Updated at 2:40 p.m. on June 28.
Hospitals were the businesses with the most to lose from a negative Supreme Court opinion on the 2010 health law. Sure, insurers would have lost millions of potential customers. But if the act were struck down, they would have also been freed from restrictions on their profits, leading Wall Street analysts to predict mixed results for them in the event that the law failed.
For hospitals, on the other hand, such an outcome would have represented almost pure pain. While the act puts pressure on future Medicare payments, and the court gave states the choice to opt out of Medicaid expansion, analysts still anticipate substantial new revenue streams for hospitals via Medicaid and through the private market.
A decision to strike down the act would have maintained hospitals’ responsibility of caring for the uninsured while removing the means for patients to gain coverage, resulting in a severe financial pinch, analysts said. So stocks of for-profit hospital companies soared on Wall Street today even as the overall market fell.
HCA Holdings, for example, which owns more than 100 hospitals, was up 10 percent in early afternoon trading. Competitors Tenet Healthcare and Community Health Systems were also surging.
Most health insurance stocks, on the other hand, fell. UnitedHealth Group, which offers a variety of health services in addition to insurance, was down less than 1 percent. WellPoint was down 5 percent.
The Supreme Court ruling would have “minimal earnings impact” on insurers, Bernstein Research analyst Ana Gupte wrote in a note to clients this morning. Because the court ruled that penalties for not buying coverage are a tax, she said, the “mandate” to buy insurance might be more enforceable — and hence beneficial for insurers.
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As expected after the Supreme Court ruling, the Republican spin machine is at full throttle. Despite CBO projections to the contrary, the GOP is predicting death panels and the end of the world as we know it. Chicken Little has nothing on the Republican Party. Meanwhile, back here on earth, hospitals are seeing the positive results that CBO projected. Many more positives will be rolling out over the next months and years and CBO, as usual, will be the source of truth we all should have listened to from the very beginning.
Very insightful in this video
http://www.youtube.com/watch?v=GGfqQs1poPg
I also believe that hospitals had the most to lose if the ACA did not stand. Hospitals are losing the most, esp. when patients are sick and use their local ER for primary care. Hospitals will treat patients if assessment warrants and collecting pay for treatment is a far and distant hope. At least now, the uninsured can qualify for some type of coverage. I can just hope (fingers crossed) that my insurance premium does not increase.
The cost of health insurance will rise dramatically for a number of reasons.
New fees on health insurance companies when fully implemented will cost the insurance industry $14.8 billion per year and will inevitably be passed on to the consumer. Similar taxes apply to drug and device manufacturers. Name brand drug companies will pay, on average a $2.8 billion yearly assessment and medical device manufacturers will pay a 2.3% tax. All these taxes/fees will be passed onto the consumer in the form of higher premiums, increased deductibles, reduced benefits, more limited choices and higher drug and medical equipment costs. The 40% tax on “Cadillac” health plans begins in 2018.
In addition to the new fees the Affordable Care Act will add an estimated 30+ million new enrollees to the healthcare system with a projected 60% receiving subsidies. Insurers will be required to accept all applicants regardless of pre-existing conditions at rates not significantly higher than for healthy people.
To compensate for adverse selection insurance premiums will, by necessity, have to rise.
Where do we get the doctors and other medical providers to take care of the influx of newly insured?
Medical costs are rising and will continue to increase. Due to new technologies and treatments life expectancy has been lengthened and along with it the need for additional healthcare services.