Obamacare: While everyone else is losing money, it’s up to investors to make money from it.
As of now, according to CNNMoney, the penalties uninsured people will need to pay are:
$95 per adult or 1% of family income in 2014
$325 per adult or 2% of family income in 2015
$695 per adult or 2.5% of family income in 2016
Uninsured individuals will have to pay whichever figure is higher.
For example, next year, an adult must pay $95 and $47.50 per child, with a limit of $285 per family. However, if the family income is more than the $95 plus $47.50 per child, that will be the penalty. The penalties increase each year afterwards.
By 2016, the federal government could see as much as $7 billion from these penalties, as an estimated 6 million people are punished for not having health insurance.
Of course, not everyone will be penalized. Undocumented immigrants, Native Americans, and people who don’t make enough money to file a yearly tax return will not have to worry about the penalties. Some uninsured individuals will be able to file exemptions for hardships.
How it will Affect Businesses
Individuals aren’t the only ones facing penalties – businesses are too. Employers will see penalties of as much as $2,000 per worker for not offering health coverage to their employees starting in 2015. This is going to create a difficult financial situation for any small business finding it hard enough to come up with the money to offer health insurance to employees now.
So the penalties could force businesses to cut hours. Employees who work less than 30 hours do not need to have health coverage. Legalized immigrants are also exempt from the Obamacare guidelines for employers, so they will be a more favorable option compared to U.S. citizens or green card holders.
As you’re reading this, you are probably wondering how Obamacare even came into being in the first place if it’s penalizing individuals and employers who don’t have money to pay for it. One of the main benefits of Obamacare is supposed to be the cuts to out-of-pocket costs for medical care, but of course, this too has been delayed to 2015.
When this does go into effect, it’s likely some insurance companies will raise their premiums to cover the cost burdern. There are some restrictions through the Obamacare law to prevent insurance companies from increasing costs too much, but it’s unknown how high the premiums can rise.
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Obamacare Investment Opportunities
As you’re figuring out how you’ll deal with Obamacare, you should also consider how you can make money from.
You can benefit through three sectors:
Biosimilars are generic type drugs that are most similar to brand-named ones. Amgen (NASDAQ: AMGN), Novartis (NYSE: NVS), and Merck (NYSE: MRK) are looking for ways to develop biosimilars to compete with the generics that will soon be preferred due to their lower price.
While these are all good companies to invest in, if you want to get the most return from the increase in biosimilars production, look towards Momenta Pharmaceuticals (NASDAQ: MNTA). It’s partnering up with Baxter (NYSE: BAX) to boost production.
Obamacare has restricted the price of many drugs, but not those that many people don’t use – orphan drugs. These are for patients with rare diseases, and due to how limited they are, drug makers can charge an exuberant amount of money.
Some may go for as much as $200,000 or more a year. Drug companies to keep in mind are BioMarin Pharmaceuticals (NASDAQ: BMRN) and Alexion Pharmaceuticals (NASDAQ: ALXN).
The last investment opportunity that comes out of Obamacare is banks. Health savings accounts (HSA) are deposits individuals can make before taxes that can be used to pay for medical expenses in the future.
HSAs have grown 18% between 2011 and 2012, and they’re expected to continue to grow even more as Obamacare arrives. People want savings to pay co-pays and other out-of-pocket costs when their health insurance won’t. Banks will benefit from the increase in deposits, which means shareholders will too. One of the banks you should consider is Wells Fargo (NYSE: WFC).
In this time of uncertainty with Obamacare, all you can do is try to reap some of the benefits. The first part of Obamacare is set to become official as of October 1, 2013, so you still have some time. Just don’t miss out on this investment opportunity, or you won’t see how beneficial Obamacare can be to investors.
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