Thursday, August 1, 2019

What the Democratic Debates Mean for Health Care Investors

Josh Nathan-Kazis Aug. 1, 2019 9:10 am ET
After two nights of noisy Democratic debates, one thing is clear: Health-care investors could be in for a few months more of white knuckles.
In both the first debate on Tuesday night, which featured Sens. Bernie Sanders and Elizabeth Warren, and the second debate on Wednesday night, which included Sen. Kamala Harris and Vice President Joe Biden, the clashes over the future of the health care industry were among the most fiery.
The battle lines in Wednesday’s debate echoed those laid down on Tuesday, as moderates argued for a role for private insurers in the managed-care business, while progressives pushed for a government-run system that would eliminate the private health-insurance industry.
The debates made clear that the divide over how Americans should pay for health care is the key issue splitting the Democratic field. That means that arguments over Medicare for All could hold the headlines until a Democratic presidential candidate is finally chosen next spring.
Managed-care stocks have, in the past, reacted violently to talk of Medicare for All. They tanked in April, after Sanders reintroduced his Senate bill pushing the measure. The stocks have stabilized since then, but investors should be ready for months of headlines about proposals that, if realized, could wipe out much of the managed-care industry.
Below, some highlights from both nights of the debate.
Kamala Harris
Harris’s health plan, announced this week, attempts to bridge the divide between the progressives and the moderates. Harris would expand Medicare access to all Americans, but would allow consumers to choose Medicare plans operated by private insurance companies, as in the current Medicare Advantage program.
“I designed a plan where...there will be a public plan, under my plan for Medicare, and a private plan, under my plan for Medicare,” Harris said Wednesday.
Joe Biden
Biden, who supports creating a public option but wouldn’t limit the role of private companies, said Harris’s plan would be too expensive. “If you noticed, there is no talk about the fact that the plan in 10 years will cost $3 trillion,” he said. “You will lose your employer-based insurance.”
He also stood by his former boss’s signature legislative victory. “Obamacare is working,” he said. “The way to build this and get to it immediately is to build on Obamacare.”
Bill de Blasio
New York City Mayor de Blasio, a progressive, pushed back on the idea that Americans want to keep their employer-based health plans. “What I hear from union members and from hardworking, middle-class people is they wish they had better insurance and they’re angry at private insurance companies that skim all the profits off the top and make it impossible for everyday people to get coverage like mental care,” de Blasio said.
“I don’t understand why Democrats on this stage are fear mongering about universal health care,” he added later. “It makes no sense.” He later clarified that he was talking about Sen. Michael Bennet.
Michael Bennet
Bennet, who represents Colorado, also backed a public option, saying Democrats should “finish the job we started with” Obamacare, and opposed the progressives who would limit the role of private insurance companies. “As Joe Biden said, we don’t need that,” he said.
Kristen Gillibrand
The New York senator argued against managed-care companies having a role in the health-care system. “I’m sorry, they’re for-profit companies. They have an obligation to their shareholders. They pay their CEO millions of dollars. They have to have quarterly profits,” she said. “They have fat in the system that’s real and it should be going to health care.”
Bernie Sanders
On Tuesday night, Sanders kicked off the debate by defending his Medicare for All plan. In Canada, Sanders said, “they guarantee health care to every man, woman and child as a human right. They spend half of what we spend. And by the way, when you end up in a hospital in Canada, you come out with no bill at all.”
John Delaney
Delaney, who is polling at less than 1%, argued early in the Tuesday debate that consumers should be able to keep their private insurance. “We can create a universal health care system to give everyone basic health care for free,” he said. “But we don’t have to go around and be the party of subtraction, and telling half the country, who has private health insurance, that their health insurance is illegal.”
Elizabeth Warren
Warren, who, like Sanders, supports Medicare for All, attacked private insurance companies on Tuesday. “The basic profit model of an insurance company is taking as much money as you can in premiums and pay out as little as possible in health-care coverage,” she said.
Pete Buttigieg
Buttigieg tried to carve out a middle path Tuesday night, saying he was for “Medicare for All Who Want It.” He has previously proposed offering a Medicare buy-in option for people not otherwise eligible. “If people like me are right that the public alternative is going to be not only more comprehensive, but more affordable than any of the corporate options around there, we’ll see Americans walk away from the corporate options into that Medicare option,” he said.
John Hickenlooper
Hickenlooper also backed a public option, saying his plan “allows some form of Medicare” that is a “combination of Medicare Advantage and Medicare.”
“It would be an evolution, not a revolution,” he said.

https://www.barrons.com/articles/what-the-democratic-debates-mean-for-health-care-investors-51564665029?mod=djem_b_reviewpreview_20190801

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