Speaker 1: Broadcasting live to New York Bloomberg eleventh to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg well underd to San Francisco, Bloomberg
Speaker 1: nine to the countries, Chaneral one nineteen and around the
Speaker 1: globe the Bloomberg Radio plucks and Bloomberg got gone. This
Speaker 1: is taking stock. Coming up on taking stock, will take
Speaker 1: stock of Etna, the insurance giant says it's gonna stop
Speaker 1: selling health insurance through most of the exchanges that were
Speaker 1: created by the Affordable Care Act because they're losing money.
Speaker 1: They say they lost four hundred and thirty million dollars
Speaker 1: on the Obamacare plans in the first half of the year.
Speaker 1: Will be speaking to less Fund letter from East Squared
Speaker 1: Asset one of the best of the best on this
Speaker 1: in the business. Another one one of the best invest
Speaker 1: in the business as our own Charlie Palatis and Bloomberg
Speaker 1: Newsroom with the Bloomberg Business Class, and I thank you
Speaker 1: Kathleen Hayes, Thank you pim Fox Etner shares down now
Speaker 1: by four tenths of one percent one eighteen seventy right
Speaker 1: now on. As of that, the Home Depot posted second
Speaker 1: quarter profit up nine point three percent. Also boosted its
Speaker 1: earnings forecast for the eras Americans continue to spree of
Speaker 1: spending on their houses. Michael Lasser is an analyst at
Speaker 1: Home Depot. He was interviewed today on Bloomberg Radio. Characterized
Speaker 1: this as an in line quarter, and yes they did
Speaker 1: slow so quentially, but that was fully expected. The first
Speaker 1: quarter was benefited from and some abnormally warm weather in
Speaker 1: the spring, So this is more typical of what you're
Speaker 1: gonna find at the state of the cycle. We do
Speaker 1: think that we're still in the middle stages of the
Speaker 1: home improvement cycle and this can last for a while.
Speaker 1: So five point four percent growth, if they saw in
Speaker 1: the US, is a good number. And Home Depot shares
Speaker 1: there down now by six tenths of one percent. Rival
Speaker 1: lows down three tenths of one percent. Centers Corp buying
Speaker 1: gm K Services Inc. And a two point two billion
Speaker 1: dollar tie up of providers of workplace uniforms and corporate apparel.
Speaker 1: Shares of both companies are advancing right now. We have
Speaker 1: got G and K It is surging eighteen point one percent.
Speaker 1: Syntas is up five point nine percent. Hayness Celestial Group,
Speaker 1: a supplier of organic and natural products, the whole foods
Speaker 1: market and other grocers plunging the most in more than
Speaker 1: fifteen years after delaying financial results on accounting concern and
Speaker 1: about abandoning its full year targets. Hayne is down now
Speaker 1: by twenty six point eight percent. Again, SMP down nine dropped.
Speaker 1: There are four tenths of one percent. The down down
Speaker 1: sixty eight also would dropped the four tenths of one percent.
Speaker 1: Gold up five tenths of one percent to thirteen forty
Speaker 1: nine neons to thirty two on Wall Street. Now we'll
Speaker 1: look at the other stories making news. Thank you, Charlie
Speaker 1: from the Bloomberg news room. I'm Rami Inessentio. It's day
Speaker 1: two of scheduled three day trial involving Donald Trump in
Speaker 1: West Palm Beach, Florida. Bloomberg spot Moon reports golfers claimed
Speaker 1: the billionaire real estate tycoon shafted them on membership dues,
Speaker 1: but Trump, in a video deposition, can tended his words
Speaker 1: shouldn't always be taken at face value, because sometimes, as
Speaker 1: he put it, it's called negotiation. He conceded he told
Speaker 1: some members that despite what their contracts said, they were
Speaker 1: no longer welcome to use the facilities. While they awaited
Speaker 1: refunds after we took over what's now Trump National Golf
Speaker 1: Club Jupiter. And while he's boasted in the past, I
Speaker 1: think I've been very good for golf. I've taken places
Speaker 1: that were in trouble and I've turned him around. He
Speaker 1: said in his deposition his son hadle negotiations with members
Speaker 1: and he didn't exactly know what the letter he sent
Speaker 1: out actually meant. Bob Moon Bloomberg Radio. Louisiana Governor John
Speaker 1: Bell Edwards is describing the deadly flooding in the state
Speaker 1: as historic and unprecedented. He reassured residents today that emergency
Speaker 1: crews are working around the clock to help anyone in trouble.
Speaker 1: Nobody has been forgotten, Uh it is. This is a
Speaker 1: very difficult situation to get response out as as quickly
Speaker 1: as we would like to. The flooding has killed eight
Speaker 1: people and affected at least forty thousand homes. Pennsylvania's Attorney General,
Speaker 1: Democrat Kathleen Kane, has resigned one day after her perjury
Speaker 1: conviction in a grand jury leak case. Kane was accused
Speaker 1: of leaking grand jury secrets to embarrass a rival prosecutor
Speaker 1: who she blamed for a critical news article and a
Speaker 1: man suspected of gunning down an imam and his friend
Speaker 1: as they left in New York City mosqu will be
Speaker 1: in court today. Police have charged Oscar Morrell with second
Speaker 1: degree murder and criminal possession of a weapon. Global News
Speaker 1: twenty four hours a day, powered by more than twenty
Speaker 1: journalists and analysts in more than one twenty countries. I'm
Speaker 1: Rainy in Essencio. This is Bloomberg, Charlie, and we thank
Speaker 1: you and again recapping the tal the SMPNAZDAC all Moving
Speaker 1: Law SMP five index down nine, a drop there of
Speaker 1: five tenths of one percent. I'm Charlie Palatin. That's a
Speaker 1: bloom Bird business splash. During listening to taking Stock with
Speaker 1: pin Box at Gatlee Hayes on Bloomberg Radio, Healthcare and
Speaker 1: the Affordable Care Act at, which covers about nine hundred
Speaker 1: thousand people through the Affordable Care Act exchanges, is the
Speaker 1: third may you're ensure to pull back from these marketplaces.
Speaker 1: United Health Groups set in April it plans to pull
Speaker 1: out in most states, and just last month, Humana said
Speaker 1: it's going to cut back its offerings to just a
Speaker 1: handful of counties. Here to tell us more about this
Speaker 1: development is Less fund Lighter. He is the health care
Speaker 1: portfolio manager for E squared Asset, and he joins us
Speaker 1: now less thanks very much for being with us, Thank
Speaker 1: you for having me all right now. When you wrote
Speaker 1: your book in two thousand nine, Healthcare Investing Profiting from
Speaker 1: the New World of Pharma, biotech and healthcare services, did
Speaker 1: you foresee a time when the major insurance companies would
Speaker 1: pull out of these government exchanges? Well? When I wrote
Speaker 1: the book, we were just entering into the Obamacare negotiations,
Speaker 1: and I had I had hoped that the government wouldn't
Speaker 1: have gone the exchange route because I didn't think that
Speaker 1: that was a viable strategy. But when they did it,
Speaker 1: then I thought maybe there was a chance, as long
Speaker 1: as the intentives to keep people in the exchanges were
Speaker 1: strong enough. But what's up and subsequently is the the
Speaker 1: penalties aren't high enough um to push the healthy into
Speaker 1: the exchanges, and we've gotten a bad case of adverse selection,
Speaker 1: which has caused the major insurers to lose a lot
Speaker 1: of money, and now they're all pulling out. So is
Speaker 1: this mean Does this mean though, that penalties have to
Speaker 1: be hired? It seems to me that another problem less
Speaker 1: quite frankly, talking to people who have to find healthcare
Speaker 1: and the exchanges, Uh, it isn't just the penalties must
Speaker 1: them to want to pay them. If they look at
Speaker 1: it and say, wow, it's gonna cost me like four
Speaker 1: or five a month, maybe three, I'm going to have
Speaker 1: to have like a five thousand dollars six thousand dollar
Speaker 1: out of pocket, they just say this is still very expensive. Right. Well,
Speaker 1: that that's the key problem, and that was that was
Speaker 1: the where the penalties were designed to overcome. That is
Speaker 1: that it's worth paying the penalty because it's less expensive
Speaker 1: than buying health insurance if you had deductibles and insurance
Speaker 1: and the premiums themselves. And so quite frankly, the insurance
Speaker 1: on the exchange, even at the very lowest level, even
Speaker 1: with subsidies, is out of reach for a lot of
Speaker 1: people other than the people who for whom insurance is
Speaker 1: completely subsidized. Well, Less, the Department of Health and Human
Speaker 1: Services argues that the companies should really just blame themselves
Speaker 1: because they set premiums too low. Does that make any sense? Well,
Speaker 1: the the government put together what's called the three RS,
Speaker 1: which are basically risk adjustments to help encourage insurance companies
Speaker 1: because they didn't have experience on the exchanges before to
Speaker 1: enter the markets, so they didn't have any experience. And
Speaker 1: I would add also that the exchanges, and this I
Speaker 1: think is the government's fault. There's based on something of
Speaker 1: a faulty premise that there are a lot of healthy
Speaker 1: young people that wanted to buy insurance and that turned
Speaker 1: out not to be the case. So it is true
Speaker 1: that they set them low, but they were encourage to
Speaker 1: set them low. And now in order to make a
Speaker 1: profit they have to orally break even. They have to
Speaker 1: uh raise insurance to the point where premiums are unaffordable,
Speaker 1: and you're seeing that with that today. But as you noted,
Speaker 1: U Yamana and United have also pulled out of the exchanges,
Speaker 1: and it would seem to me that there will be
Speaker 1: more to come. Interesting. I know, I saw a study
Speaker 1: a couple of years into um the Affordable Care Act
Speaker 1: noting that actually younger people are much more likely to
Speaker 1: avail themselves and mental health services, and that was actually
Speaker 1: erasing any savings that might have come by enrolling more
Speaker 1: more younger people. What about if the if the exchanges
Speaker 1: weren't state by state. But it helps if it was
Speaker 1: just one national exchange, there's an excuse, Oh well, why
Speaker 1: would you pay the same for our Hart transplant in
Speaker 1: Georgia as New York City? But you know you do
Speaker 1: that with car insurance. Why isn't that way with healthcare? Well,
Speaker 1: it's it's because there are each each state has its
Speaker 1: own insurance UH commissioner, and they're in charge with making
Speaker 1: sure that the plans are viable. Although I would have
Speaker 1: advocated something like a federal reserve system with regional insurers
Speaker 1: as opposed to a state by state, but of course
Speaker 1: I'm not. It's not funt lender care at Obamacare and
Speaker 1: so um, I think that what you have and you
Speaker 1: certainly have it with some there are some start up
Speaker 1: healthcare acts trying to make a go of it too.
Speaker 1: Is that younger patients, to your point, do our utilizers
Speaker 1: more than they had thought, but a lot of them,
Speaker 1: A lot of the young ones are actually staying on
Speaker 1: their parents insurance until the twenty six so you're sort
Speaker 1: of and then hopefully they're employed in their unemployee employee insurance,
Speaker 1: so they're really losing out on a lot of the
Speaker 1: healthy people to offset the sick people who now that
Speaker 1: insurance is available, are joining onto the plans. And I'd
Speaker 1: also add that it appears that a lot of people
Speaker 1: get sick, get insurance, and then once they're well, they
Speaker 1: hop off the exchange. And we've seen a lot of
Speaker 1: that happening, and they do and seemed to be a
Speaker 1: remedy for that. Uh, let's just just a quick thought
Speaker 1: from you, because remember the merger that was supposed to
Speaker 1: happen with Humana, and that's been nixed by the Justice Department.
Speaker 1: Massachusetts Senator Elizabeth Warren coming out, what's she say today
Speaker 1: about this? Well, she said something to the effect of,
Speaker 1: you know, it looked like a quid pro quel on
Speaker 1: the part of it. We'll stay in the exchanges if
Speaker 1: you let our deal go through. And now that the
Speaker 1: FDC has said um no to the deal, or at
Speaker 1: least no not at this moment, uh, that is pulling
Speaker 1: out of the exchanges. And Warren essentially said, well, you know,
Speaker 1: you can argue about this deal, but you should stay
Speaker 1: in and not you know, put people's lives at risk.
Speaker 1: But EDNA is losing a lot of money, and I'm
Speaker 1: not sure that there altruistically obligated to stay on exchanges.
Speaker 1: All right, we're gonna leave it there. Less Fund Ladder,
Speaker 1: thank you so very much for joining us. Talking about
Speaker 1: ETNA leading some leading some more of the big insurance exchanges.
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