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Goldman to Insurers: Health Reform Will Hurt

Who knew Wall Street and teabaggers could agree?

By Harry Kimball, Newser Staff

Posted Nov 13, 2009 9:48 AM CST

(Newser) – Here's a reason for Goldman Sachs to be even more popular with the public: The investment bank has issued research on private health insurers advising that fighting off reform would best for their bottom line. Goldman takes as the “base” case passage of the bill that exited the Senate Finance Committee, under which earnings per share would go up 5% through 2019, but the the value of stock on the market would decline 4%.

If the Finance bill is watered down, the picture is rosier: EPS up 10% and valuation up 47%. No bill is rosier still: valuation goes up 59%. Worst case scenario: If the House bill were to hit the president’s desk, EPS would be off 1% and valuation down 36%. Of course, the Huffington Post notes, have a grain of salt handy: Goldman advertises that it “does and seeks to do business with companies covered in its research,” and the report predicts a bill passing the Senate—in October.

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A health care protest. (AP Photo)

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If no reform at all happens you would see the largest rise in EPS. But what we are doing is just analyzing what the stocks would do under different scenarios. - Goldman official

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Goldman to Insurers: Health Reform Will Hurt