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Sunday, September 15, 2013

The Los Angeles Times Notes The Reality of ObamaCare And Has A New Name For It

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

The Los Angeles Times is reporting:
The doctor can't see you now.
Consumers may hear that a lot more often after getting health insurance under President Obama's Affordable Care Act.
To hold down premiums, major insurers in California have sharply limited the number of doctors and hospitals available to patients in the state's new health insurance market opening Oct. 1.
New data reveal the extent of those cuts in California, a crucial test bed for the federal healthcare law.
These diminished medical networks are fueling growing concerns that many patients will still struggle to get care despite the nation's biggest healthcare expansion in half a century.
Consumers could see long wait times, a scarcity of specialists and loss of a longtime doctor.
"These narrow networks won't work because they cut off access for patients," said Dr. Richard Baker, executive director of the Urban Health Institute at Charles Drew University of Medicine and Science in Los Angeles. "We don't want this to become a roadblock."
Some think the LA Times is as liberal as The New Yorks and/or as supportive of the president. 

Notice how they call this the "Obama Affordable Care Act." This is not the full name of the act, and folks have criticized others for calling this "ObamaCare."

Be that as it may.

For agile investors, this is an opportunity of a lifetime -- one just needs to know where to go "short" with "ObamaCare" and where to go "long" with "ObamaCare."

Insurers have raised their premiums and are now limiting their services in anticipation of ObamaCare. They are preparing for the worse case scenario. Think of personal property insurers preparing for a new hurricane season.

Now, most of ObamaCare is delayed or exempt; the only major piece remaining is the "personal mandate." Some are betting that the "personal mandate" will be delayed a year. Maybe, maybe not. Agile traders are watching the tea leaves closely.

If the "personal mandate" is delayed, agile traders will be ready to pounce. Once insurers have raised their premiums, it is unlikely they will quickly bring them down. They may bring them down under pressure from state government regulators and free market competition (the latter, unlikely) but it will take time. Meanwhile, quarter by quarter, profits will drop directly to the bottom line.

Think of those same personal property insurers along the Gulf Coast who raised rates in anticipation of a horrendous hurricane season only to be blessed with no losses because there were no significant hurricanes. The insurers will bring down their premiums slowly, if at all. 

I've posted my philosophy on this before. In the emotional/political arena, I don't care for ObamaCare as it has been fashioned and I will continue to post comments showing my bias.

On the other hand, as an investor, it is another story. I am convinced that folks like Warren Buffett are looking at ObamaCare from an investor's point of view, and dispassionately from the political point of view. It is what it is.

But the gap will widen between the "haves" and the "have-nots" under ObamaCare and some folks on the margins will see their tax rates spike if their "health insurance benefit" carries them into the next tax bracket. 

[I compliment The Los Angeles Times for leaving off part of the official name of this act, "The Patient Protection" portion because it is now clear that Americans will not be guaranteed to keep their current physicians as previously promised. That part of "patient protection" is out the window.]

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