Dear Mr. Berko: What do you think of the big health insurance companies, such as Aetna, Cigna, UnitedHealth Group and Anthem? My stockbroker wants me to sell UnitedHealth Group short because he thinks President Donald Trump and his followers are going to cut medical costs by allowing insurance companies to reduce reimbursements to doctors and hospitals, stop covering procedures that can be proved medically not necessary (such as spinal fusions, knee replacements, coronary stents and gallbladder and prostate removals) and demand larger copayments for other procedures. My broker wants me to short UnitedHealth because it’s the biggest, most profitable and highest-priced health insurer of all of them. Because of Trump, my broker believes that health care stocks are in a decline and are not good investments.
— TT, Durham, N.C.
Dear TT: Following this guy’s advice is about as dangerous as chasing chickens on a California freeway. If Trump and company eliminate certain procedures, require higher copayments, etc., health insurers will see their profits rise, not decline. Health care stocks, like defense stocks, if purchased long term, are among the most profitable investments one can make. Your broker’s brain is rolling downhill.
Imagine, TT, if good health were to break out all over the nation. Imagine if humans magically developed an immunity to all diseases and every newborn came into the world as healthy as a horse. Think about it. Wouldn’t that be wonderful? Wouldn’t living in the U.S. be hunky-dory? Wouldn’t everyone be happy? Wouldn’t everybody be fruitful and multiply?
Well, not on your sweet bippy! The answer is “no,” a thousand times “no!” It would be catastrophic, calamitous and cataclysmic! Millions of Americans would be unemployed. Hospitals would close their doors. Medical equipment companies, drug companies, rehab centers and pharmacies would all be out of business. Frankly, the shock would cause the American economy to crumble, the stock market to crash and trillions of dollars to be lost, and along with that, UnitedHealth Group and every health insurer would be forced into bankruptcy.
