Don't Believe This Obamacare Cost Projection

We all know that most forecasts are worth less than the paper they're printed on. That's probably the stance you should take with some new cost projections for Medicaid expansion under Obamacare.

Here's what you should know: The Supreme Court upheld Obamacare, but left it up to states to decide whether Medicaid should be expanded. One state, Arkansas, is unique in that it wants to use private insurance exchanges to expand Medicaid. The problem is that private insurance is much more costly than traditional Medicaid managed care programs. But conveniently, a new study from Arkansas (of all places) says that Medicaid costs will only around cost 15% more. In the following video, Fool bureau chief Brenton Flynn explains why he disagrees.

What does this mean for Wall Street? If this new Medicaid expansion strategy gains traction, investors in more mainstream insurers like WellPoint (NYSE: WLP  ) and UnitedHealth (NYSE: UNH  ) could benefit, while Medicaid managed care companies such as Centene (NYSE: CNC  ) and Molina Healthcare (NYSE: MOH  ) might lose out on some business. It's not obvious how this will shake out yet, but Flynn says investors should stay tuned.

What macro trend was Warren Buffett referring to when he said "this is the tapeworm that's eating at American competitiveness"? Here's a hint -- it's related to the video above. Find out for sure in our free report: "What's Really Eating At America's Competitiveness." You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2325722, ~/Articles/ArticleHandler.aspx, 10/30/2014 7:46:11 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement