Donald Johnson

Health Care Stocks Anticipate Weak Reform Bill, If Any

www.intrade.com shows speculators think there is a 30% chance that health care reform will be enacted before midnight Dec. 31, 2009, down from 46% about three days ago.

Link is here: www.intrade.com/

Health insurers' and hospital companies' stocks are soaring in anticipation of a watered down health deform bill or, even better, no bill.

Link is here:

www.businessword.com/

The consensus that's emerging, in other words, is that Obama's press conference last week hurt the drive to Canadianize health insurance markets in the U.S.

Significant minorities of Dems in the House and Senate are showing the common sense to oppose putting the politicians who created the failed Medicare and Medicaid and VA Health Systems in charge of fixing our health insurance markets. Ted Kennedy's old single-payer plan, which has failed to provide quality and affordable care in every country in which it's been tried, won't work in the U.S. either.

Health Care Stocks Anticipate Weak Reform Bill, If Any

As I've blogged many times, most of the problems with the health insurance markets could be resolved with some changes in state and federal insurance regulations that wouldn't cost taxpayers a dime.

If ObamaCare goes down the drain, maybe the hard left members of Congress who've been blocking real reforms because they wanted to force Americans into a Government HMO (Fannie Med) will start listening to Sen. Jim DeMint and others who have better ideas than Teddy Kennedy and Henry Waxman.

Is There a Legitimate Case for the Healthcare Providers ETF?

Although I wrote months ago that health executives weren't very concerned about the elections, I think they have to be now.

Many health stocks are depressed and they will be until the uncertainty about Obama's proposed nationalizing of the health insurance markets is resolved. We don't know exactly what he'll try to get through Congress. And we don't know whether the GOP will be able to kill or modify Obama's plans. Clinton had basically the same majorities in the House and Senate that Obama will have, and he couldn't get Hillary care enacted.

The public mood, of course, is much different today. Insurers shoot themselves in the foot every day, and consumers and politicians are sick of them. They are much harder to defend today than they were in '93 and '94. So I think enough GOP senators will support Obama to get something done.

But the markets aren't sure, yet. Uncertainty is a market killer.

In addition, with higher co-pays and deductibles, the health insurance and health care markets are acting much more like normal markets despite all of the governmental distortions.

This is hurting demand for insurance, medical devices and medical services. This is shown in the depressed prices of hospital company stocks.

So, if you're going to play the health ETFs, play the technicals as much as the fundamentals, which are very cloudy at this point, imo.

Why Dividend Investors View Stocks Differently

Writing covered calls on KMP and other dividend payers is working well for me, too. My problem at the moment is that some of those stocks will be called this month at current prices, unless I roll them up. That raises my purchase price and decreases the dividend yield until I can work them down by selling out of the money calls at strikes where the stocks are less likely to be called. A good place to see how this is done is at coveredwriter.blogspot.... I don't follow his exact strategy, but it's working for him.

Stent Market: Going Through a Shakeup

The question here is, if USA Today is correct about the decline in angioplasty procedures is correct and if it continues, what will that do to medical claims costs for insurers?