Health Insurance

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10 Obamacare Insights from Money Morning Readers Living Overseas

By , Associate Editor, Money Morning • @TaraKateClarke -

With the Oct. 1 deadline for open enrollment in Obamacare just days away, the pro- and anti-Obamacare chatter has elevated to a roar.

Just two days ago, the Obama administration released data addressing the cost of premiums in the 36 states that have opted to launch new healthcare exchanges.

On one hand, Obamacare proponents are proud that the data shows that most individuals will be able to pay around $100 per month for a policy, and some even less, depending on qualification for tax subsidies.

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Don't Expect the Obamacare Ruling to Calm the Markets

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

Even before the Supreme Court decision on Obamacare was handed down yesterday the markets were selling off hard.

They were tanking on news that the latest European summit was unlikely to be a game-changer, that U.S. gross domestic product was a paltry 1.9% in the first quarter, and a New York Times story that JPMorgan Chase's derivatives loss could top $9 billion.

Then came the long-awaited decision from the country's highest court on the divisive healthcare law, the Patient Protection and Affordable Care Act, which unhinged markets further.

The Court's historic decision shook the markets for several reasons.

But the single overriding effect of the mixed-bag decision will be its impact on markets going forward.

That's because the divided decision further fuels partisan politics going into the November elections and sets the stage for an all-or-nothing battle between Republicans and Democrats.

The chances of there being any compromise anywhere on any divisive issues before the elections is now mathematically zero, where before it was somewhere between slim and none.

The Bigger Issues Behind the Obamacare Ruling

What the markets now face aren't just healthcare, tax and spending issues.

As a result of the Court's stunning decision, we face something much bigger -- Constitutional issues of the highest and deepest order.

The High Court, with Chief Justice John Roberts unexpectedly siding with the Court's four liberal justices, rendered a 5-4 victory for President Barack Obama's prized legislation.

The ruling upholds the "individual mandate" that requires citizens to either pay for "minimum essential" health insurance or pay a "penalty" through the IRS as a "tax" towards offsetting the shared costs of national healthcare.

But the Court also struck down the Act's provision allowing the Federal Government to effectively "hold a gun to the head" of states if they failed to increase Medicaid benefits, largely expanded under the new law.

In its original form, states could lose all Federal funding of Medicaid for non-compliance with Federal demands.

By its decision the Court effectively admitted that the Commerce Clause argument underpinning the individual mandate's Constitutionality was null and void.

But while they said that the individual mandate that "forced" citizens to buy health insurance wasn't intended as a "command" that fell under the Commerce Clause, they incongruously flipped the argument on its head and agreed (by a one-vote majority) that the mandate was legal under Congress' authority to "tax" citizens for the benefit of the nation.

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Congressional Spat Over Doctor's Medicare Pay Threatens Obama's Healthcare Reform Effort

By , Contributing Writer, Money Morning -

A Congressional stalemate over how to stave off a hefty pay cut to doctors treating Medicare patients threatens to undermine President Barack Obama's healthcare reform effort - even as the administration mails out a glossy brochure to reassure seniors the healthcare program is on solid ground. For the third time this year, Democrats and Republicans […]

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Question of the Week: Do the Pitfalls Outweigh the Promise For the New Healthcare Reform Program?

By , Money Morning -

When U.S. President Barack Obama signed the new healthcare-reform bill into law yesterday (Tuesday), it ended months of political bickering and maneuvering, and began a new chapter in the nation's healthcare saga - one in which the country will feel the effects of this sweeping, costly and controversial policy overhaul.

The fact is that many Americans will have healthcare for the first time ever. Offsetting that bright spot, however, is the reality that the program could add trillions in debt to the country's already burgeoning national debt, further complicating the matter.

Going forward, it will now be left to the pundits, analysts and the healthcare industry to decipher what these provisions really mean for the industry, for individuals, for taxpayers - and even for investors.

But here at Money Morning, we wanted to know what you think about this new law. That's why we made healthcare reform the inaugural topic in our new "Question of the Week" feature.

Money Morning Question of the Week: U.S. President Barack Obama's controversial healthcare proposal is now law. What do you think? How do you feel? Do you think it's a beneficial or harmful move for you as a consumer, as an investor, and as a taxpayer? What do you think it means for our nation's economy?

What follows is a sampling of the enthusiastic and passionate responses that we received. Make sure to also check out next week's "Question of the Week," a query that seeks your thoughts on the growing levels of U.S. debt.

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Healthcare Reform Losers: Companies Providing Retiree Benefits Face Multi-Million Dollar Tax Costs

By , Associate Editor, Money Morning -

After sending letters of protest to Congress in the months prior to the healthcare law's approval, U.S. companies are now facing multi-million dollar after-tax hits this year due to a tax provision in the new legislation, labeling them healthcare reform losers instead of winners.

Part of the new healthcare law places a federal income tax on government subsidies given to companies that provide retirees and their spouses with drug benefit plans. The 28% subsidy was created as Medicare Part D, adding a prescription plan for senior citizens to the Medicare Act of 2003. To encourage companies to continue offering retirees a drug plan, the tax-free subsidy reduced companies' costs. Fewer senior citizens then went through Medicare's prescription program - which would have cost taxpayers much more than the subsidy price.

Caterpillar Inc (NYSE: CAT) and Deere & Company (NSYE: DE) are just two of the businesses that fought the new stipulations. The manufacturers estimate the tax will cost them $100 million and $150 million this year, respectively. Other companies who will pay handsomely include AK Steel Corp. (NYSE: AKS) with $31 million in charges, and Honeywell International Inc. (NYSE: HON) with an estimated fee of $42 million.

Consulting firm Towers Watson & Co. (NYSE: TW) estimates these taxes could cost companies about $233 per person receiving drug benefits - a hefty price tag when a company gives benefits to 40,000 retirees, like Caterpillar.

Overall, more than 3,500 companies offer drug benefits to 6.3 million retirees. Although the tax won't be effective until 2011, accounting practices force companies to recognize the fees in the period in which the law is signed. That means the tax could nab $14 billion from corporate profits in a year when companies were hoping to recover from huge losses during the recession.

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We Want to Hear From You: What Do You Think About the New Healthcare Law?

By , Money Morning -

After months of controversy, political bickering and maneuvering, and intense media speculation and scrutiny, this week became a historically significant moment in the annals of U.S. healthcare when U.S. President Barack Obama signed the new healthcare bill into law. Thus begins a new chapter in the healthcare saga, when the country will feel the effects […]

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Drug Companies and Hospitals Get a Boost from Healthcare Reform

By , Associate Editor, Money Morning -

After months of trying to predict how the healthcare reform proposals would affect the respective futures of their industries, drug companies and hospitals are optimistic about the prospective long-term profits the final version of the health care reform bill could bring them.

President Barack Obama yesterday (Tuesday) signed the $940 billion health care reform bill with support from pharmaceutical companies and the hospital industry. Both will benefit from a sharp increase in the number of insured customers, as the bill expands healthcare to up to 32 million more people.

While the bill will cost tens of billions of dollars over the next 10 years, the planned reforms create something drug companies and hospitals can't live without: paying consumers.

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Shaky CBO Deficit Projections Help Healthcare Reform Bill Pass House

By , Contributing Writer, Money Morning -

When the comprehensive healthcare reform bill won approval from the House on Sunday, some of the swing lawmakers were won over by a new Congressional Budget Office (CBO) analysis showing the bill will slash the deficit by over $1.3 trillion over the next 20 years.

But at a time when the U.S. budget is already saddled with hefty doses of red ink, there's a growing debate about whether the new bill will reduce the deficit or evolve into another entitlement program that will expand the country's debt beyond already record levels.

Even though the bill - which President Barack Obama has hailed as the "most significant effort to reduce the deficit since the Balanced Budget Act" of the 1990s - will cost the federal government $940 billion over a ten-year period, the CBO said it will increase revenue and cut other costs by an even greater amount.

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Obama's Targets Insurers with $950 Billion Health Care Reform Plan

By , Associate Editor, Money Morning -

Health insurance providers are protesting this week as the government comes a step closer to strengthening its industry regulation by calling for new "common sense" practices.

This latest development in U.S. President Barack Obama's push for health care reform occurred Monday when the White House released a sprawling $950 billion proposal in anticipation of tomorrow's (Thursday's) scheduled summit.

Obama's plan, which combines the respective reform bills of the Senate and the House of Representatives, suggests drastic changes are coming for insurance providers.

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