By Mary-Lynn Cesar for Kapitall
On Thursday morning, the Supreme Court voted in a 6-3 ruling to uphold tax subsidies in the Affordable Care Act that allowed millions of Americans to buy health insurance. Opponents of the healthcare law had argued that a four-word phrase in the 20,000-page bill -"established by the state"-meant that Obamacare subsidies shouldn't exist in the 34 states where the federal government operates insurance marketplaces, or exchanges, since the states decided to not set up their own.
"Not so fast," cried the Supreme Court. Chief Justice John Roberts, writing for the majority opinion in King v. Burwell , stated, "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them." Roberts went on to add that Obamacare subsidies play an integral role in the success of federal exchanges and are necessary to "avoid the type of calamitous result that Congress plainly meant to avoid."
"Not so fast," cried Justice Antonin Scalia, who dissented alongside Justices Clarence Thomas and Samuel Alito, as he shared his disapproval from the bench. Scalia argued that it was hard to see why "established by the state" would be present in the law if the subsidies didn't strictly apply to state exchanges. And in a sick burn that only the funniest Supreme Court Justice could give, he said, "We really should start calling the law SCOTUScare."
But at the end of day, as President Obama declared in his victory press conference shortly after the ruling, Obamacare is " here to stay "-which could actually be a good thing for the healthcare industry. Reutersreports that health service providers and insurers as well as hospital operators were rallying after the decision. As of 1:00PM EST, the iShares Dow Jones US Healthcare ETF ( IYH ) was up 0.58 percent Thursday.
And as The New York Timesnoted back in October, the insurance industry has actually benefited immensely from the law due to greater demand for private insurance. Paul Heckley, managing director at the Navigant Center for Healthcare Research and Policy Analysis, told the Times , "The irony is if you look sector by sector, the A.C.A. has resulted in pretty substantial earnings across the board."
With that in mind, here is a list of health care providers that have experienced greater growth in earnings per share ( EPS ) and revenue than the industry average over the last five years , which is how long it's been since Obamacare was signed into law. Do you think these companies can attribute any of their growth in earnings and sales to Obamacare subsidies? Take a look at the links to their earnings and financials to get a better picture, and let us know what you think in the comments.
Click on the interactive chart to view data over time.
EPS growth over the past five years at 10.61% vs. an industry average of 8.12%.
Sales growth over the past five years at 13.60% vs. an industry average of 12.26%.
EPS growth over the past five years at 18.12% vs. an industry average of 8.12%.
Sales growth over the past five years at 32.19% vs. an industry average of 12.26%.
3. Molina Healthcare Inc. ( MOH , Earnings , Analysts , Financials ): Provides Medicaid-related solutions to meet the health care needs of low-income families and individuals, as well as assists state agencies in their administration of the Medicaid program. Market cap at $3.92B, most recent closing price at $71.53.
EPS growth over the past five years at 10.38% vs. an industry average of 8.12%.
Sales growth over the past five years at 21.38% vs. an industry average of 12.26%.
4. WellCare Health Plans Inc. ( WCG , Earnings , Analysts , Financials ): Provides managed care services for government-sponsored healthcare programs in the United States. Market cap at $3.91B, most recent closing price at $89.14.
EPS growth over the past five years at 8.67% vs. an industry average of 8.12%.
Sales growth over the past five years at 13.51% vs. an industry average of 12.26%.
(List compiled by Mary-Lynn Cesar. EPS and sales data sourced from Fidelity. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)
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