<p>What has happened to the health care industry in unprecedented. There is no other business in America in which every American is mandated by law to buy its product.</p>
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<p>Good, I fix it for you. </p>
<p>Everyone is mandated to eat lunch at a $10 buffet. There are many buffet chains in town and they already serve 1000 people profitably. </p>
<p>The people who dont eat there now who will be compelled to, are a group of 70 anorexics and competitive eaters. The competitive eaters dive right in. The anorexics decide to pay the 65 cent penalty instead of eating. </p>
<p>Are the restaurants receiving a windfall because of the lunch mandate?</p>
<p>No, but if that happens the plan fails. Or gets revised somehow so it will succeed.</p>
<p>Oh, and you are also offering many diners big rebates to pay for their lunch. Granted, the anorexics will still be a tough sell.</p>
<p>Argbargy, do you think health insurance execs are stupid? Do you think they dont know where the healthy uninsured people live?
Do you really think just the unhealthy ate going to sign up?
I will say this. If only the unhealthy sign up, ACA is going to have to be radically changed.
I think the insurance companies are going to make it work. Didnt you read the NYTimes article about Blue Cross? Aca is good business if it works.</p>
<p>It won’t really matter to healthcare execs if healthy people don’t sign up, because if that happens, they can raise their premiums on everyone else, and the government will increase its subsidy, so everyone can afford it.</p>
<p>Bay is right- when things dont work, more money needs to be pumped in by the tax payer. </p>
<p>Young, healthy people really arent going to sign up because they dont really need the service. Thats why they are a “profit” to the system. Young people have plenty of things to spend their money on, like bars, pot, cars student loans, and they are unlikely to cut back on those to shell out a couple hundo a month. </p>
<p>Who is going to do that to avoid a $95 fine? Its not even clear what happens if you dont pay the fine. Or if you dont file at all. Or if you dont tick the box that says you didnt have insurance. Or if you claim you are exempt because you are Amish. </p>
<p>The IRS doesnt do anything except garnish your withholding. So right off the bat the have a limited ability to collect anything because you may arrange your withholdings to have no refund. </p>
<p>Obamacare is written such that someone cant be criminally prosecuted or criminally penalized for not buying insurance so there is little enforcement like there is with normal taxes.</p>
<p>[If</a> You Don?t Buy Insurance, Will You Really Pay the Tax? ? The American Magazine](<a href=“http://www.american.com/archive/2012/july/if-you-dont-buy-insurance-will-you-really-pay-the-tax]If”>http://www.american.com/archive/2012/july/if-you-dont-buy-insurance-will-you-really-pay-the-tax)</p>
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I’d just note that it is NOT a $95 penalty. It is a $95 minimum tax penalty -$95 in year one OR 1% of income, whichever is MORE. A person with a $20K AGI will see a penalty of $200. $30K income – penalty= $300. The penalty can be collected from any tax refund that is due. People in those income ranges are also eligible for substantial subsidies. It is not until the individual taxpayer’s AGI hits about $46K ($460 penalty) that the subsidy eligibility fades away. Of course in year #2 the penalty increases.</p>
<p>If you calculated your withholding properly, you won’t be getting a refund. The IRS will have trouble collecting from those people.</p>
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<p>Vanguard Health Care Index Fund is an index that “includes stocks of companies involved in providing medical or health care products, services, technology, or equipment.” The largest holdings in the fund are Johnson & Johnson, Pfizer, Merck, Gilead Sciences, Amgen, Bristol-Myers Squibb, UnitedHealth Group, Abbvie, Celgene, and Biogen Idec–most of which are providers of pharmaceuticals or other medical/health care products, not health insurers. Consequently, the performance of this broad fund tells us little or nothing about the profits of health insurers. It shouldn’t be too surprising that the ACA would drive up stock values in the health care sector broadly defined, insofar as more people will be insured and in a position to avail themselves of medical care, i.e., to buy the products and services these companies provide. </p>
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<p>Same problem. This fund “seeks to track the performance of a benchmark index that measures the investment return of stocks in the health care sector.” Its largest holdings are Johnson & Johnson, Pfizer, Merck, Gilead Sciences . . . etc. (same list, mostly not health insurers). </p>
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<p>But also includes Express Scripts (on-line pharmacy), HCA Holdings (hospitals and surgical centers), Davita Healthcare Partners (dialysis centers and physician groups), Laboratory Corporation of America Holdings (medical labs), Quest Diagnostics (diagnostic testing services), Universal Health Services (hospital management), Mednax (medical group providing maternal-fetal, neonatal, and pediatric services), and on and on. In short, the fund includes at least as much on the health care provider side as on the health insurer side, which again means you can’t take the performance of this fund as a proxy for the performance (or profits) of health insurers.</p>
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<p>Right, but that’s one company. Its performance could just reflect a successful company grabbing off a larger market share relative to its competitors. You’d need to show that health insurers in the aggregate had similar results in order to make any meaningful statement. And even then, the growth in share price could reflect not excess profits, but investor expectations for growth in the health insurance industry–a bigger pie, if you will–as the ACA takes hold and more people are covered by health insurance.</p>
<p>So far you’ve demonstrated approximately zero.</p>
<p>Given the investors in this product, you are kind of right and kind of not right. </p>
<p>But it’s immaterial. The way the law is written, insurance companies will be just fine. </p>
<p>As for the device tax, yes the companies will be fine dstark, but they will offshore the jobs. I live in an area that will be effected. I don’t think this tax is worth losing even more manufacturing jobs </p>
<p>Until I moved here, I too thought it was no big deal of a tax. But it will cost jobs and the kind of jobs we need more of, not less. It won’t hurt the executive class. It will hurt the working class.</p>
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<p>I agree hospitals can benefit from ACA. If it’s any indication Vanguard Health Systems Fund behaved about the same as iShares Health Providers etf. The former includes hospitals, Pharmaceuticals, in the latter almost 40% of the fund is in insurance companies.
Thimbs up for Modern Family. I like the show. There’s something authemtic about it.</p>
<p>bclintonk - Be my guest. If you can come up with a fund exclusively for insurance, we can look up how they performed. I made a hypothesis and spot-checked to see if it holds up. What I said about United Health Systems also applies to iShares Health Providers etf with a minor modification, 48% vs. 13% instead of 44% vs 13%.</p>
<p>So what do you think the effect of UNH’s stock buy back has been?</p>
<p>I assume you are asking argbargy? I have no idea but iShraes etf IHF performed similary. Did all the companies in IHF have stock buy backs? And no one in S&P did buy backs? Was stock buy backs dominated by health insurance companies in the last 6-7 years?</p>
<p>PG - I agree about middle class jobs. They’ve gone overseas and people are fighting for Walmart jobs. We should fight for better jobs rather than complain about the low minimum wage. Shouldn’t there be more jobs paying well above minimum wage?</p>
<p>Wellpoint had an even larger one.
[WellPoint</a> boosts buyback plan by $5 billion - MarketWatch](<a href=“http://www.marketwatch.com/story/wellpoint-boosts-buyback-plan-by-5-billion-2011-10-01]WellPoint”>WellPoint boosts buyback plan by $5 billion - MarketWatch)</p>
<p>Here is their chart:
[WellPoint</a>, Inc. Common Stock Stock Chart | WLP Interactive Chart - Yahoo! Finance](<a href=“WLP Interactive Stock Chart | 1768673 Stock - Yahoo Finance”>WLP Interactive Stock Chart | 1768673 Stock - Yahoo Finance)</p>
<p>They were trading high 70’s to 80 before the recession. Now they are high '80s. </p>
<p>Interesting point of comparison- UNH (and Aetna) are largely siting out the Health Care Exchanges. Wellpoint is in with both feet. </p>
<p>Is ACA a factor in stock performance? I make Wellpoint as up about 37% from the time ACA was signed. Wellpoint is in, United is ignoring. Both are up about the same amount. </p>
<p>Conclusion- adding 2 million people to a pool of hundreds of millions is negligible.</p>
<p>poetgrl, can you explain why the device manufacturers will offshore jobs because of a tax that can be passed onto buyers of their products?</p>
<p>I really don’t understand that logic --so I really am wondering if you can provide some insight. I live in an area with really high sales taxes, both state and local- but that doesn’t cause retailers to leave, because the taxes are just added to the price of good sold. Other taxes - like real property taxes, or gross receipts taxes, might cause them to relocate-- but not taxes on the specific items sold. I mean, let’s say someone makes device that costs $1000. The 2.3% sales tax means that the hospital pays $1023 to buy the device instead of $1000. The hospital probably already is marking up the cost of the devices on their bills – they do with everything else-- but the point is, if anyone eats the cost of the extra $23 it’s the hospital, which in the end is going to be stuck with whatever the insurance company is willing to pay for the device. </p>
<p>The $23 isn’t enough to make a competitive difference – that is, no one is going to go shopping for an equivalent device made in China because they want to save the $23. Now maybe the Chinese are manufacturing the same device for $600 instead of a $1000, and that’s a competitive advantage - but that’s got nothing to do with the tax. </p>
<p>Anyway… enlighten me please. You said you didn’t understand before you move to the area with the jobs, so I am guessing you have learned something that I don’t know.</p>
<p>[Medical-device</a> companies say new excise tax will hurt industry - The Denver Post](<a href=“Medical-device companies say new excise tax will hurt industry – The Denver Post”>Medical-device companies say new excise tax will hurt industry – The Denver Post)</p>
<p><a href=“http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/14/this-is-why-the-medical-device-tax-is-in-so-much-trouble/[/url]”>http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/14/this-is-why-the-medical-device-tax-is-in-so-much-trouble/</a></p>
<p>What I know is anecdotal, and so cannot be put in a post as verifiable.</p>
<p>But, as those who have discussed financial issues with me in the past know, I frequently have some information before it is readily available in the press. </p>
<p>I can say that this tax is going to impact the working class, long term. And I can’t imagine this is what is wanted. Most of these are newer right to work jobs, and they are well paid, but not protected by the unions, therefore, no protection in the oligarchy. Why the tax on device makers and not big pharma? Just look at the word “big.” That’s your answer. Every time.</p>
<p>from the denver post article:</p>
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<p>Here’s the key to understanding this tax, Calmom. It is a tax on sales, not a tax on profit. Think about that. You actually can’t pass that along.</p>
<p>?? – Seems to me that I pay sales tax every time I buy just about anything. It’s almost ALWAYS passed on, usually itemized within the invoice for the goods.</p>
<p>Here’s the full text of the law (I’m posting the full text because it’s pretty short):
<a href=“http://www.law.cornell.edu/uscode/text/26/4191[/url]”>http://www.law.cornell.edu/uscode/text/26/4191</a></p>
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<p>Note that the tax applies to importers as well as manufacturers, and there is a specific procedure to apply for exemptions. </p>
<p>It is clearly worded as a “sales” tax and not as “excise” tax as claimed in the articles you linked to.</p>
<p>I am not a big fan of taxing revenues because you could end up taxing companies that arent profitable. </p>
<p>I find it amusing that in one of the links a medical device
maker is complaining that people signing up for ACA are going to be healthy so there isnt going to be an increase in revenues for the device maker. Then we have a poster or two that says only the sick are going to sign up for ACA (which will be good for device makers). </p>
<p>I think the answer is somewhere in the middle. There is going to be more revenue for the medical device maker industry with ACA. The idea was the increase in revenue would cover the tax, but some companies are going to do worse with the tax. </p>
<p>If there are businesses or communities that are going to be heavily hit by the tax, I can see why they are against the tax.</p>
<p>Why cant you pass on taxes on sales?</p>
<p>Question - These are expensive machines not little devices meaning the people that need them need expensive tests. My last MRI was $$$$$. The policies have huge deductibles. And most of the people buying this insurance are buying it because they could never afford or chose not to spend the money on insurance (although they somehow have smart phones)…So who is paying the bills for their health care? Not insurance, care? Just curious.</p>