Investors are seeing the Senate's version of health care reform as a massive public subsidy for insurance companies -- and as a result, are sending the sector's stock prices shooting up, up, up. Stripped of a government-run insurance plan, the bill would give tens of millions of Americans no option but to start paying hefty premiums to private companies.
The rise in stock prices has been particularly striking in the period since Sen. Joe Lieberman (I-Conn.) said on October 27 that he would filibuster a Senate health care reform bill if it included a public option - a threat that caused Senate leaders to cave without much of a fight.
Here's a quick breakdown of major health insurance company stock performance from Oct. 27 to Friday's market close:
* Coventry Health Care, Inc. is up 31.6 percent;
* CIGNA Corp. is up 29.1 percent;
* Aetna Inc. is up 27.1 percent;
* WellPoint, Inc. is up 26.6 percent;
* UnitedHealth Group Inc. is up 20.5 percent;
* And Humana Inc. is up 13.6 percent.
By comparsion, the Dow Jones Industrial Average is only up 2.3 percent during that time; the NASDAQ Composite is up a (relatively) paltry 1.4 percent.
Reuters noted the big bump Monday morning, after the bill passed the first critical test in the Senate:
"All in all, relative to the last version of health reform issued by the Senate, things have turned out pretty well for the health insurance industry," said Carl McDonald, an analyst at Oppenheimer. "In particular, all versions of a government-run health plan have largely been eliminated."
Thanks to Lieberman's threat, health insurance companies dodged a major competitor that could have lowered margins, siphoned off customers and impacted profits.
Key Dem: The Public Option Will Be 'Revisited'
One of the public option's strongest Congressional supporters insisted on Monday that while the Senate is poised to pass health care legislation that does not offer consumers a government-run insurance plan, he will bring the idea up again -- most likely after that bill is passed.
Sen. Tom Harkin (D-Iowa) told reporters that the public option is not dead. "It will be revisited," he said. "I'm just saying, I believe it is so vital and so important that it is going to be revisited. Believe me." The Iowa Democrat said that "even next year," senators "may be doing some things to modify, to fix, to compliment what we've passed here."
The idea of pushing for the public plan as a stand-alone piece of legislation sometime down the road has been championed by other supporters of the provision.
Harkin did not blame the White House for the absence of a public plan in the Senate's bill, as his colleague, Senator Russ Feingold (D-Wisc.) did in a statement on Sunday night.
Also unlike Feingold, he hinted that he was giving up for now. Asked whether he would consider reinserting the public option into the legislation during the conference committee set to commence between the House and the Senate, Harkin replied: "I didn't say that. I said it would be revisited."
Acknowledging that, philosophically, he favors components of the House's version over some in the Senate's, he nevertheless said that when he goes to conference committee it will be as an advocate for his chamber's product.
"I always say when we go to conference we are going to stick with the Senate side," Harkin said. "Look, I'm a conferee, I have to fight for the Senate and I will fight for the senate but we will have to make compromises with the House."
Sen. Kent Conrad (D-N.D.), likewise, insisted on Sunday that the conference committee would have to produce legislation that mirrored the Senate's or risk losing key conservative Democratic support. Asked about this process on Monday, Majority Leader Harry Reid (D-Nev.) kept mum.
"We have to pass this bill in the Senate first and we will worry about the next steps at a later time," he said.