But before we get onto deliberate on the impact, let’s ponder over some more concerns.
There isn’t a clear mandate for allocation of budget for Medicaid, amidst beyond belief figures of federal spending in percentages ranging from 60 to 70% in the year 2014. And after subtracting the incoming receipts from Medicaid we get a 45% net of all the federal payouts, this however is debatable.
Who wins and who loses? Is the dominant issue, quite obviously the beneficiaries goanna be health care and insurance players the most prominent being HCA holdings (HCA NYSE).
As Obamacare rewrites the rules for the health care sector, ‘HCA holdings’ is the one stock to watch. As a health care provider HCA can’t turn down treatment to anyone after Obamacare. HCA has to provision quite a bit for doubtful accounts it had to write off 10.25% of its 2012 revenues. Come 2013 watch out for its year end numbers.
From a valuation viewpoint it’s just 10 times its forward earnings even after its recent run-up, from every angle it makes sense to me over a long run as Obamacare adapts.
However as the full implementation of Obamacare happens HCA holdings needn’t anymore worry about write offs. Owing to this Motley Fool is aggressively hyping HCA holdings. After reviewing HCA I must tell you even if the stock has already appreciated 100% it’s a buy for me.
Well here’s another winner (an insurer and a Motley Fool Darling) in the making eHealth (NASDAQ: EHTH) unlike other new entrants that are going to pop into existence on the event, eHealth is around for quite some time it has a decade’s existence behind.
eHealth is tech savvy and it appeals to the youngsters. eHealth has answers to the technical glitches that may pop up just in case, it is already in business and operates a clearing house style exchange since 1999. A platform very similar to what federal and state governments want to launch.
eHealth invested heck of an effort lobbying for access to the market and they succeeded in inking a deal with the fed to sell policies. It has had a nice run up at NASDAQ in the last couple of months.
Well it’s a buy for me even after the recent upsurge in its stock price. Ironically eHealth stands to benefit if there are glitches in the fed owned market.
And now the last Cerner (NASDAQ CERN) a likely beneficiary, banking on its ability to offer solutions for hospitals to go Digital hence improving efficiency. This stock has also seen a sharp run-up in its price this month.
The rationale behind this pick is the health care providers that have older information systems in place, must adhere to the new accounting and disclosure norms laid out by Obamacare by January 2016. Yet another technical capability deadline to seek for.
Well, Cerner has the answer an 18+ billion IT company that made a profit of $400 million last year with a consistent growth in operating profits for the last ten years in a row. Cerner is doing its job. It’s a buy again watch out.
If you have any of your own do let us know by posting a few lines in the comment box below.
Disclosure: I don’t have any positions in any stocks mentioned herein, and no plans to initiate any in the near future as well.