Thanks to the sub-prime mortgage crisis and the economic meltdown that has resulted, it will be difficult if not impossible for Mr. Obama to implement any sort of organized healthcare reform, or any other reform that promises to greatly increase federal spending.
One sure thing is that health insurance companies have no hope of even maintaining their current profitability, let alone continuing their growth, solely by doing what they are supposed to be doing – by managing the healthcare of their enrollees.
Over the last two months it has become obvious that when businesses vital to the public welfare are about to fail, the government has little choice but to take them over. This was the case with AIG, with Fanny and Freddy, and to a lesser extent with several major banks. We now see the American auto industry lining up for a bailout/takeover. It is easy to imagine the gasping airline companies forming themselves up into the same landing pattern.
So if you are a health insurance executive, you are probably looking at your current broken business model, lamenting that your savior Mr. Obama is probably not going to be able to come to your rescue with the one last windfall he has promised, and observing what is happening with other “vital” American industries in similar straits. DrRich imagines that these executives have already resolved themselves to a government takeover (indeed, this was the end-game they have long planned once their last Obama windfall played itself out), and that they are merely calculating the right moment for it. How best to divest their stock before hinting that such a takeover is in the works? With careful planning and negotiation, can some of the takeover money be parlayed into executive bonuses, or at least into one last, extravagant junket (a la AIG)? There is no real hurry, after all – whenever the health insurance industry says it just can’t do this any more and that the government needs to take over healthcare, then no matter which other industries the government will have already acquired, what choice will the feds have?