This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What the Obamacare Ruling Means for Health Care Stocks

By David Sterman

NEW YORK ( StreetAuthority) -- Cooler heads have prevailed. A showdown between the executive branch of government and the judicial branch of government looked to usher in a new era of intra-governmental rancor that our Founding Fathers sought to avoid.

But the U.S. Supreme Court's decision to let much of the Obama Administration's health care law stay intact is a victory for anyone who wants to see policy makers in Washington move forward -- not backward -- in addressing many of our nation's major's fiscal challenges.

Opinions vary widely on the merits of the far-reaching legislation, with detractors on both sides of the partisan aisle (albeit for differing reasons). Yet, many agree that health care is in need of some sort of fix. For roughly two decades, we've been spending a rising percentage of our gross domestic product (GDP) on health care (which by some estimates has reached 17%) without a commensurate increase in the quality of care we receive.

The Obama administration's goals of expanded coverage and streamlined costs through the use of best practices are laudable. The proof, as they say, will be in the pudding. Chances are, the plan will need to be tinkered with as some anticipated benefits fail to materialize.

For example, hospitals will be rewarded (or punished) as they move to meet goals of improved patient outcomes. Quickly and radically improving the delivery of hospital-based health care is more daunting than you might think.

Yet, even if the plan achieves all of its goals, a range of health-care segments will either benefit or suffer from the legislation. Back in the beginning of June, I gave my take on the health-care law itself and how the Supreme Court's possible decisions would affect various health-care sectors and stocks. Despite how you may feel about the legislation itself, you need to be aware of the winners and losers so that you can position your portfolio accordingly.


Clear winners from this landmark ruling include:
  • Hospitals that no longer need to shoulder the burden of uninsured emergency room patients who can't pay their bills when they come due. (These hospitals will also benefit from an increase in higher-margin elective surgeries as more patients get coverage.)
  • 1 of 3

    Check Out Our Best Services for Investors

    Action Alerts PLUS

    Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    Quant Ratings

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    Stocks Under $10

    David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    14-Days Free
    Only $9.95
    14-Days Free
    Dividend Stock Advisor

    David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Updates with exact steps to take - BUY, HOLD, SELL
    Trifecta Stocks

    Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

    Product Features:
    • Model Portfolio
    • Intra Day Trade alerts
    • Access to Quant Ratings
    Real Money

    More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

    Product Features:
    • Access to Jim Cramer's daily blog
    • Intraday commentary and news
    • Real-time trading forums
    Only $49.95
    14-Days Free
    14-Days Free
    AAPL $117.81 0.00%
    FB $105.45 0.00%
    GOOG $750.26 0.00%
    TSLA $231.61 0.00%
    YHOO $32.94 0.00%


    Chart of I:DJI
    DOW 17,798.49 -14.90 -0.08%
    S&P 500 2,090.11 +1.24 0.06%
    NASDAQ 5,127.5250 +11.3820 0.22%

    Free Reports

    Top Rated Stocks Top Rated Funds Top Rated ETFs