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