War Room Obamacare 1 y Anniversary 04 Sept
War Room Obamacare 1 y Anniversary 04 Sept 2014
Hidden. Levers War Room Macro Coaching CE Credit Archived webinars Idea Generation Presentation deck Open Q + A Scenario Updates Product Updates
Future of USD I. Market Update II. Obamacare Scenarios III. Obamacare Year in Review IV. Healthcare Macro Outlook
Hidden. Levers MARKET UPDATE
Market Update Russia/Ukraine ISIS Rising / Oil Falling sources: Hidden. Levers, NPR, ABC, FXEmpire, WSJ, Reuters Europe Stalling Everything Bubble
Macro Snapshot Most pullbacks at 4%, None over 8% From 1987 -2000, only 2 corrections - don’t hold your breath. US is leaving Europe in the dust, and it may be Europe that is holding commodities and rates back.
Hidden. Levers OBAMACARE – SCENARIOS
Costs Contained via ACA Health Care Inflation = under 2% Lower cost growth boosts other sectors -> + GDP Growth Insurance access and lower costs reduces home foreclosures Healthcare IT spending keeps rising sharply Inflation stays low since a key driver is in check source: Hidden. Levers, CBO
BAD: Costs Contained Despite ACA Health Care Inflation = 2% Both GOP and Dems will keep ACA cost cuts ACA insurance expansion could fail if GOP unwinds it Markets not impacted if costs held in check Mild GDP impact if health care policy in disarray source: Hidden. Levers
UGLY: Runaway Costs Health Care Inflation = around 4% double digit rise in insurance premiums Medicare solvent until 2030 insurance pools are old + sick people Medical bills and bankruptcy drive correction Healthcare costs reduce S+P earnings sources: Hidden. Levers, Forbes,
Scenario: Obamacare Good Costs Contained via ACA Neutral/Bad Costs Contained Despite ACA Ugly Runaway Costs If the ACA achieves its goals, healthcare inflation will decline, boosting growth in other sectors. If healthcare costs remain low despite other failings in the ACA, markets will be relatively unimpacted. Runaway healthcare costs would hit both corporate and govt. budgets, leading to a drop in GDP growth and harder times for healthcare consumers.
$ Hidden. Levers OBAMACARE YEAR IN REVIEW
ACA – Review of Medicare Changes Difference between original + current Medicare cost projections $716 b over 10 years Benefits Changes Elimination of drug “donut hole”, expanded preventative services and long term care. Insurance Cuts Medicare Advantage subsidies reduced sources: New York Times, Kaiser Family Foundation Provider Cuts Independent Payment Advisory Board (IPAB) on stand-by; various cuts to health services. High-Earner Tax Changes 1. 45% ->2. 35% payroll tax 3. 85% capital gains tax
ACA Year 1 – Success + Failure SUCCESS FAIL • 8 M enrolled, exceeds 2014 targets • Healthcare. gov rollout • 18% -> 13. 4%: drop in US uninsured rate • Canceled policies + premium shock • Medicare cuts sticking • Endless mandate waivers • Supreme Court upholds ACA key tenets • Incomplete Medicaid rollout – 28/50 states sources: US HHS, Gallup, Washington Post, NY Times, The Hill, Health Affairs, Healthcare. gov, The Advisory Board
ACA Year 2 – What’s Coming? 2013 30%+ price swings in premiums Convincing 8 M to reenroll and get 5 M new enrollees Three month enrollment period instead of six Medicaid expansion into many red states sources: Kaiser Family Foundation, New York Times, NCPA 2014
Hidden. Levers HEALTHCARE MACRO OUTLOOK
ACA – Job Market Impact Congressional Budget Office ACA = 2 million to quit jobs or cut hours PROPONENTS: ACA = WAGE GROWTH SKEPTICS: ACA = WAGE DECLINE Falling health care costs for employers would be passed on to employees Increasing labor costs would reduce takehome pay ACA reduces labor supply, wages must rise. Real wages would need to be cut to keep existing company insurance plans. Low wage workers have no incentive to climb up – they’ll lose ACA benefits source: Wall Street Journal, Economics Policy Institute, Washington Post, PBS
Macro Comparison – Healthcare Trends US healthcare spending exceeds all other advanced economies, at roughly 16% of GDP But long-term projections show sharp rises for all advanced economies – a global challenge sources: Century Foundation + OECD, United Nations
Macro Comparison – Healthcare Trends USA Global OVER 65 10% WORLD OBESITY sources: Hidden. Levers, Deloitte, CDC, OECD, Pew Research Center OVER 65 27% JAPAN OVER 65 20% EUROPE
Obamacare 1 y Anniversary – Recap key lever = Healthcare Inflation healthcare inflation lower than expected in USA net job impact unclear globally, ageing is driving costs
Hidden. Levers Use Cases scenario Obamacare scenario Global Deflation data center Health Care Inflation data center Health Care Spending macro theme Rising Healthcare Costs Obamacare
Product Update MS Excel style portfolio entry type ahead in portfolio entry easy button for cash + FI auto conversion from % to $ coming soon landscape redesign
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