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Obamacare's Medicaid Expansion Could Mean a Windfall for These 3 Stocks

By Dan Carroll - Mar 20, 2014 at 9:30AM

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The Affordable Care Act's state-by-state Medicaid expansion has added millions of new Medicaid customers, and the future could be even brighter for top Medicaid players such as Centene and WellPoint

Obamacare has fundamentally transformed the health-care landscape in 2014, with millions of Americans signing up for health insurance coverage under the new law, with the expansion of Medicaid accounting for a great deal of insured growth. Recent data from Gallup shows the number of insured Americans covered primarily by Medicaid gaining 0.8% from the fourth quarter of 2013 to the first quarter of 2014.

The change may not stop there. Advisory firm Avalere projects 38% managed care Medicaid growth between 2013 and 2016 under Obamacare. That could mean a huge new market to fight over for big players in the Medicaid scene, from small insurers such as Centene ( CNC 2.27% ), which manages Medicaid subscribers as the majority of its membership base, to America's largest insurers such as WellPoint ( ANTM 1.89% ) and UnitedHealth Group ( UNH 1.00% ).

What could this mean for investors in the health insurance sphere? In the video below, Motley Fool contributor Dan Carroll takes you through three top stocks in the insurance industry poised to capitalize on Medicaid's expansion in 2014 and coming years -- thereby potentially earning big rewards for investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Centene Corporation Stock Quote
Centene Corporation
$73.40 (2.27%) $1.63
UnitedHealth Group Incorporated Stock Quote
UnitedHealth Group Incorporated
$464.73 (1.00%) $4.62
Anthem, Inc. Stock Quote
Anthem, Inc.
$411.24 (1.89%) $7.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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