Health Care's Losers

http://www.futureofcapitalism.com/2009/09/health-cares-losers

In a Bloomberg column, John Dorfman wonders why shares of Humana, which he owns for "many" of his clients, are trading for only seven times earnings. "The low valuation, I believe, is based on investors' fears about government interference and possible price controls in the health-care field," he writes. Mr. Dorfman says the stock seems cheap and that a health-care-law overhaul could actually benefit Humana, which he describes as "the second- largest provider of health-care benefits backed by the U.S. Medicare program." The company itself apparently is not so confident of the outcome; the Associated Press reports that the company sent its customers a mailing warning them "if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable." Senator Baucus responded by ordering up a federal investigation of the company, the AP reports, which suggests that the investors' fears about government interference may not be entirely groundless. If this health-care overhaul happens, it's hard to believe that everyone is going to come out of it a winner.

by Editor  |  Sep 21, 2009 at 12:36 pm Related Topics:  Health Care receive the latest by email: subscribe to the free futureofcapitalism.com mailing list