The Patient Protection and Affordable Care Act was at the center of the recent fight in Congress over the debt ceiling and government shutdown. Some lawmakers have called for defunding Obamacare entirely. But many people don't understand exactly what that would mean.
In the following video, host Alison Southwick interviews Dan Caplinger, The Motley Fool's director of investment planning, to find out more about exactly what defunding Obamacare would mean. Dan notes that defunding would leave the Affordable Care Act in place but prevent expenditures of money under the law, including subsidies for health-insurance premiums to eligible recipients as well as state aid for states that comply with certain aspects of the law. Dan then goes on to discuss the impact to business, noting that insurers UnitedHealth Group (NYSE:UNH) and WellPoint would continue to have to bear the burdens of the law while potentially losing some of its benefits. The same is true of hospital companies Community Health Systems (NYSE:CYH) and HCA Holdings (NYSE:HCA), which have hoped that subsidies would mean that fewer uninsured patients would create uncollectible losses at their hospitals. Finally, medical-device makers Intuitive Surgical (NASDAQ:ISRG) and Medtronic (NYSE:MDT) would still have to pay the medical-device excise tax even if Obamacare were defunded. In the end, Dan concludes that defunding would probably be unpopular among the businesses that have counted on Obamacare's benefits to offset its costs.
Neither Alison Southwick nor Fool contributor Dan Caplinger has any position in any of the stocks mentioned. The Motley Fool recommends Intuitive Surgical, WellPoint, and UnitedHealth Group and owns shares of Intuitive Surgical, WellPoint, and Medtronic. 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.