Don't Believe This Obamacare Cost Projection

Before you go, we thought you'd like these...
Before you go close icon

We all know that most forecasts are worth less than the paper they're printed on. That's probably the stance you should take with some new cost projections for Medicaid expansion under Obamacare.

Here's what you should know: The Supreme Court upheld Obamacare, but left it up to states to decide whether Medicaid should be expanded. One state, Arkansas, is unique in that it wants to use private insurance exchanges to expand Medicaid. The problem is that private insurance is much more costly than traditional Medicaid managed care programs. But conveniently, a new study from Arkansas (of all places) says that Medicaid costs will only around cost 15% more. In the following video, Fool bureau chief Brenton Flynn explains why he disagrees.

What does this mean for Wall Street? If this new Medicaid expansion strategy gains traction, investors in more mainstream insurers like WellPoint and UnitedHealth could benefit, while Medicaid managed care companies such as Centene and Molina Healthcare might lose out on some business. It's not obvious how this will shake out yet, but Flynn says investors should stay tuned.

What macro trend was Warren Buffett referring to when he said "this is the tapeworm that's eating at American competitiveness"? Here's a hint -- it's related to the video above. Find out for sure in our free report: "What's Really Eating At America's Competitiveness." You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.

The article Don't Believe This Obamacare Cost Projection originally appeared on

Brenton Flynn has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading