Health Care Firms Mull Implications of Election Gains by Democrats
President-elect Barack Obama (D) will create "corporate winners and losers as he tries to carry out his promise to produce jobs, expand health care coverage, and increase the use of alternative energy, all while cutting taxes," Bloomberg reports (Woellert, Bloomberg, 11/5).
According to the Wall Street Journal, "A broad swath of businesses is prepared for a long-anticipated revamp of the nation's health care system," as a Democratic president and Democratic-controlled Congress usher in the prospect of universal health care.
The Journal reports that Democratic lawmakers "have made it clear" that Medicare Advantage plan payments "are a big bull's eye in any health care overhaul." However, insurers could benefit from Obama's proposed health system overhaul, according to the Journal (Williamson, Wall Street Journal, 11/5).
Bloomberg reports that while insurers would be barred from denying coverage to people with pre-existing health conditions, "they would also benefit from subsidies to make coverage more affordable" for the uninsured.
Aetna CEO Ron Williams said that requiring people to obtain health coverage, could keep costs low because without a mandate, healthy people could opt out of the collective insurance risk pool (Williamson, Wall Street Journal, 11/5).
Phil Blando, a partner with AB+M Partners, said, "If we were able to get everyone in the system ... there could be some real benefits accruing to the health insurers" (Bloomberg, 11/5).
The Journal reports that reducing the number of uninsured could help more U.S. residents buy medications. In addition, drug companies could "face potential pressure from a Democratic Congress, which could push a plan to give the government power to negotiate prices for drugs sold to Medicare recipients" (Wall Street Journal, 11/5).
Obama said he also supports allowing people to purchase lower-cost prescription medications from abroad (Bloomberg, 11/5).
Bill Tauzin, president and CEO of the Pharmaceutical Research and Manufacturers of America, said, "There are things Congress could do to drive" the pharmaceutical industry "out of the country" (Wall Street Journal, 11/5).
However, Carl McDonald, an analyst at Oppenheimer & Co., said, "The continued financial market trouble has made it even less likely that we will see any major changes to the employer group health insurance market, since there just isn't the funding available to pay for any kind of major reform." He predicted that in 2009, the only two health care issues Democrats will address are the expansion of SCHIP and cuts in payments to MA plans (Bloomberg, 11/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.