- No reform (by far the best possible scenario, according to Wall Street). Insurance earnings are projected to increase by 10% from 2010-2019 while stocks rise an additional 59%;
- The “base” scenario deemed most likely to pass by Goldman execs: a version similar to the Senate Finance Bill (no public option). Insurance earnings are projected to increase by 5% from 2010-2019;
- The “bull” scenario (no public option): a more “optimistic” projection “for reform implementation, which might result from moderation of provisions in the current SFC plan, or result from changes prior to the major implementation in 2013.” Earnings are projected to increase by 9.5%;
- The “bear” scenario: a health care reform bill similar to the House version with strict regulations and a public option. Earnings are projected to decrease by 1%.
A while back I posted several pieces here and here about how an observer could gauge the relative chances of significant healthcare being passed by Congress, simply by looking at the share prices of publicly traded health insurance companies like Cigna, Blue Cross/Blue Shield, Humana, United Healthcare and others. Well, if anyone doubted that Wall Street was actually in a position to influence these things, follow me over the fold for iron clad proof that Wall Street wants reform to fail.The largest investment bank in the world, Goldman Sachs, recently published a private report to stockholders. In it, they broke down their predictions on what would happen to health insurance company stocks under a number of hypothetical outcomes of the current debate. That document was leaked. Here’s an synopsis of their four scenarios taken straight the pages of their cold calculation: