- 8/2, "Edward Jones analyst downgrades health insurers," AP, Bloomberg/Business Week
"The health care reform law, which is
- designed to cover millions of uninsured people,
will squeeze the profitability of the largest commercial health insurers over the long term, making them unattractive investments, according to Edward Jones analyst Aaron Vaughn.
THE OPINION: Vaughn said in a research note his firm was downgrading UnitedHealth Group Inc., WellPoint Inc. and Aetna Inc. to "sell" from "hold" and plans
- to drop coverage on all three stocks at the end of the month.
Those insurers are the only managed care companies Edward Jones covers.
Vaughn noted that the companies all have reported better-than-expected results so far for the second quarter, due in part to better pricing and lower-than-anticipated health care system use. He said those trends likely will remain in place for the remainder of the year.
- But the analyst also sees a host of longer-term concerns facing the industry.
"We are concerned that market structure changes, profit limitations and rebates, and ever-present political/regulatory pressures will negatively impact future profit growth and more than offset the anticipated influx of newly insured members (from reform)," he wrote."...
- via Mark Levin show