Obamacare and the Sequester: What You Need to Know

More news out of Washington with eight days left in open enrollment.

Mar 23, 2014 at 7:30PM

Did you know that the sequester could affect Obamacare?

The Centers for Medicare and Medicaid Services, or CMS, recently released a draft letter indicating that it intends to implement the 7.3% sequester cut to reduce reinsurance fund by $731 million. The reinsurance fund is designed to reimburse insurers who lose more than 8% on their public exchange plans, mitigating the risk of major losses so the insurers have an incentive to participate in Obamacare. This reduction may sound like a lot, but it will only matter if insurers start losing a significant amount of money on the public exchanges.

How likely is that? Well, Aetna (NYSE:AET) and Humana (NYSE:HUM) have both reported that they anticipate losing some money on the exchanges in 2014, but whether it will be enough to trigger payments from CMS is still unknown. WellPoint (NYSE:ANTM) anticipates making a small profit from the public exchanges, so the reinsurance fund would not be used in that case. Nonetheless, if insurers start losing significant money, they may leave the exchanges -- threatening Obamacare's success in the long term.

It wasn't all bad news from CMS this past week: Hospital operators received a welcome reprieve when CMS announced an extension of the Medicare-Dependent Hospital and Low-Volume Hospital programs for an additional six months. This would particularly affect LifePoint Hospitals (NASDAQ:LPNT), which operates primarily in rural areas.

In the following video, Motley Fool health-care analysts David Williamson and Michael Douglass discuss these and the other major Obamacare stories coming out with only eight days left until enrollment closes.

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David Williamson and Michael Douglass have no position in any stocks mentioned. The Motley Fool recommends and owns shares of WellPoint. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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