Well, it is over. Scott Brown is a new Senator, so the assumption is that Brown is the big “winner” in this election. Yes, but he is not at the top of the heap. Maybe it is the Republicans? Good guess, but wrong again.
We do know who the losers are: it would be anyone in America who has the misfortune to fall ill without any (or adequate) health insurance. But as to the winners, there you have to dig a bit deeper than the choices mentioned above.
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So who would that be? Well, first, it is the health insurance companies and big pharma. But, even higher, at the very tip top of the heap is a very few millionaire and billionaire executives of these companies, and when I describe their “winnings” you will be stunned. Yes, that is exactly the gift the common folks, the average guys, the pickup truck crowd of Massachusetts gave to this elite group. I am not sure they intended to do that, and surely they were unaware of their massive gift.
On Tuesday, Jan. 19, the stock market gained over 100 points on the Dow; a significant part of that was the insurance companies and pharma. This was clearly reported by the major media. United Health, Humana, Aetna, Lilly, Merck, and the others all shot up by major increases (some as much as 7%+). Virtually all reached their 52 week highs. As a few examples over the past 52 weeks, United Health has gone from $16 to $36; Humana from $18 to $52; Wellpoint from $29 to $69…and, well you get the point.
How did this happen? Well according to Market Watch (note, it is a WSJ subsidiary, and certainly not a liberal lapdog): “The nation’s biggest health insurers acknowledged funding TV ads (through AHIP, the healthcare industry lobbying group) designed to kill or water down the health-care overhaul measure, after a published report said the spots were paid for in secret to avoid a public-relations fiasco. Citing health-care lobbyists, the National Journal (a leading source of non-partisan reporting on political events) said each insurer secretly put up at least $1 million and that the organization as a whole contributed $10 million to $20 million dating back to last summer.
“…it was reported that AHIP solicited the funds and funneled them to the U.S. Chamber of Commerce to underwrite the ads. Two business coalitions set up and subsidized by the chamber were responsible for the ads, the story said.
“AHIP started funding the ads last summer as the industry came under fire from lawmakers and the Obama administration over high profit growth and abuses.
“But AHIP did not want to fund the effort directly, for fear of running up against the same public relations problems that the industry encountered with its ‘Harry and Louise’ ads that helped kill health-care reform under the Clinton administration.
“AHIP did not fund the entire effort, the story indicates, as the Chamber spent $70 million to $100 million on the ads.”
So, the health care industry has invested incredible sums to both lobby Congress and persuade the American public (that’s YOU, Massachusetts) that health care reform is not really needed or desirable. And it paid off handsomely on Tuesday. So, they were certainly big winners with enormous increases in valuations and capitalizations of their corporations in one election. But that is not the worst of it, because there is one other group that won even more; and I suspect if the voters of Massachusetts really knew who benefited, and by how much, they would be mighty angry at the deed they had done.
Again, I return to data from Market Watch, which is well documented, and clearly not skewed to the left. I will quote below:
“What do these stock gains mean for the honchos (the top men and women at these corporations)?
“Plenty. Top executives and directors tend to be compensated mostly in stock, including shares, restricted shares, options, and other equity-related doodads. These tend to be couched and designed in a myriad of different ways — for example some awards only have value when shares rise above a certain price, while others may not be formally transferred into the executive’s hands, a process known as “vesting,” for years. When the shares go up they are worth more.
“…You can run some rough numbers. By (the WSJ Editorial Team) math, the top figures at the big five health care companies — have certainly shared well over $100 million in gains on their stock and options in the last three months (emphasis mine). Consider UnitedHealth. Its proxy says that as of April 3 of this year the top 18 figures at the company — including executives, incoming directors and outgoing directors — effectively owned 19.85 million stock shares among them, including 6.3 million common stock and another 13.5 million shares deemed beneficially owned as a result of equity awards, such as options, that they could exercise in short order. The $7 gain on UnitedHealth stock since the lows in early October may seem of merely technical interest to those who follow public affairs from outside Wall Street, but a $7 gain on 20 million shares and options would be worth a thumping $140 million.”
“UnitedHealth was at the center of a major scandal a few years ago for ‘backdating’ executive stock options. The company effectively fiddled the awards made to William McGuire, then the chief executive, to fatten his wallet.”
I might add to the above, Maguire also received a $1.2 BILLION Golden Parachute when he left the company (later partially returned under a fire of criticism that was even too obscene for him to counter). I remind you (and the voters who just gave these gifts to a comparatively few millionaires, this is our money, our premiums, our implied insurance coverage that is being used to lobby against us, enrich top executives, and turn elections just as they did with you!
Now, since no one in Massachusetts knows these elite executives, yet they have enriched them immensely, I will take this opportunity to thank the voters of Massachusetts, on behalf of these health care executives, for the generous gifts of MILLIONS you, the voters gave them — to be added to their already hefty compensation (CEOs of health insurance companies average over $10 million in salary alone annually). To those common folks, average guys, and the pickup crowd of Massachusetts…thank you for making this possible. In fact, thanks a million!