By Peter Roff, Thomas Jefferson Street blog
In his speech to a joint session of Congress Wednesday President Barack Obama doubled down in his support for nationalized healthcare. Hardly a game changer, as Democrats have claimed, Obama reiterated his support for the so-called public option while proposing little that would actually improve the quality of healthcare in the United States.
It's not likely it is going to make much of a difference. CNBC's Larry Kudlow, in an op-ed that appeared Friday, remarked that Wall Street is now betting heavily against the president.
In a strong stock market on Thursday ... health-insurer shares advanced significantly. Cigna increased 5 percent; Health Net almost 5 percent; Humana 3.5 percent; and UnitedHealth Group 1.5 percent. Hospital shares like Community Health Systems and Tenet Healthcare also rallied smartly, climbing about 5 percent each. Drug company Pfizer rose more than 1 percent.
These healthcare stocks would not have rallied the day after the speech if investors believed Obama would get his way on public option. Moreover, any of the plans being presented by the Democrats, even conceptually, will add to the deficit, increase taxes and force many Americans to give up the private insurance they currently have.
Obama's reliance on rooting out waste, fraud and abuse in the existing Medicare program to find the money is little more than a talking point in the same class as the "magic asterisk" invented by Reagan-era OMB Director David Stockman. It's not where the money is. As Kudlow puts it, "There are taxes galore for this $900 billion baby. It includes a 35 percent excise tax on high-end insurance policies, plus billions more in taxes on insurers, drug companies and medical-device makers. Government boards will determine value, quality and quantity for doctors, hospitals and clinical laboratories. Folks who opt out could face a $3,800 tax (based on a family of four)."
It's time to hit the reset button. Congressional Democrats ignore this reality at their own peril.