Health care investing in a ‘post-Obamacare’ world

President Trump announced on October 16 that the Affordable Care Act, commonly known as Obamacare, is “dead.” How should investors interpret this new level of uncertainty introduced into the health care system? First, it’s important to clarify that Obamacare is still the law of the land and that taxpayers will pay a penalty if they do not have insurance as the law mandates. But the law has been thrown into disarray, to be sure. Here’s how. Last week, Trump signed an executive order bolstering short-term insurance policies, and later that day announced the end of $7 billion in cost-sharing subsidy payments to health insurance companies. Bipartisan congressional efforts to fix the subsidy program notwithstanding, this is expected to raise premiums in the individual insurance market and have untold effects on industries in the health care sector, which makes up one sixth of the U.S. economy. Hospitals and insurers could take a hit On a structural basis, this news looks bad for hospitals first. Hospital groups could see their bad debts go up if more people opt for “skinny” plans, and traffic could be driven lower very quickly. If behavioral health, substance abuse care, and other essential health benefits are not

October 20, 2017 No Comments

Obamacare and physician salaries

Relative to the general population, doctors have higher salaries. Think of this as repayment for taking on six-figure student loan debt, spending eight years in school, working upwards of 100 hours a week for another half dozen years, and making less than the median national income during residency. But will high physician salaries become a thing of the past after Obamacare’s implementation? The actual effects of Obamacare on physician salaries, like most long term consequences of the legislation, are unclear. Physicians opposed to the plan say that because it requires insurers to keep plan costs low while simultaneously covering a broad range of services, insurers will need to control what doctors do and limit what they’re paid. For the government to help make the arithmetic work, Medicare billing rates are the most likely targets as much of the private market is priced according to Medicare schedules. Several decreases to reimbursements rates have already been recommended by the Medicare Payment Advisory Commission, such as a cut to what Medicare pays specialists and the subsequent freezing of these lower rates for years. Proponents of the law say that Obamacare will not have a detrimental impact on their salaries. They point to the

September 11, 2013 No Comments

ObamaCare and your pocketbook

For the millions of people who have individual health insurance, the impending implementation in 2014 of the Patient Protection and Affordable Care Act (PPACA), popularly known as ObamaCare, is of great concern. The focal points of this landmark legislation is the mandate which requires every American to have health insurance and prohibits health insurance providers from denying coverage to anyone regardless of their current medical condition. The effects of these aspects of the new law on insurance premiums are not uniform. They will vary from state to state and person to person. Where Obamacare hurts In states such as Indiana, Ohio, and Florida, which are lightly regulated and do not require coverage to all who apply, people may see their individual health insurance premiums increase. This is due to the fact that individuals who could not previously get insurance for various health reasons will finally be granted coverage, increasing the expense to insurers and hiking premiums. By comparing a trade association’s report of premiums for all plans available today with the average premium expected on the health insurance exchange being set up to comply with the PPACA, the state of Ohio reports that there will be an average increase in

August 15, 2013 No Comments