Tuesday could well be remembered as a turning point in our nation’s health care reform.
Health insurance stocks such as Aetna and UnitedHealthtook a sharp turn lower around lunchtime Tuesday after Republican Senator Olympia Snowe broke with her party and announced that she will vote for a Democratic health care bill.
However, it’s worth noting, Snowe is supporting the bill drafted by Senator Max Baucus, which does not have a public option.
And Snowe’s vote only moves the Baucus bill out of the Senate Finance Committee. She’s made it very clear it doesn’t guarantee her vote on a final version of this bill, which would have to make it through the House.
(Those other bills that you’ve heard Nancy Pelosi speak about are all House bills.)
Nonetheless, it’s conceivable that with her support Democrats now have the 60th vote required to overcome Republican objections to their bill.
"When history calls, history calls," Snowe told her colleagues on the Senate Finance Committee, several hours into the debate. "The status quo approach has produced one glaring common denominator, that is that we have a problem that is growing worse not better," she said in explaining her support for the bill.
While she described the legislation as flawed, she said it bolsters what works in the nation's health care system as well as trying to rein in the rising costs of health care.
What’s the trade?
As far as I’m concerned, nothing has really happened, muses Karen Finerman. I still see so many hurdles. I think the sell-off is an opportunity but I’d only play the space with calls so you limit your losses.
When the rhetoric is at it’s worst I think you take a shot, agrees Guy Adami. I’m a buyer of UNH on the dip.
Our news partner Reuters put together a comprehensive look at the details of the Senate bill. We thought you’d be interested.
INSURANCE MARKET REFORMS
* Creates separate state-based exchanges for individuals and small businesses, with up to 50 employees, to shop for insurance.
* Four categories of minimum benefits would be offered.
* A policy offering catastrophic coverage for young adults, a "young invincible" plan, would be offered.
* Starting July 1, 2013, insurance companies would no longer be able to exclude people from coverage based on pre-existing conditions. Limited-benefit plans and lifetime limits on coverage would be barred. Insurers would be prohibited from rescinding health coverage.
* States could form regional exchanges.
* Beginning in 2015, states must open the business exchange to firms with up to 100 employees and may allow even larger businesses into the exchange beginning in 2017.
* Stand-alone dental plans can be offered through the exchanges.
HEALTH COOPERATIVES, STATE FLEXIBILITY
* The proposal does not contain a government health plan, which is backed by Obama and liberal Democrats but opposed by Republicans and health insurers.
* The proposal provides for the creation of nonprofit "consumer operated and oriented" plans or cooperatives.
* The cooperatives would compete with private insurers in the individual and small-group insurance markets.
* States may establish a federally funded health plan for people earning from 133 percent to 200 percent of poverty-line income.
* States could "opt out" of some requirements if they meet coverage requirements by other means.
MANDATES AND AFFORDABILITY MEASURES
* Beginning in 2013, most U.S. citizens and legal residents would be required to obtain health coverage.
* Provides a sliding scale of tax subsidies for people with incomes up to 400 percent of poverty to help buy insurance.
* Limits deductibles and out-of-pocket expenses. Limits put on a sliding scale based on incomes.
* Exemption allowed for those who cannot afford coverage if costs exceed 8 percent of income.
* Penalties for failure to purchase insurance would be phased in starting with $200 per adult in 2014. By 2017, the penalty would be $750 per adult.
* Medicaid, the healthcare program for the poor, expanded to qualify everyone up to 133 percent of poverty-line income.
* Employers not required to offer health insurance but firms with 50 or more full-time workers would pay a fee for employees who get subsidized exchange policies.
* No fee for workers enrolled in Medicaid.
* Tax credits provided for small businesses that help purchase health policies for employees.
REVENUE-RAISING FEES AND TAXES
* An excise tax of 40 percent would be levied on insurance companies for health plans above $8,000 for singles and $21,000 for families. The tax applies to self-insured and group-market plans but not to plans sold in the individual market. Threshold indexed for inflation plus 1 percent.
* Insurance policies for retired people aged 55 and higher who are not eligible for Medicare and for workers in high-risk professions have a higher threshold of $9,850 for singles and $26,000 for family coverage.
* Health insurance providers collectively would pay an annual fee of $6.7 billion starting in 2010. The fee would be allocated by companies' market share.
* Pharmaceutical companies collectively would pay an annual fee of $2.3 billion, allocated by market share.
* Medical device makers collectively would pay an annual fee of $4 billion, allocated by market share. Some items sold at retail for less than $100 would be exempted from the fee calculation.
Got something to to say? Send us an e-mail at firstname.lastname@example.org and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send your e-mail to email@example.com.
Trader disclosure: On Oct. 9th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (UNG); Finerman's Firm Is Short (USO); Finerman's Firm Is Long Puts & Calls (MDY); Finerman's Firm Owns (BAC), (BAC) Calls, (BAC) Call Spreads, (BAC) Preferred; Finerman Owns (RIG), (PDE); Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (MSFT), (TGT), (PDE), (BRCM), (WMT), (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WLP) Calls; Terranova Owns (JPM), (JOYG), (NOV), (GS); Terranova Is Short (GRMN), (CCL); Terranova Owns Dec. 2009 Gold Futures; Terranova Owns Dec. 2009 Crude Oil Futures; Terranova Owns Dec. 2010 Crude Oil Futures; Terranova Works For (VRTS); Najarian Owns (BRCD) Calls; Najarian Owns (C) Calls; Najarian Owns (DELL) Call Spread; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (GE) Calls; Najarian Owns (JPM) Calls; Najarian Is Short (JOYG) Calls; Najarian Owns (LAZ) & Short (LAZ) Calls; Najarian Owns (MYL) Puts; Najarian Owns (TEVA); Najarian Owns (YHOO) Call Spread
For Zack Karabell
Karabell Owns (FCX)
Karabell Owns (UTX)
Karabell Owns (HON)
Karabell Owns (SINA)
Karabell Owns (EDU)
For Brad Hintz
Hintz owns an Equity Position in (MS)
Bernstein Owns (GS)
(GS) Has Been A Client of Bernstein In Past 12 Months
Bernstein Owns (MS)
(MS) Has Been A Client of Bernstein In Past 12 Months