The United States Supreme Court will be ruling shortly on The Patient Protection and Affordable Care Act (PPACA). The high court is expected to conclude its session at the end of the month, and court officials say that decisions will come down only when justices actually convene. The next meeting of the nine justices is scheduled for Monday, June 19th. Another possible date is Thursday, June 22nd. The latest the court can rule is June 25th, the final day it would convene.
It is on those dates that the court could do one of three things: 1) strike down the entire law, 2) strike down the mandate portion of the law, or 3) leave it alone.
If either of the first two things happen, Wall Street fully expects the stocks of hospitals and insurers will be hit the hardest. If the court ultimately decide that mandating U.S. citizens buy insurance is unconstitutional. Insurer stocks will feel acute pain if the court does that, but doesn’t take the extra step and strike down the requirement that they offer coverage to all.
But just about every facet of health care faces some uncertainty if any part of the law officially known as the PPACA is overturned. For example, striking down just the mandate would increase costs for insurers.
So how important is the mandate?
“It’s very important to the goals of making the private health-insurance market more viable and expanding coverage,” said Paul Ginsburg, president of the Center for Studying Health System Change, a nonpartisan research group in Washington.
Without the individual mandate, “you still will get a coverage expansion, a substantial one. It just won’t be as large as it would’ve been” with the requirement to purchase insurance.
According to Marketwatch.com, the overturning of the individual mandate would especially hurt the health insurers because it would deprive those companies of 30 million new customers. If the mandate is struck and the remaining part of the law is left intact, that could become a cost burden to those companies and Congress would be expected to act.
The striking down of the mandate could hurt the prices of hospital stocks such as HCA Holdings Inc. (HCA), Tenet Healthcare Corp. (THC) and Health Management Associates Inc. (HMA).
If the Medicaid expansion position of the law is struck, that would impact the hospital stocks since many hospitals are dependent on Medicaid income to survive. hospitals that are heavily reliant on Medicaid such as Community Health Systems Inc. (CYH) and Vanguard Health Systems Inc. (VHS) will feel the pain.
The answer to these questions are right around the corner. Wall Street has its fingers crossed and is hoping that the law remain intact.
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John is the author of an award-winning book, the 2010 Winner of the USA National Best Book award for African-American studies, published by The Elevator Group Mr. and Mrs. Grassroots: How Barack Obama, Two Bookstore Owners, and 300 Volunteers did it. Also available an eBook on Amazon. John is also a member of the Society of Midland Authors and is a book reviewer of political books for the New York Journal of Books