Health plans hope defeat of health care reform as Mass. Election Underway

Humana Inc. (NYSE.HUM), Coventry Health Care (NYSE: CVH), Aetna (NYSE: AET), and a whole slew of other health care plan providers and HMOs are up today on hopes – perhaps assumptions – that Massachusetts will seat a Republican senator rather than a Democratic one in the special election underway to replace the late Edward Kennedy. By subtracting one Democratic senator, the GOP will have at least a shot at preventing the required majority President Obama needs to present pass the current version of his healthcare reform bill.

While on the surface, taking healthcare out of the government’s hands and leaving it managed by the likes of Humana Inc., Coventry Health Care, and Aetna seems like a reason to own these names, that’s not necessarily the case in this scenario. Even a Republican victory won’t inherently prevent the bill form coming to the floor for a vote, and even if the bill is defeated, that doesn’t mean these stocks are ownership-worthy.

Nevertheless, sentiment and speculation are ruling the day, and that may put enough gas in the tank to fuel a nice rally from this group…. particularly if Republican Scott Brown is elected.

Michael Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. He leads a team that provides Cybersecurity best practices for healthcare clients, ICD-10 Consulting, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, Insurance Fraud, payor-provider disputes, and consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, stutdies at Harvard Law School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims).

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