A phone survey conducted in early May shows that 64% of
uninsured Americans are still undecided about signing up for the
Affordable Care Act (ACA). Conducted by InsuranceQuotes.com, the
survey also reveals that more than two thirds of respondents in
the low income group are unsure about whether they will be
eligible for tax credits which will subsidize the cost of
According to the phone survey of 1,001 adult Americans, almost
half of the respondents think the new system will make it tougher
for them to get tests and procedures done on time. On the whole,
the report raises serious doubts about the ultimate success of
This is because if enough citizens do not sign up for the ACA, it
could end up significantly raising the costs of health insurance.
The reason for this is that the benefit payouts to the sick
cannot be offset if enough healthy individuals do not purchase
insurance as per the program.
The situation is compounded by the 68% with low incomes who are
undecided about signing up, though they will benefit the most
from ACA. It is they who would receive the largest share of the
And this despite the fact that the purpose of "Obamacare" was to
widen the safety net, bringing more Americans under the umbrella
of health insurance. A large number of citizens would have to pay
federal penalties if they do not purchase insurance as per its
were expected to benefit significantly from health care reform.
As of now, they remain an excellent option for the investor. Most
have exceeded the performance of the S&P 500 this year. The
SPDR S&P 500
) has increased 10.50% over the last three months. On the other
Health Care Select Sector SPDR
) has gained 15.87% over the same period.
The story is much the same for quite a few other healthcare ETFs.
Vanguard Health Care ETF
) increased 15.70% over the last three months. The
iShares Dow Jones US Healthcare
) is up 15.82% over the same period.
The primary issue which may be hindering the enrollment of the
ACA seems to be the lack of education. An analyst at
InsuranceQuotes.com feels that many individuals are "confused and
uninformed." The reason for this is possibly the fact that the
new system requires much detail and is quite complicated.
This lack of information could ultimately lead to a lot of pain
for those who decide not to sign up for the ACA. Any major
illness would result in substantial out-of-pocket expenses. It
would also result in significant losses for insurance companies
providing coverage via exchanges mandated by the ACA.
There are, of course, contrarian views. A medical business
advocacy manager of the Kentucky Medical Association believes
that the complexity of the system created by "Obamacare" would
involve substantial costs and discomfort in the beginning. But,
over time, it will significantly increase the efficiency of the
medical records and billing system.
The need of the hour is greater dissemination of information
about the new system. Another major requirement is assistance for
the uneducated and uniformed that are having trouble completing
the paperwork required to be part of the system. Only then will
"Obamacare" succeed in achieving in what it has set out to
ISHARS-DJ HLTHC (IYH): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
VIPERS-HLTH CR (VHT): ETF Research Reports
SPDR-HLTH CR (XLV): ETF Research Reports
To read this article on Zacks.com click here.