Nothing like a good snowhoe trip to get the heart pumping. But watch out for avalanches! <g>
I don't usually copy fee-based articles, but consider this as a sample of Cramer's stuff...
Medical Insurers Don't Deserve This Hit
By James J. Cramer
RealMoney.com Columnist
10/20/2004 10:54 AM EDT
URL: thestreet.com
Aetna (AET:NYSE) and UnitedHealth Group (UNH:NYSE) and the rest of the medical insurers remain under pressure today, so let's review where we are with the regulators.
First, it is true, it has been true and it always will be true, that various arms of government will review the practices of these companies. They are no strangers to scrutiny; they are hot-button companies.
Second, I have no doubt that New York Attorney General Eliot Spitzer, as well as the state of Connecticut and the state of California, are scrutinizing everything these companies are doing. (In the interest of full disclosure, Spitzer was an investor at Cramer Berkowitz, the hedge fund I founded.)
Third, I also have no doubt that the medical insurers' price increases have upset people. But let's face it, medical costs have been going up, so it isn't like these companies are making money in a vacuum. That does matter, because costs weren't going up in insurance brokerage but commissions were.
Fourth, unlike the insurers, I believe that, at least in the case of UnitedHealth, the company has been unpopular with the various agents out there because it has been actively working to lower the commissions. The agent channel's been livid about this. That's quite different from the collusion that compromised the insurance process as Marsh Mac (MMC:Nasdaq) was indicted for. As a small-business person, I am aware of this tension and it is quite different from what I have experienced when I was working with AON (AOC:NYSE) and Marsh Mac for policies.
Finally, unlike the unregulated and highly opaque practices of the Marsh Macs and the AIGs, the United Healths and the Aetnas live in a total fishbowl; always have, always will. To equate the secretive, obfuscatory behavior of Marsh Mac with the way that either Aetna or UnitedHealth has dealt with the authorities is just plain ridiculous.
So, sure, they are being investigated. Sure, they have been investigated. Sure, they will be investigated.
Business as usual, not worth the clubbing these companies have been taking.
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At the time of publication, Cramer was long UnitedHealth Group. |
