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&et s say -.. people walk by your stand each day. And of those people, /. choose to buy... ,/ people don t... and ,/ people would be interested but could only afford a cup for +-. Then, one day, the government passes a law that requires everyone to buy lemonade. 0or your /. e"isting customers, they d continue to pay you the +, a cup they ve always paid. $n addition, though, you d capture +, a cup from the ,/ people who didn t want lemonade but now have to buy it. And for the ,/ who couldn t afford it, the government would pay you to offer lemonade at +-. $n other words, the government would be giving you more customers and paying you at the same time. A pretty attractive deal when you consider that your business would ve grown its revenues -..1 practically overnight. And that a simple piece of legislation would ve made you 2 and your investors 2 a heap of cash. 3ow to be fair, Obamacare doesn t really work like this. 0or one thing, the government has high hopes that the program will lead to lower costs for health insurance 2 to carry the lemonade analogy further, the law would set limits on your ability to charge more than your actual e"penses plus a reasonable profit rather than letting you keep selling at +,. 4oreover, while Obamacare s individual mandate calls for everyone to have insurance, people still have the alternative of not getting coverage and paying penalties instead. 5till, the likelihood is that many more people will buy insurance than before, and that could lead to big gains both for the companies that provide that insurance and the hospitals and other medical providers who serve newly insured patients. All that e"plains why we ve already seen numerous health#care stocks return as much as 7 !"#$ %&!'#$ and even '"!"# since the bill passed. 3ot only are they likely to benefit from huge numbers of new customers6 they re also going to reap profits from government subsidies as well 2 and that means a never# before#seen profit opportunity for investors like you and me... These landmark changes don t happen often. !ut when they do, you need to be ready 'and well informed7) if you want a piece of the profits. 5o stick with us and pay close attention to what 8an has to say about Obamacare s provisions... Then later, $ ll be back to give you the inside track on Obamacare s winning investment formula.
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! -hose without em.loyer-based grou. coverage now will li+ely get better benefits! -/EN0 -/A1KE/2 )s -3 0ead?
:very year, growing numbers of Americans are ;cutting the cord; on the cable T< providers... leaving a vulnerable +,., trillion industry up for grabs. As we speak, tech giants like Apple and =oogle are battling for control. !ut three surprise companies may be the real victors in this behind the scenes T< takeover. 0ind out who they are before all the profits dry up7
One likely outcome of the Affordable Care Act is that the vast ma%ority of individual health insurance plans 2 as opposed to group plans that employers provide 2 will have to provide more comprehensive coverage than they do currently. A ,.-, study from researchers at The >niversity of Chicago found
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that among the roughly -? million Americans who have individual health coverage rather than group coverage through an employer or other organi@ation, more than half of those plans didn t provide enough benefits to qualify under Obamacare s standards. >nder Obamacare, those substandard plans will be replaced by newer coverage.A5ome preliminary figures from state health insurance e"changes show that in many states, that new coverage is coming with higher premiums, especially for those plans that provided much more limited benefits than will be required under the new law. Bhether better benefits will provide enough of an offset to result in lower overall costs will vary from person to person and across different policies. People who have minimal health e"penses will likely end up paying more overall, while those who use their health benefits more often could see cost savings under Obamacare plans.
%! -hose covered under em.loyer-.rovided .lans already have generally strong coverage!
The same study also e"amined people covered under group plans, typically through their employer. The differences in quality were staggering. The study authors divided different insurance policies into tiers based on how much of a patient s medical bills each policy would cover. $n group plans, almost two# thirds of members had policies that covered C.1 or more of their costs, compared to %ust ,1 of those who had to get their coverage individually. 4oreover, thanks to employer contributions, those in group plans paid less than half what individual#plan members paid in out#of#pocket costs. As a result, most people covered by their employers would probably prefer to keep their e"isting coverage. !ut many workers are afraid that employers might choose to discontinue offering health insurance of their own, deciding instead to let Obamacare s other provisions take care of their workers.
'! Whether em.loyers will continue .roviding coverage will de.end greatly on how health insurance e5changes loo+!
8espite fears of widespread employer abandonment of group health# insurance coverage, the ,.-, 3ational 5urvey of :mployer#5ponsored Dealth Plans from D( consulting firm 4ercer found that very few employers plan to cancel their health insurance benefits after Obamacare takes full effect. !ut smaller employers were much more likely to say they would cut coverage 2 with -E1 of employers with fewer than /.. employees planning health plan cuts compared to %ust E1 of employers with /.. or more workers.
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0or many, the decision may well hinge on what the individual and small# business health insurance e"changes under Obamacare end up looking like. 5tates have the choice to run their own e"changes, but if they don t, the federal government will have e"changes to cover their residents. 4any states have already released some details about their e"changes, although others are still pending. Bith open enrollment in the e"changes still scheduled for Oct. -, ,.-F, it should be much clearer soon whether it will make sense for employers to drop coverage even in the face of penalties for some businesses that drop their plans, as well as the loss of ta" credits that some eligible businesses will get for providing coverage.
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Joint filers with wages or other work-related earnings greater than $250,000 and singles earning more than $200,000 will have to pay an additional 0.9 percentage points in edicare ta!, "ringing their total to 2.#5$ for employees or #.%$ for self-employed workers. &mployers are s'pposed to handle this re('irement in their withholding, "'t for twoearner co'ples, that may prove impossi"le, as yo'r employer will have no knowledge of what yo'r spo'se earns. )hose with total ad*'sted gross incomes of more than $250,000 for *oint filers or $200,000 for singles will have edicare ta!es imposed on their investment income as well. +n whatever amo'nt of investments e!ceeds the $250,000 gross-income level, yo',ll have to pay the f'll #.%$ s'rta! yo'rself. )he net effect on high-income earners will "e to "ring total top ta! "rackets to -#.-$ . the #9./$ reg'lar ta! amo'nt pl's the #.%$ edicare ta!.
)hose who earn less than these $200,000 and $250,000 thresholds sho'ldn,t ass'me that their ta!es will "e 'naffected "y +"amacare. 6ew limitations on fle!i"le spending arrangements have hit ta!payers of all income levels, limiting the amo'nt yo' can set aside ta!-free in a fle! plan to $2,500 per year. 7revio'sly, there was no technical 'pper limit, altho'gh most employers
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imposed a $5,000 ma!im'm. 8't for those who have high levels of predicta"le medical e!penses, the forced red'ction in fle!-plan 'se co'ld cost yo' h'ndreds of dollars in e!tra income, 9ocial 9ec'rity withholding, and edicare withholding ta!es. oreover, those who rely on ded'cting medical e!penses won,t "e a"le to get as "ig a ta! "enefit from them. +"amacare raised the floor on itemi:ed medical e!penses from ;.5$ of gross income to <0$. )hat may not so'nd like m'ch, "'t it co'ld red'ce yo'r ded'ction "y tho'sands of dollars and there"y increase yo'r ta! "ill s'"stantially.
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9till, the news isn,t all "ad for dr'g companies. 9o far, they,ve retained most of their pricing power for their dr'gs and avoided what co'ld have "een costly meas'res like allowing importation of dr'gs from lower-cost co'ntries. oreover, if greater n'm"ers of covered 2mericans lead to more pharmace'tical 'se, the profits co'ld offset the costs.
edical-device makers will take the "iggest hit from +"amacare, thanks to the 2.#$ e!cise ta! on their device sales. Civen that the ta! is imposed on reven'e rather than profits, the provision will act as a "arrier to entry to new players in the ind'stry, even as "ig players pay the "'lk of the ta!. 0nd'stry giants +edtronic and 3tr"ker have already seen the impact of +"amacare and will contin'e to deal with headwinds to their "'siness. 8't the worst hit will come from c'rrently 'nprofita"le companies like +AKO 3#rgical, which can hardly afford to deal with "igger losses stemming from the ta!.
Health-ser,ices com'anies
+"amacare will have collateral impacts on many other ind'stries with ties to health care. 7harmacy "enefit manager E.'ress 3cri'ts and its peers sho'ld gain from the need for health ins'rance e!changes and private ins'rers to control costs. 3ompanies that foc's on electronic health records, incl'ding
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Cerner and 4#alit" 3"stems, sho'ld also get a lot more "'siness as it "ecomes increasingly important for vario's parties to "e a"le to e!change information efficiently.