The Healthcare Nightmare

Takeaway: Romney's against the ACA and will repeal it if elected while Obama believes this is for the greater good of our nation. Voters will decide.

President Obama successfully got his Affordable Care Act through Congress much to the chagrin of Republicans. Now it’s time to examine what that means for Medicare spending going forward. Hedgeye Healthcare Sector Head Tom Tobin discussed entitlement reform, spending and each candidate’s opinion on ACA during today’s client call discussing the 2012 presidential election.


It should come as no surprise that Mitt Romney is heavily against the Affordable Care Act, calling it a “$2 trillion entitlement we don’t want and certainly can’t afford.” He has noted that should he become president, he’ll repeal the act.



The Healthcare Nightmare - TOBIN uninsured



Looking at the above chart, you can see that uninsured Americans are generally younger and aren’t big consumers of medical services. Medical services consumption increases with age, with those over 55 making up the lion’s share of expenditures. The CBO currently estimates that 11 million people will be added to Medicare and 19 million to private insurers due to the ACA. The act increases total medical spending by between +3.1%* to +6.7%.


Someone has to pay for this and you can easily see why Romney is against having taxpayers foot the bill. Obama believes that the ACA is for the greater good. Votes are likely to choose a candidate based on their current medical and financial situation. It’s one more factor that gives us reason to believe the election is too close to call.



The Healthcare Nightmare - TOBIN election

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