Following in the Senate's footsteps, leaders in the House of Representatives revealed late last week their plan for what the bill debated on the floor will look like. Like any major piece of legislation, there are things that people will both love and hate. Let's dive right in and see who could be the big winners and losers.
The bill fails to stop cuts to Medicare doctors.
- Winners: The government and you, indirectly.
- Losers: Doctors, obviously, but also you, indirectly. If doctors are being paid less, they either won't take Medicare patients, or they'll require higher payments from those with private insurance to make up the difference.
The government-sponsored public plan is alive and well.
- Winners: People demanding an alternative choice.
- Losers: Health insurers like UnitedHealth Group
(NYSE:UNH) and Aetna will face additional competition, but it might not be that bad. The Congressional Budget Office estimates that the public plan would have premiums slightly higher than those of private insurers.
A pathway to generic biologic drugs includes 12 years of exclusivity.
- Winners: Biotech companies such as Biogen Idec and Amgen
(NASDAQ:AMGN) , as well as pharmaceutical companies with biologics, such as Eli Lilly's and Bristol-Myers Squibb's Erbitux, will enjoy a longer exclusivity than the five years afforded to small-molecule drugs. - Losers: Generic-drug makers like Teva Pharmaceutical
(NASDAQ:TEVA) , hybrids like Novartis(NYSE:NVS) , and even pharmaceutical companies like Merck(NYSE:MRK) have planned to enter the market once Congress gives the Food and Drug Administration direction on how to approve the knockoffs. Unfortunately, they'll have to wait a little longer before getting their shot at some of the blockbusters.
The bill contains a 2.5% tax on medical devices.
- Winners: The government. We've got to pay for this thing somehow.
- Losers: Medical device makers like Boston Scientific
(NYSE:BSX) and Medtronic(NYSE:MDT) , but possibly the public, if those taxes are also passed along to the end consumer.
Keep in mind that there's still a long way to go. The final bill still needs to be passed by the full House, and then reconciled with the Senate bill, which will likely contain some different provisions. That last step could lead to a health-care stalemate.
What's your favorite or least favorite provision? How do you think this will affect your investments? Sound off in our comments section below.
