Surrounded by Obamacare

Surrounded by Obamacare

You're surrounded -- whether you realize it or not.

While the highly visible health insurance exchanges start up on Oct. 1, you are already surrounded by Obamacare in more ways than you might think. In ways both subtle and not-so-subtle, the effects of the Affordable Care Act permeate American life.

It's everywhere (nearly)
Does someone in your family use a CPAP machine to help him or her breathe more easily while asleep? If the machine was bought this year, chances are the cost was just a little higher than in the past. A new 2.3% medical device tax went into effect on Jan. 1. Manufacturers either had to absorb this added cost or pass it along to customers through higher prices.

Do you take a prescription medication? Pharmaceutical companies must pay between $2.8 billion and $4.1 billion annually in new excise fees under Obamacare. Take a wild guess how they manage to pay Uncle Sam and still make their shareholders happy?

It's possible, of course, that you have a great health insurance plan at work that pays most of the bill for those medications. The likelihood that you're totally shielded from the pain to your wallet isn't very good, though. Insurers are also paying higher taxes as a result of Obamacare, which they're perfectly happy to pass along to your employer and you.

The impact of Obamacare could already be helping improve your long-term health in some ways, though. If you have cut back on use of tanning beds because of the higher costs, it could reduce your chances of developing melanoma. And you can thank the good old Affordable Care Act, which imposed a steep 10% tax on the tanning-bed industry.

Do you give a second thought to ordering a bacon cheeseburger after seeing the calories listed on the menu at that fast-food restaurant and instead opt for the grilled-chicken salad? Obamacare pops up yet again. The legislation requires chain restaurants to include calorie counts on their menus.

Pragmatic perspective
Look around and you'll find plenty of other ways you're already affected by health reform. Obamacare affects flexible spending accounts, small employers, large employers, hospital reimbursement, the font size of health insurance explanations of benefits, and how many previews are shown when you see a movie at the theater. (OK -- I made up the last one, but you get the point.)

Obamacare already is a pervasive part of Americans' everyday way of life. You can love it, hate it, or be indifferent about it, but that's a reality. And its presence is about to grow with the health insurance exchanges starting up.

Americans are by nature pragmatic profiteers. When something becomes increasingly present, some profit by going along with the flow. See enough traffic on a given road and it won't be long before there's a gas station erected. Others profit by combating a growing presence. The History Channel reality show Chasing Tail comes to mind, with hunters helping wealthy suburban residents control an increasing deer population.

Let's say that seeing Obamacare everywhere brings a smile to your face. There are plenty of investing options that can make that smile even bigger if health reform works well -- the "go with the flow" approach.

One of the most obvious places your money might grow with this scenario is in hospital stocks. HCA Holdings looks like a good pick. It's the nation's largest hospital operator with 162 hospitals and 113 freestanding surgical centers. Even though shares have climbed 35% year-to-date and have more than doubled in the past couple of years, HCA doesn't appear to be overpriced.

Another possibility is CVS Caremark . As the second-biggest pharmacy chain in the U.S., CVS would stand to benefit if millions of Americans with newly obtained health insurance begin using prescription drugs that they couldn't afford previously. CVS looks relatively attractively priced right now to boot.

What if your response to being surrounded is to fight back? Fair enough. You can hope for Obamacare's utter failure and invest accordingly. Short-selling stocks like HCA is one possibility. You could also buy shares of a company that would benefit if one of the least-liked parts of Obamacare was rolled back: the medical device tax.

For example, shares of Boston Scientific have nearly doubled so far in 2013 despite the added tax. With expansion into electrophysiology and several new products on the way, Boston Scientific could get an even bigger boost from the market if the medical device tax was somehow repealed.

There are middle-of-the-road alternatives, also. Neither success or failure for Obamacare would likely affect Celgene very much, for instance. Obamacare's new prescription drug tax exempted orphan drugs. Most of the biotech's revenue stems from drugs that meet this criteria. As a result, Celgene's growth prospects aren't tied to increasing numbers of insured Americans.

Obamacare surrounds you. You can cheer or complain. Why not cash in as well?

More Obamacare ideas
Obamacare is rewriting the rules for the health care industry, and in the process of doing so, it's creating massive opportunities for investors. How? By investing in a handful of specific health care stocks. In this free report, our analysts walk you through these opportunities and the companies that are positioned to exploit them. The informational edge contained in it is invaluable, but can only be exploited profitably while the rest of the market remains in the dark. To access this free report instantly, simply click here now.

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Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Celgene. 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.

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