I think I'll go with a brand name like Wellpoint. Susan Bayh, the wife of milquetoast Senator Evan Bayh (D-Wellpoint), sits on the board. I know I can trust Susan and Evan Bayh to be good stewards of my little nest egg. I know this fine political couple will keep their hawk eyes on the corporate bottom line.

Wellpoint is hurting some these days. Profits are down about 10% but it did beat analysts expectations, so the stock was up yesterday.

The real reason I'm so comfortable owning Wellpoint is because I know when they see that nasty medical loss ratio rising, they are going to redouble their efforts and crack down on costs.

NEW YORK (Reuters)—Health insurer WellPoint Inc. on Wednesday said profit fell 10% as medical costs ate further into premiums, but shares rose more than 5% as results beat projections helped by strength in its pharmacy and behavioral health businesses.

. . .WellPoint's benefit expense ratio, which measures the percent of premiums spent on medical costs, worsened to 83.3% from 81.8% a year ago, on high costs in its Medicare plans for seniors and plans serving mid-size businesses.

Wellpoint has an army of well-trained claims denial specialists and they have a huge arsenal of weapons at the ready.  I can count on Wellpoint to get the job done and get costs under control. Ah yes, as an investor, I feel safe with Wellpoint. This is a take-no-prisoners company when it coming to protecting the value of its stock.

Wellpoint has all the resources of AHIP (America's Health Insurance Plans) which gives advice, counsel and guidance to its members on how to increase premium revenue while at the same time denying care, hence cutting costs.

Wellpoint can also count on a company like IncentOne to get costs under control. IncentOne offers its customers many services even a way to reduce the medical loss ratio. Bingo.  Bring down that medical loss ratio, then all is good in the world. I'm a happy shareholder if IncentOne is on my side, and surely Wellpoint works hand-in-hand with IncentOne.

Health plans face intense competition when it comes to providing solutions to employers, market differentiation and member retention. Health plans must drive healthy behaviors, facilitate consumerism and drive member loyalty. Incentives are critical to achieving these objectives. More than just an advanced marketing strategy, an effective incentive solution is essential to support Consumer Driven Health (CDH) initiatives, reduce healthcare costs for employers, improve HEDIS scores, support pay-for-performance and reduce medical cost ratios.

 These are the reasons why I've selected Wellpoint for my little nest egg. I know I can count on this outstanding American company not to let down the people who count– their shareholders.

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1. Goodbye mandates and insurance-centered coalitions!

Arnold Schwarzenegger’s bill contained an individual mandate, that is a provision that every resident buy insurance from one of the big health insurance companies…no matter the cost or quality.  Supporters of the bill argued that the mandate could be softened by giving subsidies to lower-income people; in other words that the people of the state should send billions of dollars in subsidies to insurers, and guaranteed them millions of new customers.  That’s a non-starter, and not popular among the public.

On the national scene, Hillary Clinton made this mandate her main critique of Obama’s healthcare plan, and the idea has largely dropped of the national agenda atter her loss.

It won’t entirely go away, either in Cali or nationally, as it is marketing heaven for insurance companies and they will push it every chance they get.

The other blowback from Schwarzenegger’s big loss was that the idea of an insurance industry-centered healthcare coalition was discredited.  Schwarzenegger tried to bring together a coalition of progressives with the insurance industry. At the end of the day, the financials simply did not work to both cover everyone and to guarantee all these new profits to insurers, so this coalition blew up. 

On the national level, one hopes that the debate over healthcare  will happen outside of the industry coalition, and that is why it’s so important to marginalize AHIP.

2. From SB 840 to HR 676

Sen. Sheila Kuehl’s bill SB 840 is one step ahead of John Conyers’ HR 676.  Both would transition in a system of Universal Medicare, like every other industrialized democracy can boast of.  Kuehl’s statewide version has now passed the California Legislature twice, and been vetoed by Gov. Arnold twice.  Good news: She’s introducing it again, even if it might not pass till there's a Democratic governor in 2010.

Every health reformer reading this should take a second and read Sen. Kuehl’s words about what she’s doing and why.  The woman is the real deal, and she has shown us how to pass these bills.

I believe we are going to solve our healthcare crisis with Universal Medicare, aka the  single-payer health model, because every other industrialized democracy has shown this to be how we fix the problem. 

At the federal level, Rep. John Conyers bill HR 676 has not gotten as far as SB 840, but is following the lead of lining up co-sponsors and supporters.  HR 676 now has 91 co-sponsors, more than any other health care reform bill enjoys.  It has the support of over 400 different labor organizations, as well as almost the entire  grassroots health care movement.  (No one wakes up and says, “I am ready to go fight for a compromise with the insurance industry today.”) 

Eventually HR 676 will pass, because our health system is broken and the insurers can’t fix it, and this is important work on the way.

3. Cracking down on insurers in the mean time…

You may have heard that LA City Attorney Rocky Delgadillo has made himself a progressive rock star by suing Blue Shield and Blue Cross for their illegal recission of patient policies.  The suits charge that the blues are systematically denying care to patients who deserve.  Delgadillo has sued them for $1 billion and even recommended criminal charges against some of these guys.

That got their attention fast.

Quicker than you can say fundraising payback, Arnold Schwarzenegger jumped in to broker settlements with the companies.  Under the state terms, the companies have to pay back $10 million and re-instate 2,200 policyholders who got kicked off the rolls.  Chump change.

Delgadillo blasted the Schwarzenegger administration:

"They will not make the victims of this insidious practice whole, they will not require that the companies disclose their wrongdoing, and, in my opinion, they will not adequately punish the companies for their shameful conduct."

Fortunately, Delgadillo’s suits are still on-going. 

Even more fortunately, Rep. Henry Waxman is now following Delgadillo’s lead and promises to hold hearings on the insurers’ practice of recission.  He says:

“…insurers are using technicalities or trumped-up ‘misrepresentations’ to rescind policies after individuals get sick and accumulate hundreds of thousands of dollars in medical bills.”

One way we’ll get to guaranteed healthcare is by actually holding companies responsible for their crimes.

What do you think?

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