Will Obamacare put a lump of coal in your stocking this Christmas?
Figuratively speaking, it just might. Several aspects of the Affordable Care Act could result in negative consequences for many Americans. Here are three that could make your holiday season less merry.
1. Lose your current health insurance
Like it or not, an estimated 15 million people are losing their current health insurance plans as a direct consequence of Obamacare. The American Enterprise Institute, a not-for-profit think tank, thinks that number could go a lot higher -- to as many as 100 million.
The primary culprit is a requirement in Obamacare that health insurance plans meet minimum benefit standards. Insurers offering plans that didn't include all of these benefits began sending out cancellation notices to policyholders to comply with the law.
A public backlash led President Obama to tell insurers that they could continue to temporarily offer those plans. However, that decision was too late for some companies. Aetna (NYSE: AET ) , for example, said that there simply wasn't enough time to jump through the regulatory hurdles required to reinstate or extend plans that were canceled. For many who liked their plan from Aetna or several other insurers, they won't be able to keep them.
That's not to say that the replacement insurance will necessarily cost more, though. Families USA, a proponent of the Affordable Care Act, conducted a study that found most Americans losing their current health insurance plans won't pay more for a new plan, thanks in large part to federal subsidies.
2. Increase your health insurance costs
John Mackey, CEO of Whole Foods (NASDAQ: WFM ) , says that the Affordable Care Act will push health insurance costs higher. Obamacare's mandate to offer more benefits will make insurance more expensive, according to Mackey. Whole Foods and other employers face either passing those costs along to its employees or holding down wage increases -- or both.
Individual health insurance premiums could also be more expensive for many, according to an analysis by Sector & Sovereign Research, or SSR, an investing advisory firm. SSR looked at individual plans on the Obamacare exchanges in seven states. This will hit younger Americans the hardest. Premiums for a 21-year-old male jump 81% under Obamacare, according to SSR.
The good news is that for individuals making less than twice the federal poverty level, federal subsidies will actually reduce insurance premiums. But for everyone else -- the Affordable Care Act isn't so affordable.
3. Cause you to lose your doctor
In 2009, President Obama stated that "if you like your doctor, you can keep your doctor." For some, though, Obamacare could result in having to switch physicians.
The issue is that to keep premiums from going up too much with the expanded benefits required by the Affordable Care Act, some insurers opted to restrict their provider networks. That means that many Americans could be surprised when the health plan they sign up for on the now-functional Obamacare website doesn't include their preferred doctors -- or hospitals.
New Hampshire's situation shows how this problem can affect people. Only one insurer, WellPoint's (NYSE: WLP ) Anthem Blue Cross Blue Shield, is participating in the state's Obamacare exchange. There are 26 acute-care hospitals in New Hampshire, but WellPoint's insurance plan includes only 16 of them.
This hospital limitation ripples down to the doctors. If the doctor you use and like isn't affiliated with one of those 16 hospitals (around 26% of New Hampshire's primary care physicans aren't), you can't keep him or her -- unless you're willing to pay a lot more.
With these three possible scenarios, it might seem as if Obamacare could be like the Grinch who stole Christmas. There are some ways to stuff your stocking with pleasant goodies, though -- by buying stocks that benefit from Obamacare's implementation.
Insurers like Aetna and WellPoint stand to gain from the Affordable Care Act's expansion of Medicaid. These two companies have the highest Medicaid memberships as a percentage of total enrollment of all of the major health insurers.
If millions of Americans gain insurance because of Obamacare as hoped for, Express Scripts (NASDAQ: ESRX ) should be a winner. The giant pharmacy benefits manager, or PBM, commands a market share-topping 40%. As more people gain insurance, they'll require more prescription drugs -- driving up demand for programs to contain the increased costs that Express Scripts offers.
Even if Obamacare flops, Express Scripts should still do well over the long run. The government projects that annual spending on prescription drugs will grow 75% by 2021. This kind of growth should make Express Scripts a good stock to own in the coming years.
If Obamacare puts coal in your stocking, just toss a few stocks like these in it alongside that lump of coal. They just might be diamonds one day.
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