Election 2012
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WellPoint (NYSE: WLP) Rides the Obamacare Profit Wave Even Higher
Merger Monday lived up to its moniker today with news that WellPoint Inc. (NYSE: WLP), one of the largest U.S. health insurers, inked a deal to acquire Amerigroup Corp (NYSE: AGP).
The $4.9 billion deal would make the Indianapolis-based company the top private manager of Medicaid benefits.
The strategic move underscores WellPoint's bid to shore up its Medicaid business following the recent Supreme Court decision upholding Obamacare. The combined company will have a Medicaid business presence in 19 states, the largest in the nation.
The transaction is expected to close in early 2013. Under the terms of the all-cash deal, WellPoint will pay a lofty $92 a share for all outstanding shares of Amerigroup, a nearly 43% premium to the company's closing price prior to announcement.
WellPoint CEO Angela F. Braly said in a statement, "We believe that this combination will create an industry in the government sector serving Medicaid and Medicare enrollees. This is an opportunity to capitalize on the strengths of both companies to better serve our members and position our companies for future growth as the health insurance industry changes."
WellPoint has been on a buying spree of late. In May, the company purchased contact lens retailer 1-800-Contacts, and last year it picked up CareMore, a provider of managed care for the elderly.
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Obamacare Ruling: Key Takeaways for Investors and Taxpayers
It's time to buy some insurance for your portfolio following Thursday's landmark Obamacare ruling.
The Supreme Court voted 5-4 in favor of President Obama's controversial healthcare reform law, formally known as the Patient Protection and Affordable Care Act.
The chief and appellate justices upheld the core of the law which has sweeping political and economic ramifications. Many economists, analysts and healthcare experts warn it's a Pyrrhic victory at best.
President Obama and his supporters cheered the landmark healthcare decision - as Republicans reached for an aspirin, an antacid or an analgesic.
While the GOP vows to throw out the law on day one if Mitt Romney wins Election 2012, the ruling does remove some of the dark clouds that have been looming over healthcare stocks. The uncertainty of the law's passage has had many market participants staying away from the sector.
Obamacare Ruling and the Average Household
What Obamacare means for the average American working family with an annual household income up to approximately $90,000, is that starting in 2014, they will be able to purchase private insurance through new state insurance markets at prices subsidized according to income level.
Mammograms, cancer screenings and other preventative healthcare measures will be available without deductibles or co-pays.
Adult children can remain on parents' health insurance plans until they are 26. Seniors can continue to receive discounts on prescription drugs, and health insurers will continue to pay rebates on premiums not adequately targeted at healthcare services.
In addition, insurers will no longer be able to deny coverage to adults with a pre-existing medical condition and must stop or limit the practice of discriminatory pricing based on gender, age and current health status.
Furthermore, healthcare providers will gravitate away from the conventional fee-for-service approach toward systems that coordinate care.
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Romneynomics: What You Can Expect if Mitt Romney Wins the Election
Yesterday I wrote about what to expect if President Obama wins a second term in office. Today it's Mitt Romney's turn.
I'd like to look at Romneynomics - the policies that are likely headed down the pike if the underdog Mitt Romney wins in November.
As for the horserace, I think it is President Obama's to lose.
But last Friday's weak employment report indicates again that the economy could slow enough to push Romney ahead.
As with an Obama victory, I think the election will be a close one even if Romney emerges the winner. That means the Republicans will not have an overwhelming majority in Congress.
On the other hand, the Republicans might just get the four seats they need to win the Senate; if Romney wins I assume they will accomplish this. That would give them theoretical control of both the presidency and Congress, but with only small majorities.
The Top Priorities of Romneynomics
As with an Obama win, the first order of business will be to sort out the "fiscal cliff" that comes along with expiration of the Bush tax cuts and the automatic expenditure cuts that will also occur at the end of the year.
With Romney set to inhabit the White House, I expect the solution to this to involve genuine spending cuts--perhaps along the lines of the budget presented by Rep. Paul Ryan (R.-WI).
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Obamanomics: What You Can Expect if President Obama Wins the Election
Now that we are left with a two-horse race for president, the markets are going to begin to handicap the November results.
However, when the markets begin to handicap the race it will be about a lot more than just picking the eventual winner.
Instead, everything will revolve around the policies and consequences that come along with the winner.
The difference in approach promises to be stark with "Obamanomics" on the left and "Romneynomics" on the right.
Each one comes with its own set of consequences, though.
Today I'm going to look at "Obamanomics II," or the policies we will get if President Obama is re-elected.
But those on the left shouldn't despair...In my next piece, it's Romney's turn.
As for the horserace itself, it's too close to call, with neither side having much chance of winning a big victory.
President Obama Has the Edge
Even still at the moment, President Obama appears to be ahead. Apart from his modest lead in the polls, my former home state of Virginia appears to be swinging definitively toward the Democrats.
Yes, Republican Bob McDonnell did win the Virginia governorship handily in 2009, but he was a very good candidate. Moreover, turnout in gubernatorial elections is normally low. Thus I believe the latest polls showing Obama with a 7% lead in Virginia are accurate, and without Virginia Romney has a very difficult path to the presidency.
If we believe the presidential election will be close, then it follows that Congress and the Senate elections must be close, too.
If Obama wins in November, the most likely outcome must be that the Democrats will hang on to the Senate, while the Republican House majority survives, albeit much smaller than at present.
With this combination, the president's more extreme wishes (or those of his team) will be restrained. But as a newly re-elected figure he will nevertheless have more power to get what he wants than he does currently.
Whatever the congressional numbers may be, the president's first task will be to face the "fiscal cliff" of January 2013, when the Bush tax cuts and temporary payroll tax cuts expire and automatic spending "sequestration" comes into effect.
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Election 2012: President Obama Can't Solve High Oil Prices with Trading Regulations
The Obama administration lost its bid to get the Buffett Rule (which would have increased taxes for those earning $1 million or more) passed, so on Tuesday it shifted focus to another battle: Slowing the rise in oil prices.
U.S. President Barack Obama's proposed solution to painfully high prices is to limit speculation in oil markets.
The new bids that the president proposed seek more money ($52 million) for market enforcement and monitoring activities, call for loftier penalties for market manipulation, and require oil traders to put up more of their own cash for transactions.
At a White House press conference Tuesday President Obama said, "None of these will bring gas prices down overnight. But they will prevent market manipulation, and help protect consumers."
The move is in stark contrast with Republicans, who have been lobbying for more domestic drilling to help alleviate the near record-high gas prices. Paying more at the pump takes a bite out of consumer spending and has the potential to stall the slow-going economic recovery.
The maneuver, however, may be focused more on political strategy than consumer interest.
It is extremely doubtful that House Republicans will pass any measure that aims to implement more limits on Wall Street while the GOP looks to reduce regulation of the financial sector.
House Speaker John Boehner, R-OH, called it a political ploy and disparaged President Obama for not using the means already at his disposal to deal with the oil situation.
"The president has all the tools available to him if he believed that the oil market is being manipulated," Boehner said. "Where's his Federal Trade Commission? Where is the SEC? He's got agencies there. So instead of just another political gimmick, why doesn't he put his administration to work to get to the bottom of it?"
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Election 2012: The Real Reason President Obama Wants the Buffett Rule
A new report from the White House today argues that making America's richest (those making over $1 million) pay a tax rate of at least 30% is more a basic issue of "tax fairness" than a way to generate lots of new revenue to the debt-saddled U.S. government.
The tax proposal is dubbed the Buffett Rule, named for its main backer, billionaire Warren Buffett, who says it is unfair that he pays a lower effective tax rate than his secretary. The Buffett Rule ensures millionaires and billionaires do not pay lower percentages of their income than middle-class citizens.
U.S. President Barack Obama, on a campaign fund raising trip, spoke in favor of the Buffett Rule yesterday (Tuesday) in Florida. Democrats are now working on a bill that would incorporate the Buffett Rule into the current tax code, with support from the White House.
The proposal is set for a vote next week in the Senate, and the president has made it a principal element of his plan for deficit reduction.
The White House says the Buffett Rule would make it more difficult for the nation's wealthiest to lower their tax bills and would ultimately make the tax code fairer for everyone.
Critics, however, say it is nothing more than a political ploy in the months leading up to the 2012 presidential election.
The Buffett Rule: Key Campaign Tool in Election 2012
The Buffett Rule is a key theme in President Obama's re-election campaign.
Republicans object to the Buffet Rule as a punitive tax hike on rich that will have little impact on the federal deficit. If the GOP succeeds in blocking passage of the Buffett Rule, the president can paint the Republicans as advocates of an unfair tax policy that benefits only the country's most prosperous citizens.
White House officials acknowledged Monday that the controversial Buffett Rule would yield just $47 billion in additional tax revenue over a decade. That amounts to a paltry 0.6% of the $7 trillion in federal deficits projected for that 10-year period.
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Obamacare in the Balance: Key Takeaways from the Affordable Health Care Act Hearings
Three fast-paced days was all it took for nine justices to grill advocates arguing for and against the Affordable Care Act - better known as Obamacare.
A decision is expected in late June, just months before 2012 presidential elections.
Although it is notoriously difficult to predict U.S. Supreme Court decisions purely based on their questioning, here are my takeaways from these momentous three days.
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Keystone XL Oil Pipeline Project Back in Election 2012 Spotlight
U.S. President Barack Obama announced today (Thursday) approval for part of the Keystone XL oil pipeline project - but his move was more about election votes than the country's energy needs.
President Obama said he is expediting approval for the southern portion of the Keystone oil pipeline. That section runs from Oklahoma to the Texas Gulf Coast.
The president told workers in Cushing, OK today that he was making that part of the Keystone XL project a "priority." The president said he remains committed to the project and defended his earlier rejection of the pipeline.
He blamed Republicans for insisting upon an application approval deadline that caused a rushed decision.
"Unfortunately, Congress decided they wanted their own timeline," President Obama said. "Not the company, not the experts, but members of Congress who decided this might be a fun political issue decided to try to intervene and make it impossible for us to make an informed decision."
The southern segment of the pipeline, however, is already planned to start construction in June, and is not the focus of the project's controversy. In fact, more than 99% of property owners in the southern route where the pipeline will run agree to it.
Instead, the president's announcement was more politics than progress - and triggered ample criticism from Republicans.
Many GOP members bashed the president's announcement as "meaningless."
A spokesman for Rep. John Boehner, R-OH, compared the news to "the governor holding a press conference to renew my driver's license -- except this announcement still leaves American energy and jobs behind."
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