Millions of Americans are concerned about the Patient Protection and Affordable Care Act, also known as Obamacare, and whether it will lead to big increases in the premiums they pay. But many Americans don't realize how the individual-insurance market has worked in the past and the tough choices that its shortcomings have forced on those seeking coverage.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks more closely at the individual health-insurance market and its quirks. Dan notes that individuals have always been at a huge disadvantage in getting coverage, as they lack the bargaining power that large groups have in negotiating lower premiums and more comprehensive coverage. As a result, Dan observes that many individuals chose low-quality coverage, making it hard to compare. Dan concludes with a look at WellPoint (NYSE:ANTM) and UnitedHealth Group (NYSE:UNH) and why investors shouldn't assume that higher rates under Obamacare will translate to higher profits.
Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group and WellPoint 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.