Public Option Defeated
The Schumer Amendment to Senator Baucus’ bill in the Senate Finance Committee has failed in a 15 – 8 vote. The Schumer amendment was the more conservative of the two public options in the committee, and was expected to garner some support from centrist Democrats. This is extremely significant as it suggests that the public option will not have a place in any piece of Senate legislation.
It should follow that this is very good news for health insurance companies; indeed they received a momentary pop when the news broke. However, it is still unknown whether or not American lawmakers will burden the sector with large taxes or other obligations.
It is important to keep in mind that this does not mean the public option has been struck out as a whole. Senator Olympia Snowe’s triggered public option is still debatable. Plus, the House was very receptive to the public option.
On the whole, uncertainty is responsible for the sell-off in the sector up to the close, and the probable continued weakening in the near future. A few main stocks in the health insurance sector are Humana (HUM), Cigna (CI), Aetna (AET), and UnitedHealth (UNH).
Posted: September 29th, 2009 under Healthcare, The First Year.
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