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The Cause and Effect of Obamacare's Saved Billions

There has been a lot of debate and consternation over the costs of the Patient Protection and Affordable Care Act, commonly known as Obamacare, including whether the new regulations would dramatically jack up insurance policy prices. It turns out that for many Americans $3.4 billion in savings has already been realized, with an additional $500 million in rebates on the way.

In this video, health care analyst David Williamson discusses in further detail what is driving Obamacare's savings and how it impacts insurance companies and investors in the managed care industry.

Still in the dark about how Obamacare might affect you and your portfolio? Don't worry -- you're not alone. To help prepare investors for the massive changes coming to the American health care system, The Motley Fool created a special free report that makes this complex topic easily understandable. Download "Everything You Need to Know About Obamacare" and discover how the law may impact your taxes, health insurance, and investments. Click here for your free copy today.

Follow David on Twitter: @MotleyDavid.

Read/Post Comments (11) | Recommend This Article (3)

Comments from our Foolish Readers

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  • Report this Comment On July 06, 2013, at 10:40 AM, rightislight wrote:

    This is what happens when you have 20-somethings without basic economics education or hands on experience writing about things that have huge structural impacts - like in this case Obamacare.

    The idea that regulating healthcare by forcing down margins is a positive has yet to be seen. This "bro" is using available government data to suggest that there's been a $3.4B "savings" to consumers yet this is the same government office that said Obamacare would cost us more when it's pretty clear, based on early premium pricing it is. Furthermore the loss of discretionary income to those that don't want or need healthcare WILL HAVE a dampening effect on spending - that's not been considered. We know that this administration knows the costs to businesses are enough to dampen hiring - this is why Obama decided to delay the mandatory participation for business for 1 year. That cost is coming and with it fewer jobs - another dampening effect on the economy.

    Now regarding investing. How do you invest in a government regulated (margin regulated) environment? That's a fair question. We know healthcare providers will need to find "creative" ways to deliver stockholder value which from what little I know I would guess would have to be in the form of dividends. But still wouldn't these dividends represent earnings and thus be directly linked to margins? If so there is no dividend growth. SO maybe debt financing/bonds? That could make sense as a foundational element to a conservative portfolio. But overall healthcare providers seem to be, well, not so attractive given regulations. That's is an opinion based on no facts - at least I'm man enough to say that.

    Now, I'm not suggesting that this is all bad, I'm simply pointing out the myopic position presented here that someone Obamacare is "bending the cost curve" for healthcare. This fellow doesn't even have basic facts to back up his claim that this reduction in costs has anything to do with Obamacare. He also completely ignores the clear negative impacts to the economy and to investors.

    Sorry for the rant but I'm tired of MotleyFool's posting articles that have little basis in fact.

  • Report this Comment On July 06, 2013, at 11:00 AM, kahutchins wrote:

    OBAMACARE has already cost us double what we were paying 2 years ago. And praytell who is going to be paying for the rebates? Oh, thats right, the hard working people who have always carried healthcare in the past. Those who struggle to make ends meet every day to stay off the government coffers of welfare and foodstamps and HUD housing.

  • Report this Comment On July 06, 2013, at 11:12 AM, NoMoeMoney wrote:

    Bend over 'bro', if you think this train wreck is going to save billions your an idiot. Only people who pay cash will get QUALITY care, everyone else will get death by delay.

  • Report this Comment On July 06, 2013, at 11:20 AM, triliberty516 wrote:

    Racketeering: A racket is a service that is fraudulently offered to solve a problem, such as for a problem that does not actually exist, will not be affected, or would not otherwise exist. Conducting a racket is racketeering. Particularly, the potential problem may be caused by the same party that offers to solve it, although that fact may be concealed, with the specific intent to engender continual patronage for this party. A prototype is the protection racket, wherein a person or group indicates that they could protect a store from potential damage, damage that the same person or group would otherwise inflict, while the correlation of threat and protection may be more or less deniably veiled, distinguishing it from the more direct act of extortion.

  • Report this Comment On July 06, 2013, at 11:59 AM, ktbonner wrote:

    Nearly every person I know has had their health insurance premiums go up since obamacare passed.

    The few that I know who have not had their costs go up, have had their deductibles increase.

    I have not met a single person who has had their costs drop.

    Admittedly, I have not conducted a nationwide, or even statewide survey, but I do know and work with a lot of people who represent a valid cross section of society.

    Going by my small sample, who are and where are the people who have saved anything?

  • Report this Comment On July 06, 2013, at 12:08 PM, slanciano wrote:

    Ever wonder what's really in store for you involving Obozocare ?

    Bring up this Youtube portal page and type in the following search criteria:

    Know the TRUTH about the Government Health Care Bill

    Click search - then click on one video icons on the left margin

    This is video reading of the law word for word.No propaganda just the facts.

    This ends today's lesson.

  • Report this Comment On July 06, 2013, at 12:11 PM, Dadw5boys wrote:

    If the President had done nothing the Bankrupting of America to pay a Broken Health Care System that was and is still be ing GAMED by many of these Medical Groups that are Corportions that demand a higher profit every Quarter.

    They ise all kind of scams like cold calling the Elderly to come in for unneeded appointments with lies. Just to charge Medicare for 1000's of Blood and Urine Test each month. At over $200 per they are using the Elderly an ATM.

    The Eldery learn fast too if they refuse to come in when called it's hard for them to get an appointment unless they have guts and just go in and demand they be seen.

    A lot of Americans have learned this lesson when they start taking care fo their Parents.

  • Report this Comment On July 06, 2013, at 1:23 PM, dancer70 wrote:

    Read what's really in this krap and see if you think anyone is going to save money.

    Pg 22 - Mandates the govt will audit books of all employers who self insure.

    Pg 29, Lines 4-16 - Healthcare rationing. You can only receive so much care per year. $5,000 per single, 10,000 per family.

    Pg 30, Section 123 - There will be a govt committee that decides what treatments and benefits you receive.

    Pg 42 - The health choices commissioner will choose your healthcare benefits for you. You have no choice.

    Pg 50, Section 152 - Healthcare will be provided to all non-U.S. citizens, illegal or otherwise.

    Pg 58 - Govt will have real time access to individuals finances and a national ID Health card will be issued.

    Pg 59, line 21-24 - Govt will have direct access to your bank accounts for elective funds transfer

    Pg 65, Section 164 - This is a payoff subsidized plan for retirees and their families in unions and community organizations such as ACORN

    Pg 72, Lines 8-14 - The govt is creating a healthcare exchange to bring private healthcare plans under govt control.

    Pg 84, Section 203 - govt mandates all benefit packages for private healthcare plans in the exchange

    Pg 85, Line 7 - AARP members will have their healthcare rationed

    Pg 91, Line 4-7 - Govt mandates linquistic appropriate services, or translation for illegal aliens

    Pg 95, line 8-18 - Govt will use groups like ACORN, Americorp to signup individually for govt healthcare plan

    Pg 102, line 12-18 - Medicade eligible individuals will be automatically enrolled in medicade - NO choice

    Pg 107 - Dhimmitude - Muslims, Amish are exempt and do not have to pay penalties

    Pg 124, line 24-25 - No company can sue the govt on "price fixing" & no "judicial review" against govt monopoly

    Pg 126, line 22-25 - Employers must pay for part time employees and their families

    Pg 127, line 1-16 - Doctors and the American Medical Assoc - The govt will tell you how much money you can make

    Pg 145, line 15-17 - All employers must auto enroll employees into govt plan - you have no choice

    Pg 149, line 16,24 - Any employer with a payroll of $400,000 and above who does not provide govt option, will pay an 8% tax on all payroll

    Pg 150, line 9-13 - Any employer with a payroll between $251,000 and $400,000 who does not provide govt option, will pay a 2-6% tax on all payroll

    Pg 167 - Any individual who does not have acceptable healthcare according to the govt will be taxed 2.5%

    Pg 170, line 1-3 - Any nonresident alien is exempt from individual taxes (you and I will pay for them)

    Pg 195 - Officers and employees of healthcare admin (Government) will have access to all Americans financial and personal records

    Pg 203, line 14-15 - "The tax imposed under this section shall not be treated as a tax"

    Pg 239, line 14-24 - Govt will reduce physician services for medicade. Seniors, poor and low income will be affected

    Pg 241, line 6-8 - All doctors no matter what specialty, will be paid the same

    Pg 253, line 10-18 - Govt sets value of doctor's time, professional judgements, Literally, the value of human life

    Pg 265, Section 1131 - Govt mandates and controls productivity for private healthcare industries

    Pg 268, Section 1141 - Federal govt regulates rental and purchase of power driven wheelchairs

    Pg 272, Section 1145 - Regarding treatment of certain cancer hospitals, Cancer patients will be rationed

    Pg 280, Section 1151 - Govt will penalize hospitals for what the govt dems 'preventable re-admission'

    Pg 317, Line 13-20 - Prohibition on Ownership/Investment: The govt tells doctors what and how much they can own

    Pg 317-318, Line 21-25, 1-3 - Prohibition on Expansion: The govt mandates if hospitals can or cannot expand

    Pg 321, Line 2-13 - Hospitals have the opportunity to apply for exception but community input is required. (ACORN)

    Pg 335, Line 16-25 & Page 336-339 - Govt mandates establishment of outcome based measures: Healthcare the way THEY want it. RATIONING

    Pg 341, Line 3-9 - Govt has authority to DISQUALIFY medical plans, HMO's, etc , forcing ALL into govt healthcare plan

    Pg 354, Section 1177 - Govt will restrict enrollment of special needs individuals.

    Pg 379, Section 1191 - Govt creates more bureaucracy. The Telehealth advisory committee

    Pg 425, Line 4-12 - Govt mandates "Advanced care planning consultation". Seniors will be interviewed every year for health issues and decisions made as to what care they can and cannot receive.

    Pg 425, Line 17-19 - Govt will instruct and consult regarding living will and durable powers of attorney. MANDATORY

    Pg 425, Line 22-25 & Page 426, Line 1-3 - Govt provides approved list of end of life resources - guiding you in death

    Pg 427, Line 15-24 - Govt mandates program for orders for end of life. The govt has a say in how your life ends

    Pg 428, Line 1-9 - And "Advanced care planning consultation" will be used frequently as patients health deteriorates.

    Pg 429, Line 10-12 - "Advanced care consultation" may include an order for end of life plans. AN ORDER FROM THE GOVERNMENT.

    Pg 429, Line 13-25 - The govt will specify which doctors can write an end of life order

    Pg 430, Line 11-15 - The govt will decide what level of treatment you will have at end of life

    Pg 469 - There will be Community based Home Medical services, such as ACORN

    Pg 472, Line 14-17 - Payment to community based organization. One monthly payment to a community based organization (ACORN)

    Pg 489, Section 1308 - The govt will cover marriage and family therapy. (Which means they will insert govt into your marriage)

    Pg 494-498 - The govt will cover mental health services including defining, creating and rationing those services.

  • Report this Comment On July 06, 2013, at 1:55 PM, wooleebooger wrote:

    Well, all the little motley fools had a nice meeting and came up with talking points for their little pro-Obamacare propaganda episode and moved briskly to their foolish little computers and pumped out a bunch of leftist foolishness. What a surprise.

  • Report this Comment On July 06, 2013, at 2:59 PM, doco177 wrote:

    1. Millions are losing the insurance Obama promised they could keep. Because ObamaCare forces employers to offer expensive Cadillac plans but also offers the option of paying a fine for not providing health insurance that can be cheaper than providing it, between seven and twenty million Americans are likely to lose their health insurance coverage according to the Congressional Budget Office. The original estimate was closer to four million.

    2. The cost of healthcare premiums is about to further skyrocket. Premium costs have already exploded, but that is a slow-motion explosion. In the near future, we could see costs double or worse. Naturally, these costs will hit an already burdened middle class hardest.

    3. Lost jobs. Lost jobs.

    The Federal Reserve's March beige book on economic activity noted that businesses "cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff."

    Human resources consulting firm Adecco found that half of the small businesses it surveyed in January either plan to cut their workforce, not hire new workers, or shift to part-time or temporary help because of ObamaCare.

    4. Potential doctor shortages that will mean rationing: The healthcare industry is already a bureaucratic quagmire. ObamaCare is about to add steroids. As the profession becomes tyrannized by government, the talented people currently practicing medicine plan to get out sooner than expected. Who knows how many will choose not to get in. Doctor shortages are what lead to the nightmare known as rationed care.

    5. Somewhere around $800 billion in tax increases will hit America's middle class. This added burden will not only further oppress a middle class already reeling from a drop in wages over the last few years, but could damage the overall economy.

    6. Inflation, the cruelest tax on the poor. When businesses get socked with added costs brought about by higher taxes and burdensome government mandates, they pass those cost along to the consumer in the form of higher prices.

    7. Added bureaucracy. Even those Obama lapdogs over at the Washington Post's Wonk Blog are admitting that applying for health care is about to get more burdensome than the byzantine paperwork involved in buying a home.

    8. To cut costs or to avoid having to provide insurance, workers on the economic margins are already losing hours, which means a lower paycheck. There are a million sad stories in ObamaVille; here are just a few of them.

    9. ObamaCare is projected to add $6.2 TRILLION to a deficit the GAO has already declared "unsustainable." That's "trillion" with a "t".

    10. More taxes than currently estimated are likely to hit because of situations like this one.

    11.Muslims, Amish, Native Americans, Congress are exempt from mandate and penalties under Obamacare that the rest of us have to pay.

    The govt becoming more involved in health care is the reason the costs have increased. So Govt creates a crisis, then provides a solution that comes at the expense of liberty and freedom, costs trillions, and by most accounts won't solve the problem but in fact make it far worse.Corruption, incompetence, disregard of the Constitution, and lying are integral to the way that this country is being run.

    Three years ago, Obama, Democrats, and his media lied to us about cutting the cost of health care, being able to keep our insurance, and not taxing the middle class.

    Today, those lies and what ObamaCare is and will do to the working and middle class are the biggest untold story in America.

    Just refuse obamacare..REFUSE..If only a mere 20% of the over 300 million population of the USA refuse Obamacare the government would be overwhelmed to even think they could penalize or mandate every citizen that refused to participate in the most corrupt and unlawful ways which it was passed that circumvented the constitution of the United States.

  • Report this Comment On July 06, 2013, at 5:04 PM, F00lMe0nce2 wrote:

    Step away from the medical marijuana, and go outside for some fresh air, to clear your head.......

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