Let's get the chain of events correct:
Some insurance industry CEOs start to panic about reform. They press their DC lobby, America's Health Insurance Plans, to do something about it.
AHIP asks PriceWaterhouseCooper to score a few of the Baucus mark's provisions.
Sunday, the industry issues what would quickly become a widely debunked report about what health insurance reform would mean for your health insurance premiums. Even GOPers are reluctant to use the report as a talking point -- so effectively did the White House and Democrats discredit it.
Investors freak out and start selling off their health insurance stock. PriceWaterhouseCooper acknowledges that their report was partial and incomplete.
Today, unbowed, the Senate Finance Committee passes the Baucus bill.
Only then do health insurance stocks start to rebound.
Maybe it's foolish to look at the stock prices... But it doesn't seem as if AHIP's getting a lot of traction for their last-minute panicked attack.
I'm looking at the Aetna chart and don't see this rebound. Cigna dropped quite a bit today. The related stocks table on Google shows every insurer down and most around 3% on a flat day for the broader market. The healthcare index that your ABC article links to was essentially flat and hasn't responded all that much despite the bigger moves in insurers.
If I had to play Kudlow and ascribe stock market volatility to political events, I'd say the insurers went down on the AHIP report, went up when folks thought the AHIP report would hurt the odds of Baucuscare, and then dropped today upon passage.
On the other hand, there's a spike in the DJI today corresponding w/ the Finance vote. But by Kudlow's Law, positive movements in the market owe to the brilliance of capitalism and negative movements are Democrats' fault.
Widely debunked? Maybe I am wrong, but I have seen criticisms of it, but I have seen no proof that it is wrong.
The same criticisms can be applied to the same CBO report that says that this will reduce the deficit by $81B.
PWC used exactly the same static scoring protocols that CBO uses when they do not have a reliable elasticity to use.
The holes in the PWC analysis are no less glaring than those in any other analysis.
The CBO assumes that employers will simply keep Cadillac plans in place as they are. Wrong. Behavior will change with the tax.
However, the CBO also assumes that 100% of reduced spending on health care benefits will be returned as taxable wages.
That is hilarious. Most likely it will go to other non-taxable forms of compensation such as 401k matching, deferred compensation plans, HSA accounts and flexible spending accounts.
Even worse, they assume these tax revenues grow at 10-15% a year. What exactly are they smoking?
The main criticism of the PWC report is that they used the same modeling techniques as the CBO. It is a flaw, for sure.
If the PWC report is wrong, then so is the mirage of $81B in deficit reduction.
Show me a state anywhere that instituted guaranteed issue with community rating and saw premiums stay flat? New York? Washington? Massachusetts? No. No. No.
Name just one.
Widely debunked? Not if you believe in the CBO tooth fairy.
If I had to play Kudlow and ascribe stock market volatility to political events, I'd say the insurers went down on the AHIP report, went up when folks thought the AHIP report would hurt the odds of Baucuscare, and then dropped today upon passage.
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In my opinion, the health insurance companies are actually the biggest gainers in the Baucus bill. They stand to receive millions of new customers who have no choice but to buy from them. The backlash of this late fictitious report could embolden the cry for a government option, which will really cost them money. Dr Reviews