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Good article from an investor site:
http://market-ticker.org/archives/2109-Health-Care-Arbitrage-Obama-And-The-Dems.html (bolding mine)
Health Care: Arbitrage Obama And The Dems Yes, I mean it. And yes, I've read the Health Bill. Both the 2,000+ page original and The House changes as voted upon. Here's the bottom line:
Ok, this one's easy. When the fines and pre-existing coverage "stop-out" go into effect (now for kids, in a couple of years for the rest) drop all coverage for those affected. Why? Because:
Screw the government. They are the ones who set the standards - we simply have to live with them, and this is the only logical action to take given what they have just done. Is there a risk in this strategy? Sure. You could have a "zero notice" catastrophe before you (or someone with a power of attorney) could buy a policy. So you have to be able to survive that sort of "short-term" event - but remember, you're going to be banking $10-20k per person during the time you're running "naked." So do exactly that - bank it for a year or two - so you have the ability to cover the instant expense from one of those "aw crap!" catastrophic circumstances. Fact is, they don't happen often and in a year or so you can have a very nice cushion against them. Businesses will be dropping people like flies from business-covered "insurance"; there will be no reason for anyone as an employer to be providing this "benefit" into an environment where insurance prices will double - and probably double twice - in the next four years. If you think not, look at what was done to credit-card holders in front of the provisions of the CARD act going into effect. This, by the way, will bankrupt the insurance companies in the end. Nobody will buy until they have HIV, Cancer or some other serious illness - then they will buy, and the companies will have to pay - with no lifetime caps or exclusions for pre-existing conditions. The health care companies that are getting a rocket shot today in the stock market are being bought by fools. If you have any belief whatsoever in the efficient market hypothesis this is exactly what people will do as the effective dates for these provisions approach, as it will save them ten thousand dollars a year or more - each. The insurance companies will instantaneously lose the "pool" of healthy people who buy against risk - rather, they will have a pool of all sick people who buy against known costs. Forget it folks - this is the end of the health industry in America, and I will be looking for the recognition in the market (as expressed by technical analysis on the stocks in this sector) that the efficient market will come to the fore. The intention of The Democrats (and liberals generally) in this legislation is clear and impossible to hide - they intend to completely destroy private health care in favor of a fully-government-run single-payer system. The efficient market guarantees this outcome given the law they passed, and they know it. I cannot stop this idiocy but I can sure attempt to profit from it. I am looking to establish the largest targeted short positions of my investing career if and when the technicals confirm that this obvious arbitrage is about to, or is, taking place. This is one place where a fistful of PUTs can easily turn thousands into hundreds of thousands, and is an extremely-high probability play.
;I cannot stop this idiocy but I can sure attempt to profit from it. I am looking to establish the largest targeted short positions of my investing career if and when the technicals confirm that this obvious arbitrage is about to, or is, taking place. This is one place where a fistful of PUTs can easily turn thousands into hundreds of thousands, and is an extremely-high probability play.