Taxpayers Happy, Health Care Stocks not so much in Impending King vs. Burwell Decision
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The most recent Congressional Budget Office (CBO) 10-year projection cost to Obamacare estimates at $1.2 trillion. Historically, health care stocks have performed well, but the billions of federal dollars poured into the industry by Obamacare is proving to be enormously beneficial for stock prices.
Federal subsidies for health care spending is now dispensing billions directly to health insurers who are fully reaping the benefits. For example one of the largest health insurers, UnitedHealth Group Inc. saw stock prices rise to about $28 after Obamacare passed and today that price is at $120. The extraordinary 400% increase over the last five years is partially owed to the policy changes from Obamacare that increased health care spending exponentially.
Potentially this month, a ruling in favor of King in King vs. Burwell by the U.S. Supreme Court would mean a temporary end to federal subsidies. Ultimately, a King decision would cut government spending on health care by $700 billion in 10 years. This would also mean an estimated 6.5 million Americans would be forced to drop their health care coverage without federal help paying for insurance.
The scaling back of federal health care spending is good in the long run especially for taxpayers, who are often overlooked as the true financial backers to massive federal projects. Health care stocks may take a damaging blow and some 37 states may lose federal funding. However, the King decision would stop tax rates from sky rocketing to cover such exorbitant health care costs.
Written by Alison Killian
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Alison Killian is a recent graduate of Grove City College who majored in Business Management and minored in Biology Studies. She is a contributor to Medical Groups and passionate about all facets of healthcare. She plans on continuing work in the healthcare field especially in management. She is very interested in healthcare innovation and finding ways to improve the current system. She hopes to go back to school in a few years to earn a degree in medicine.
