Obamacare Ruling

Has anyone established an options strategy for the Supreme Court Ruling coming this month? I was thinking of UHC or  a company like that.  

Don'tcha think that big U.S. corporations always planned to pass through any cost from Obamacare.  Since the major provisions of Obamacare don't go into effect for over a year, I don't see a near term play from its repeal.

I believe it is a lot more complicated than that. There is at least 4 different ways the court can rule. Take a look:

http://www.bloomberg.com/news/2012-06-18/health-care-ruling-cloaked-in-court-secrecy-spurs-guessing-game.html 

I decided to buy a straddle on XLV. I believe the ruling will go against the interests of the insurance companies with regard to pre-existing conditions and will find the mandate unconstitutional. There is no way that can be priced into their existing policy costs. The final result will be that insurance will cost a lot more for the average consumer and that should create a short term sell off.    

Does anyone know when this will be released by court?. I see talk of Thursday, now and also at the 'end of the month'. Maybe releasing 'parts' of decision on more than one day as well. I am sure this is political maneuvering as usual..

After searching, I also see they have delayed(?) the "Montana/Citizens United/11th Amendment' case indefinitely.. That's a shocker..

ISRG, if they strike the tax on medical devices.

How Would an Overturning of ObamaCare Affect U.S. Equities? And What If the Law is Upheld by the Court?

Taking the latter issue first, public polling shows consistent opposition to ObamaCare, by large pluralities (e.g., 55%-39% for complete repeal, per recent Rasmussen data).  Beyond the policy issues and changes themselves, investors have similarly come to believe over time that ObamaCare represents an open-bounded expansion of the welfare state – or said more prosaically, the government’ footprint in the economy – that can only be inimical to economic growth, regardless of shifts in clinical outcomes.  In other words, the very divergent estimates of the law’s impact on total healthcare spending, from the Obama Administration and CBO’s initial estimates touting $20-100 billion in annual savings, to (say) the former Bush 43 economist Douglas Holtz-Eakin’s estimate that the new law added $562 billion to the deficit in its first ten years (an assertion buttressed by the CBO’s revised March 2012 budget projections through 2021 that indicate more than $1 trillion in new gross healthcare costs, while still leaving up to 27 million non-elderly Americans uninsured a decade hence), have in any case been interpreted by the investor class in favor of those who fear fiscal harm and budget-busting from the new law.

Bluntly, we agree with this interpretation, and past history does as well.  The canonical example of a well-intentioned government program gone fiscally awry is of course the Social Security Act of 1965 (viz., Medicare/Medicaid).  In 1967, the House Ways and Means Committee projected the legislative cost of the new Medicare entitlement program would be $12 billion in 1990, 25 years into the law’s existence. Instead, it was $98 billion that year – a program that grew exponentially with baby boom retirement to $489 billion in 2011.  In short, “the market’s” guess on ObamaCare’s economic impact, while empirically indiscernible, is certainly negative, and a drag on U.S. equity prices in general because the law is seen as increasing both the federal budget deficit as well as onerous costs on American businesses and individuals wading through the 2,400 page law and its tens of thousands of new pages’ maze of new administrative law rulings pursuant to the law’s implementation and forced compliance (the impact of the law on health care-related stocks is surely more idiosyncratic; more regulation and federal strictures in the sector is surely offset by larger total volumes of likely spending, and increased subsidization of more patients through the system).

As such, the Court’s overturning of the entirety of the law would lift equity prices in the U.S. – permanently, albeit marginally, due to lack of a coherent program offered in opposition to ObamaCare by either Beltway Republicans or the author of RomneyCare himself.

http://www.alhambrapartners.com/2012/06/24/thinking-things-over-this-weeks-historic-obamacare-ruling-and-what-it-means/ 

incubus said: Devil/details, 

There is no actual mandate. 

On the mandate, interesting note that no one seems to have picked up on, there is NO enforcement for the mandate, the bill specifically states fines, but also states that no levies, liens or legal actions can be taken to collect those fines.

This is a BIG problem for the healthcare sector, cost cuts with no actual mandate to begin with.

I personally oppose the mandate on it's merit, it's unconstitutional to mandate private commerce, which brings us full circle to the public option.

A large number of independents who are opposed to Obamacare are unhappy with the fact it doesn't include a public option....yet the spin has only been to mention a large number of independents are "opposed to Obamacare", period.

 Yeah and the IRS has no obligation (I think it's actually not suppose to inform the police) to inform law enforcement of how a tax payer obtained their income as long as they paid their taxes (the old saying, "The IRS don't care what you do as long as you give them their cut of your proceeds"). I, however, would bet most drug dealers aren't paying their taxes on the simple chance the IRS MIGHT tell law enforcement that they got their income through the sale of illegal drugs.

I can personally say I don't like nor want any major medical insurance program provided by the government. Social Security and Medicare are two great examples of how you can "project" for the future using today's standards. If only I had been back in the 70's "projecting" the need of computers by the year 2000, I could have bet millions (which would be around 10x that in today's money) of investors money against computers ever taking hold... I would have gone entirely broke betting on those confounded machines that nobody has any use for except the nerd kids who like science fiction. Flash forward 40 years and oh look...can't open your eyes in anyplace with humans without seeing something with a microprocessor in it. It's hard enough to guess the immediate future with much precision. However, the further out you go, the more the future creates diverging paths, all of which are possible and only time can tell which will happen.

Guessing the needs of the long term future is like guessing what I'm going to be eating for breakfast 30 years down the road. It's stupid and pointless because you're most likely going to be wrong.

All we can do is use past information to guess how the future will go. Past information says the government has a hard enough time running simple things like transportation infrastructure (TSA...worst idea ever) and education (no child left behind...I mean most American children left behind). Why do you want them taking on addition responsibilities creating new departments which only create more waste.

Tree,
I support 100% what you are saying. Eventually the conservative movement will win out simply because the federal government is extremely inefficient and they siphon too much money from the economy. How does it make sense for us to send money to the feds only to have them return it to the states with some sort of strings attached. Collection of taxes should be completely opposite in nature with regards to entitlements which means it should be taxed at the state level. Social security might have been a great idea when it was first created but the mere fact that the system is not flexible and can't support a burgeoning population is why it is doomed to fail.

When looking at insurance the same can be said whether it is Medicare for seniors and others needing care they can't afford. There will never be an answer fostered by the liberals in this country which will have a lasting impact on controlling costs, never has and never will. You must look to the private sector to work in conjunction with the government - not have the speaker of the house say we have to pass the bill to find out what is in it.  

 

Yeah I saw that after I turned on CNN. Ugh another 3 days of waiting. At least it sets up for a solid Thursday-Friday rally. Who is thinks they'll throw out the mandate and the entire thing will come crumbling down? I will say this market could sure use it as companies might unresistrict some of there hedging money to open up some jobs.

The problem with S.S. is that it was meant for families who lost it's primary income earner because at the time when it was created, women for the most part didn't work. In today's society it's used as a retirement account instead. It'd be like making your child a college fund then when he or she doesn't need it, using it to go on vacation instead of leaving it so that it maybe passed on to your children's children.

That is what American's do, if it's not immediately needed, it's repurposed. This is a horrible idea and the money should be instead properly invested for the future. Which is why I don't get Obama because he's constantly saying how we need to invest in our children, blah blah blah, but he insists upon expanding the budgets of social security and medicare.

The cities can do what the state of AZ did, sell all of their buildings (including the capital)and the rent them back, LOL