http://www.straightstocks.com Leading Stock Market News, Opinions and Commentary Fri, 19 Mar 2010 00:10:25 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 http://www.straightstocks.com/stock-watch/the-gops-health-care-plan-analyst-blog/ http://www.straightstocks.com/stock-watch/the-gops-health-care-plan-analyst-blog/#comments Wed, 04 Nov 2009 22:01:17 +0000 Dirk Van Dijk http://www.zacks.com/stock/news/26896/The+GOP%27s+Health+Care+Plan+-+Analyst+Blog Recently, Rep. Alan Grayson (D-FL) quipped on the floor of the House that the GOP health care plan amounted to: "1) Don’t get sick, and 2) If you do get sick, die quickly." Yesterday, John Boehner (R-OH), the top GOP man in the House, finally unveiled the official GOP plan...and did little to disprove Rep. Grayson.

The GOP plan would allow firms like WellPoint (WLP) and Aetna (AET) to continue to deny coverage based on pre-existing conditions. It would not offer any subsidies to the working poor to help them get covered, and would not require people to buy health insurance, or for employers to offer it.

It would make it harder for people to sue if they are injured by medical malpractice. The use of contingency fees by lawyers in malpractice suits would be strictly limited. Thus, for example, if the doctor misread your chart and amputated the wrong leg, you would have to be rich enough to pay the $150 an hour than most lawyers charge -- and a case like that would take many hours. After it is all done, damages would be limited to $250,000 for non-economic damages. So a low-wage worker would get far less than someone who has a higher income. Punitive damages would be almost impossible to win.

It would however, allow small businesses to band together to buy health insurance so they could get rates more in line with what large employers pay, which is a useful idea. It would also allow people to buy insurance from companies in other states. These policies would be regulated not in the state where the person lives, but in whatever state the insurance company decides to set up shop in. State insurance commissioners in the states where the policies were sold would have no enforcement power over consumer protection.

Since the credit card industry has done such a bang-up job in consumer protection, the GOP decided that it would apply the same model to health insurance. If in the extremely unlikely chance that this ever became law, look for some small state determined to not regulate the industry at all to become the new insurance capital of the country, just like South Dakota is the leading state when it comes to credit cards.

The plan would offer up to $50 billion in "incentive payments" to states that manage to bring down the number of uninsured, and would offer up to $15 billion to help states establish high risk pools and reinsurance programs. Those figures, however, are not per year, but totals over the next ten years -- or $5 billion a year in incentive payments spread among the 50 states and $1.5 billion per year for support of the high risk pools. With 47 million uninsured people in the country (and rising fast due to lay-offs when most health insurance is employment-based), that is nowhere close to adequate.

It also makes available another area where the wealthy can invest their money tax-free through expanded medical savings accounts. That is not going to help the working poor, the people who might be working two or three jobs, none of which offer health coverage. Few of them are even able to take advantage of the existing tax advantaged savings accounts like IRA’s and 401-k’s. Nice little perk though, for those earning well into the six figures who would like to shelter more of their income.

With health insurance costs rising at well over 2x the rate of inflation over the last 20 years, there is nothing in this bill that would force that to change. The reduction in the number of uninsured people in the country would be minuscule. Recently, a Harvard study estimated that 46,000 Americans die each year because they do not have access to health insurance. That is equal to more than another 9-11 every month.

All in all, this bill would be substantially worse than doing nothing. Doing nothing will bankrupt the country within a few decades.
Read the full analyst report on "WLP"
Read the full analyst report on "AET"
Zacks Investment Research
]]> http://www.straightstocks.com/stock-watch/the-gops-health-care-plan-analyst-blog/feed/ 0 http://www.straightstocks.com/stock-watch/no-magic-for-mgic-analyst-blog/ http://www.straightstocks.com/stock-watch/no-magic-for-mgic-analyst-blog/#comments Mon, 02 Nov 2009 18:19:01 +0000 Zacks Market Commentaries http://www.zacks.com/stock/news/26747/No+Magic+for+MGIC+-+Analyst+Blog MGIC Investment Corp.’s (MTG) third-quarter loss of $4.44 per share was wider than the Zacks Consensus Estimate of a loss of $1.64 per share. Last year, the company had reported a loss of $1.06 per share. Increasing delinquent inventory and consequently higher incurred losses drained the results.
 
The company’s loss stood at $971 million from $788.3 million reported for the same period last year, primarily due to an increase in delinquencies. Net underwriting and other expenses were $59.1 million as compared to $62.4 million reported for the same period last year.
 
Total revenues were $413.3 million, compared with $461.6 million in the third quarter last year. Net premiums written were $278.3 million, compared with $365.0 million for the same period last year. New insurance written was $4.6 billion, compared to $9.7 billion in the third quarter of 2008. Investment income was $75.5 million, down 3.9% year over year.
 
Persistency − the percentage of insurance remaining in force from a year earlier − was 85.2% at Sep 30, 2009, compared with 82.1% at Sep 30, 2008.
 
MGIC's primary insurance in-force increased to $216.8 billion, compared to $228.2 billion last year.
 
Net paid claims totaled $417 million, up $37 million on a linked quarter and $87 million year over year.
 
The percentage of delinquent loans (excluding bulk loans) was 13.97%. The level was up from 7.54% recorded last year.
 
Book value decreased 38.9% year over year to $13.18 per share.
 
We continue to remain concerned over the prospects for MTG. Increased delinquencies due to increased unemployment, lower home prices and the ongoing recession caused losses. The deteriorating position of the company was aggravated by yet another rating cut by Fitch as well as Standard and Poor’s. We believe that MTG will be unable to write new insurance until the new subsidiary starts operating, which is awaiting approval from Fannie Freddie as well as from various state insurance commissioners. We are unsure as to new business prospects. Pending further positive developments we will continue to rate the shares as a Hold.
Read the full analyst report on "MTG"
Zacks Investment Research
]]> http://www.straightstocks.com/stock-watch/no-magic-for-mgic-analyst-blog/feed/ 0 http://www.straightstocks.com/financial/securitization-accounting-rules-are-changing/ http://www.straightstocks.com/financial/securitization-accounting-rules-are-changing/#comments Mon, 01 Jun 2009 11:00:18 +0000 Bullish Bankers http://www.bullishbankers.com/?p=14019 http://www.straightstocks.com/financial/securitization-accounting-rules-are-changing/feed/ 0