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When SCOTUS Decides the Fate of the ACA, Who Stands to Gain?

June 27, 2012

As the Supreme Court’s ruling on President Obama’s Affordable Care Act (ACA) approaches, the one certainty is that the decision will impact the national healthcare system, particularly health insurers.

The new Bloomberg Healthcare Finance Brief examines the potential impact of the court’s ruling on healthcare providers, pharmaceutical companies and insurers. Here are some things to keep in mind if you invest in the healthcare sector.

Almost $1.03 trillion in new revenue over the next eight years is at stake for health insurers if the Court upholds all of the ACA’s provisions, a Bloomberg Government survey has found. Investors should keep a close eye on the nation’s largest publicly traded health insurers, which stand to gain as much as $160 billion in revenue if the law is upheld.  UnitedHealth Group, for example, will see the largest impact from the Court’s decision and could retain an estimated $11.2 billion in revenue.

The “individual mandate,” requires most Americans buy health insurance in 2014, or pay a tax penalty. This individual mandate also offers a clear upside to United Health and Aetna. Each could gain access to 20.7 and 15.9 million uninsured U.S. citizens respectively. Aetna, Wellpoint and Coventry Health have the largest opportunity to gain insurance exchange members, while Molina Health and AMERIGROUP have the largest opportunity to gain Medicaid expansion members.

Still, the experts contributing to the Healthcare Finance Brief, including analysts from Bloomberg Industries, anticipate largest gains will be somewhat offset in the short-term by changes imposed by health reform legislation. As it stands, the ACA’s provisions also reduce government reimbursement for hospitals before the uninsured would begin to be covered in 2014.

This week, we’ll be watching closely for the Court’s momentous decision on the national healthcare system.

Elizabeth Kruthoholow is the editor of Bloomberg’s Healthcare Finance Brief, a new weekly newsletter that publishes insights and analysis on the healthcare sector.