Health Bill Passes, Health Stocks Rise

CEO Uncle Pennybags of Monopoly Managed Care celebrates the passage of health care “reform.”

Quite predictably, health care stocks rose on Monday after the House of Representatives passed health care “reform” on Sunday night. While there are some aspects of the bill that are not HMO-friendly—such as prohibiting discrimination based on preexisting conditions—the insurance mandate is huge for them. Forcing over 30 million uninsured people buy private insurance is a great way to transfer yet more wealth to corporations. This is especially true when you take into consideration the government subsidies for American families pulling in less than $88,000 a year. And Big Pharma is ecstatic because this bill means that by 2014, tens of millions of new people will be able to get prescription drugs more easily. With no provisions for the reimportation of cheaper (but the same) drugs from other countries, and nothing allowing the government to negotiate drug prices under Medicare, this legislation is a can’t miss for the pharmaceutical industry.

The sorry lesson of this health care bill is that if you want to get a major, “historic” piece of legislation passed in the United States, it must contain giveaways to the powerful parties affected. That’s a given. Neither the Democrats nor the Republicans are very much interested in pissing off the private power centers that throw money at political candidates like confetti at a parade. We’ll see the same thing as banking reform makes its way through the Congress. Last week, the Senate Banking Committee voted 13-10 along party lines to send Christopher Dodd’s (D – Connecticut) imperfect financial reform bill to the floor. The funniest thing about it was that Dodd agreed not to allow any amendments from Democrats in order to garner bipartisan support. I’m glad that worked out.

There are plenty of reasons to believe banking reform will go the way of the health care bill: passed and signed into law, but very watered down, coming up far short of what the situation calls for. I’m sure that enough Democrats—particularly in the Senate—will have reservations about banking reform so the White House and congressional Democratic leadership will have the perfect excuse to pass a bad bill. I can see Nancy Pelosi now with her frozen face and goofy smile in a few months time consoling the disappointed: “We’d love to, but we just don’t have the votes for that kind of reform.” Granted, it will be very difficult for the Republicans to mobilize popular support against banking reform à la the health care debate. But then again, never underestimate the ability of the American population to unwittingly go to bat for the very people who, at this moment, are thinking up new and exciting ways to siphon more money from them.

In the words of Yakov Smirnoff, “What a country.”

- Max