Health and life insurance companies in the US and abroad have nearly $4.5 billion invested in tobacco stocks, according to Harvard doctors.
It’s the combined taxidermist and veterinarian approach: either way you get your dog back,” says David Himmelstein, an internist at the Harvard Medical School and co-author of a letter published in this week’s issue of the New England Journal of Medicine.
The largest tobacco investor on the list, the 160-year old Prudential company with branches in the US and the UK, has more than $1.5 billion invested in tobacco stocks. The runner-up was Toronto-based Sun Life Financial, which apparently holds over $1 billion in Philip Morris (Altria) and other tobacco stocks. In total, seven companies that sell life, health, disability, or long-term care insurance, have major holdings in tobacco stock.
Why is it a big deal? “If you own a billion dollars [of tobacco stock], then you don’t want to see it go down,” says Himmelstein, “You are less likely to join anti-tobacco coalitions, endorse anti-tobacco legislation, basically, anything most health companies would want to participate in.”
But with $4.5 billion still invested in Big Tobacco, many insurers are reaping profits from a cancer-causing industry. As Himmelstein puts it, “Is this who we want running our healthcare system?”
Well Surprise, Surprise! Citizens of the United States might want to keep this sort of thing in mind when evaluating the upcoming debate on universal health care. These are the exact same “conservative thinkers” who are dead set against Obama’s push toward universal health care.
One of these days, Americans are going to wake up and start smelling the coffee. These jerks, spending hundreds of millions of your very own health dollars to convince you adequate health care coverage is some sort of Communist plot, actually do have an unbelievably large financial incentive to keep you sick and paying ridiculous amounts of greenbacks to get well.
Thanks, Cinaed
FUD.
The health insurance companies certainly make no money off paying expenses and would rather you live long enough that they can jack your rates when you are 60-70 years old.
Any portfolio worth having has a diversity of stocks in a various segments of the economy.
Is $4.5 billion supposed to be a lot of money to “Health and life insurance companies in the US and abroad”?
Proven time and time, tobacco industry is a safe financial investment….though maybe not currently a popular ‘moral’ one. But then liquor wasn’t ‘morally’ popular at one time either.
In addition, as #1 said, $4.5 billion is a very small number for a whole industry’s investments (specially the size of this industry). To hear some who rant on this site, that’s less $$ than what a couple of thieving executives siphon out of the pockets of the poor – bankrupting them with high medical costs, forcing them to loose their homes.
Wouldn’t investing in tobacco stocks be a natural hedge against their liability portfolio?
Socialized medicine is a bigger problem. Smoking reduces costs in providing health care, so I would expect the government would eventually promote smoking in a socialized medicine scheme. The reason it reduces costs is because you get people dying younger, avoiding non-smoking health care costs at ages 60-90, which more than offsets the smoking related health care costs.
This is completely bogus. I work for a large health insurance company. They have smoking cessation programs and rewards for members who are non-smokers. They provide employees of the company many options for free to help then quit smoking, which would ordinarily be quite expensive. If you look at the costs associated with covering smokers versus non-smokers, it would nullify several time over any gains from incidental investments (funds) in tobacco companies. The numbers are quite staggering. The same applies for obesity, although dealing with that issue is more complicated than smoking.
MikeN. Unless they never go to the hostpital, and just die at home or in an accident, a person’s last few months of living usually account for a significant percentage of their total lifetime medical costs. I can’t find the article I read once that had the exact average. This article here describes the dilemma:
http://www.cahealthadvocates.org/news/disparities/2009/continued.html
My four-thousand dollar flu bills from 2 weeks ago, (911 call, ambulance ride, ER, lab, meds and xray) all went to my chapter 7 laywer.
How many more Americans need to follow the same path as I, into financial ruin because of medical bills?
Really, this is a serious question. How fucking many lives to we have to destroy in the name of medical insurance?
Small cell lung cancer are usually diagnosed in late stage three, which is really stage four. This mean metastases to the bones and other organs. Survival rates for five years are abysmal. For the last few months it’s usually turned over to hospice, which is relatively cheap care. My sister died within five months of diagnosis, my Father in two months. By the way my Dad stopped smoking 25 years before he died, but was a two pack a day unfiltered smoker stating at 13, and quitting at 56.
I don’t think this is a conspiracy, but just portfolio management. Try to buy private health insurance if you’re a smoker, or 10% over optimal BMI as far as that goes. You’ll find out how they feel about it.
Eideard said, “Health insurers want you to keep smoking – WTF?”
No. Just look at the rate tables… A little research would help what’s left of your cred…
Universal Health “Coverage” is a communist plot.
“From Each According To His Ability, To Each According to His Needs”
Of course, Obama will tell you how much you need and how much you will “contribute”. The only sure thing is that you won’t have any say in the matter.
Good thing He cares so much.
WHEN they’re allowed to sell them with other plant ingredients, sales and stock go sky high.
The money for-profit heath insurers are investing is earned by NOT TREATING YOU!
Single payer health care. Now.
If a cure was actually presented to the really sick, can you imagine how many would be put out of work?
Think about it when your Dr. schedules you for another expensive test.
I wonder about it.
Before I went to medical school, I world in a big teaching hospital. Our Chief of Cardiology wrote several articles on the effects of smoking in various cases. He also owned a tobacco plantation in Virginia. He was a smart man and, yet, he saw no conflict of interest. No, he did not smoke. But rumors were he had no heart, either.
To emphasize #8: “60% of personal bankruptcies in the United States in 2007 were caused by health-care costs associated with a major illness.”
consumeraffairs.com/news04/2009/06/bankruptcy_medical_costs.html
A personal story for Hmeyers- when I was a kid, I didn’t want to pay for health insurance either. I was (am- knock on wood) healthy as a horse and saw it as a waste of money. I got it alright, but I bitched about it for the same reasons as you.
Then I needed to have surgery for a double hernia and removal of a pilonidal cyst. It was tough enough with insurance, but without?
Do yourself a favor. S*** happens.
FUD
Not
Health care should not be be a for-profit industry…..we are getting screwed so the Health care CEO’s can get their 3%…I.E it should cost us 4% GDP not 7% GDP
#8 SparkyOne:
“My four-thousand dollar flu bills from 2 weeks ago, (911 call, ambulance ride, ER, lab, meds and xray) all went to my chapter 7 laywer.”
Why did you call an ambulance for the flu?
I had a vicious case of ‘stomach flu’ a couple months ago. I couldn’t stop throwing up, and I live in the desert, so I was extremely dehydrated.
Long story short, I went to the student health center and asked for an anti-nausea medicine that I know works for me. The PA insisted on giving me some new drug that didn’t work.
When I didn’t stop puking, she wanted to send me to a hospital in an ambulance, which would’ve cost me thousands of dollars. I said no way, give me the medicine I asked for.
It was a fight, but I eventually got the medicine, it worked, and I only got stuck with a $300 bill.
Most of the time these people sign you up for the most expensive treatment to cover their asses.
Why did you need x-rays for the flu?
#18:
“Health care should not be be a for-profit industry”
Well, you can kiss all those whiz-bang treatments good-bye then.
Who the hell is going to do it for free?
Universal Health “Coverage” is a communist plot. Universal Health “Coverage” is a communist plot. Universal Health “Coverage” is a communist plot. Universal Health “Coverage” is a communist plot. Universal Health “Coverage” is a communist plot. Universal Health “Coverage” is a communist plot.
——————————
OK. I’m convinced. All my concerns are answered.
——————————
It must be comfortable to have your entire thought processes reduce to bumper sticker slogans.
Here are three things that would solve the healthcare crisis in the country.
• Create a tax credit for health insurance: Instead of encouraging people to participate in the government health insurance program, individuals and families could receive a refundable tax credit to purchase health insurance. This would give them the freedom to choose a plan that makes the most sense for their individual needs.
• Reform the tax treatment of health insurance: Currently our tax code is biased in favor of employer-provided health insurance and against those who purchase healthcare from the individual market. Congress should extend the tax treatment of employer-provided health insurance to individual health insurance. This would make individual insurance more affordable.
• Enable individuals to purchase health insurance from any state: State regulations can greatly raise the cost of health insurance. Instead of being limited to policies issued in their state, individuals should be able to purchase insurance from anywhere in the country.
Of course, it means convincing the government to stop taking so much money from the people. I don’t see it happening, though. They “like” the money flowing to DC.
And if you really, really think government supplied healthcare will make everybody well, think again. It’s already started:
http://tinyurl.com/ku7t42
Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.
Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost- effectiveness standard set by the Federal Council (464).
I do not understand why anyone would want to hand over healthcare management to the Federal government. Where has any level government proved to be efficient, fair and innovative?
I am not saying insurance companies are the model of fairness, just that by giving up choice now, there is no going back.
Think the Feds will take over the insurance companies and make everything fair? Think again. The lobbyists are out in full force. They will remain and the Feds will simply add a layer (or more) to the bureaucracy.
Previously, Obama said he would wait on healthcare. I would wager he knew the outcome of GM, Chrysler and the financial firms would serve as a poignant and timely example of why Federal involvement in your health might not be a wise choice and pushed the timetable up.
No shit. Who didn’t know this already? Does it take research to realize what was obvious years ago? It’s simply a business model.
If believing that universal healthcare is a communist plot is nutty, what do you call believing that the opposition is a tobacco company plot? I call it a typical example of Eidard’s level of critical thinking.
Perhaps the nanny liberals will pass a law (or nowadays, just an Obama decree) that insurance companies can only invest in securities that lose money.
Perhaps a karma-enhanced tofu company.
#20
I never said anyone would work for free.
You are protecting extremely overpaid people who would never care about you.
How many doctors or CEO’s do you hang out with?
#26, Or what do you call the GM bankruptcy where all bond holders (secured debt holders) were told to take hike in favor of the UAW (non-secured debt holders), thus negating decades of bankruptcy law. I sure hope those bond holders take that crap to court and get it overturned. If not, why invest in bonds anymore if the government can just come in and tell you to fuck off?
Obama is completely insane if he thinks GM is going to turn out to be anything other than a more expensive version of Amtrac. And if, by some miracle, it does succeed, are they going to sell off their chunk? Probably not. Hard to get rid of that cash flow to DC.
This is the man you want “fixing” the healthcare system?
#28:
“How many doctors or CEO’s do you hang out with?”
one
knichols, of course end of life health care costs are high. You get those in either case. In the meantime you have saved decades in costs for those who die of smoking.
This logic doesn’t apply to health insurance companies that collect premiums.
But for a government that is footing the bill, it makes a difference. Most preventive medicine schemes end up costing money. Consider an infant mortality regime that spends a little bit of money to reduce infant mortality. The total health care costs will be staggering.
Right now the government makes more money from tobacco sales than tobacco companies.
Insurance companies have a lot of cash that should be invested prudentally. For the last 50 years, Phillip Morris has historically been the best and safest stock purchase you can make – even recently. What do you expect them to do, buy GM? Real estate?
On the converse, it is a public relations disaster waiting to happen.
#29, Liberty Loser,
what do you call the GM bankruptcy where all bond holders (secured debt holders) were told to take hike in favor of the UAW (non-secured debt holders), thus negating decades of bankruptcy law.
I would suggest you actually find out a little bit about what you are talking about. The UAW contracts for pension and medical expenses were written so the pensioners had precidence. There was no bankruptcy law rewritten. Also note that the UAW owns much of the stock and bonds of GM.
What has hurt GM and Chrysler the most is the legacy costs of private health insurance. In countries where GM is doing the best, also have national health services. Most also have a healthier population too.