|By BERNARD CONDON, AP Business Writer|
Well, not all of them.
For many companies, overturning the law could mean less profit, not more. Certain health care insurers and hospitals could no longer expect to get payments from millions of newly insured patients.
What's more, health care experts say many big companies want to see the law upheld because they've worked hard to adapt to it, and fear legislation replacing it might prove more costly to them.
"There's no guarantee that
Opponents have focused on the so-called individual mandate. This requires virtually every U.S. resident to carry health insurance. Most of the estimated 50 million currently uninsured will be able to obtain taxpayer-subsidized coverage, either through an expansion of
Here is how some companies will win or lose under four possible rulings by the high court.
THE COURT THROWS OUT THE INDIVIDUAL MANDATE BUT KEEPS THE REST OF LAW
Hospitals could find themselves in the sick ward.
Hospitals have to foot at least some of the bill when uninsured patients show up for treatment. The law would help put an end to that by requiring most people to get coverage. Cut the requirement, and hospitals would have to continue paying out of pocket. Plus they would still have to swallow
Though it's not clear investors are anticipating this, they have been selling stock of hospital chains lately. Since the high court started considering the case in late March, they have pushed down the stock of
But investors should be careful not to overreact. If the high court rejects the individual mandate, hospitals would still be better off than if there were no law. The tax credit to help pay for insurance and the expansion of
Some insurers could get hit, too.
In a partial repeal, the law would still require insurers to offer policies to people with prior medical conditions such as diabetes and cancer. That raises the scary prospect of only costly, sick people signing up for coverage. Healthy people who would otherwise help pay for sick people's bills with their premium payments might choose to stay uninsured. After all, they could always sign up for coverage once they got ill.
This is why the Obama administration has asked the court to get rid of the coverage guarantee if the mandate is thrown out.
But, again, investors shouldn't overreact. Insurers could limit losses under this scenario by dropping out of the business of directly selling coverage to individuals and sticking with just employer-sponsored plans. Or they could decide to stay in the individual market and recoup the cost of covering their new, sick customers by raising premiums. Studies suggest premiums in the individual market could jump by 10 percent to 30 percent.
THE COURT REPEALS THE INDIVIDUAL MANDATE AND THE NEW COVERAGE RULES
Insurers would win.
They wouldn't have to worry about people signing up for coverage only after they got sick. They could just reject them. And the tax credit and
"You have the market you have today, plus you have subsidies," says
Whether investors think the high court is likely to rule this way is another matter. Since the judges began reviewing the case three months ago, they've been selling managed care stocks, pushing a dozen of them down an average 9 percent, according to
Just how much of a benefit insurers would see under this scenario is difficult to know. Many insurers do the bulk of their business with employers, with individual policies accounting for a tiny share. At Wellpoint, one of the biggest providers of individual insurance, policyholders getting such coverage make up less than 5 percent of the total.
THE COURT REPEALS THE ENTIRE LAW
Insurers focused on
Of the estimated 30 million people gaining coverage under the law, more than half are expected to benefit from the expansion of eligibility requirements for
But it's unclear how much insurance stocks would fall, if at all.
The stocks of two big insurers in this area _
For the rest of the insurance industry, not much is likely to change in a full repeal.
The law requires them to provide new benefits such as preventive care with no copayments and coverage for young adults until age 26 on a parent's plan. So it might seem that their costs would fall if the law is struck down.
But insurers are already charging higher premiums for family plans to compensate for these younger customers. And the costs aren't that steep anyway _ less than 2 percent in additional annual costs to the insurers, Coffina estimates.
What's more, insurers seem to like the new business. Earlier this month,
One winner could be drug companies. Under the law, they have agreed to pay a fee and cut the price of some medicines.
THE COURT KEEPS THE LAW
In a sense, healthcare companies, and their investors, win.
Laszewski, the consultant, says insurers and drug makers know the problems and costs of the law, and have already spent time and money complying with it, and so many don't want to it thrown out. Plus, they fear that the vacuum that a repeal would create could be filled with a more restrictive, more costly overhaul in the future.
"No one really likes this law, but what's the alternative?" Laszewski says. "It's easier to fix a law in place with obvious flaws than starting over from scratch."
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