Obamacare and the effect of it’s implementation on health care stocks
It is estimated that in 2014, as many as 30 million new people will be able to purchase private insurance on the federal or state regulated exchanges. With a current population of about 317 million people living in the US, this represents a nearly 10% increase relative to the current population. While cost savings will surely be wrung out of the system, we expect that a significant portion of this additional 10% will show up as additional earnings and profits by many of the companies represented by the health care industry, including hospitals, large pharmaceutical, and biotech companies. And while the sickest segment of the population will continue to be heavily burdened with high medical costs, it is advisable especially for this segment to overweight their portfolios with health care stocks over the next 2 years so that the costs incurred can be at least partially offset by gains made by the health care companies.