the conversation [around Medicare for All],” Nelson continued. “Part of it is trying to be thoughtful about how we enter in the conversation, because there’s a risk of seeming like it’s self-serving.”
Yes, trying to preserve your totally unnecessary role as a middleman in providing healthcare is, some would say, self-serving.
So, what response does the industry have to all this?
A spokesperson for UnitedHealth told Bloomberg that the company has “long supported the expansion of healthcare coverage.”
In response to the Post story, UnitedHealth’s spokesman Tyler Mason said something similar.
“We have publicly supported universal coverage for over 20 years and have been engaging in thoughtful conversations with policymakers, employers, care providers and our own employees on solutions that build upon the success of existing public-private partnerships,” Mason told the Post.
Of course they have! More insurance policies is exactly how these companies make their money. What terrifies them about the idea of Medicare for All isn’t more people being covered—it’s getting cut out of the deal.