obamacare 1y anniversary war room slides
Post on 29-Jul-2015
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HiddenLevers War Room
Open Q + A
Macro Coaching
Archived webinars
CE Credit
Idea Generation
Presentation deck
Product UpdatesScenario Updates
I. Market Update
II. Obamacare Scenarios
III. Obamacare Year in Review
IV. Healthcare Macro Outlook
Future of USD
Market UpdateRussia/Ukraine Europe Stalling
ISIS Rising / Oil Falling
sources: HiddenLevers, NPR, ABC, FXEmpire, WSJ, Reuters
Everything Bubble
Macro Snapshot
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.
Most pullbacks at 4%,None over 8%
Costs Contained via ACA
Lower cost growth boosts
other sectors ->+ GDP Growth
Insurance access and lower costs reduces home foreclosures
Inflation stays low since a key
driver is in check
Health Care Inflation = under 2%
source: HiddenLevers, CBO
Healthcare IT spending keeps rising sharply
BAD: Costs Contained Despite ACA
source: HiddenLevers
Health Care Inflation = 2%
Markets not impacted if costs
held in check
ACA insurance expansion could
fail if GOP unwinds it
Both GOP and Dems will keep ACA cost cuts
Mild GDP impact if health
care policy in disarray
UGLY: Runaway Costs
Medicare solvent until
2030
Medical bills and bankruptcy drive correction
Healthcare costs reduce
S+P earnings
double digit rise in insurance premiums
sources: HiddenLevers, Forbes,
Health Care Inflation = around 4%
insurance pools are old + sick
people
Scenario: ObamacareGood
Costs Contained via ACA
Neutral/BadCosts Contained
Despite ACA
UglyRunaway 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 un-impacted.
Runaway healthcare costs would hit both corporate and govt. budgets, leading to a drop in GDP growth and harder times for healthcare consumers.
ACA – Review of Medicare Changes
sources: New York Times, Kaiser Family Foundation
Provider CutsIndependent Payment Advisory Board (IPAB) on stand-by; various cuts to health services.
Insurance CutsMedicare Advantage subsidies reduced
Benefits ChangesElimination of drug “donut hole”, expanded preventative services and long term care.
Difference between original + current Medicare cost projections
$716b over 10 years
High-Earner Tax Changes
1.45% ->2.35% payroll tax
3.85% capital gains tax
ACA Year 1 – Success + Failure
SUCCESS FAIL
• 8M enrolled, exceeds 2014 targets
• 18% -> 13.4%: drop in US uninsured rate
• Medicare cuts sticking
• Supreme Court upholds ACA key tenets
sources: US HHS, Gallup, Washington Post, NY Times, The Hill, Health Affairs, Healthcare.gov, The Advisory Board
• Healthcare.gov rollout
• Canceled policies + premium shock
• Endless mandate waivers
• Incomplete Medicaid rollout – 28/50 states
ACA Year 2 – What’s Coming?
sources: Kaiser Family Foundation, New York Times, NCPA
Three month enrollment period instead of six
30%+ price swings in premiums
Convincing 8 M to re-enroll and get 5 M new enrollees
2013
Medicaid expansion into many red states
2014
ACA – Job Market Impact
source: Wall Street Journal, Economics Policy Institute, Washington Post, PBS
PROPONENTS: ACA = WAGE GROWTH SKEPTICS: ACA = WAGE DECLINEFalling health care costs for employers would be passed on to employees
Increasing labor costs would reduce take-home 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
Congressional Budget Office
ACA = 2 million to quit jobs or cut hours
Macro Comparison – Healthcare Trends
sources: Century Foundation + OECD, United Nations
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
Macro Comparison – Healthcare Trends
sources: HiddenLevers, Deloitte, CDC, OECD, Pew Research Center
USA Global
OVER 6510%
WORLD
OVER 6527%
JAPAN
OVER 65 20%
EUROPE
OBESITY
Obamacare 1y Anniversary – Recap
net job impact unclear globally, ageing is driving costs
healthcare inflation lower than expected in USA
key lever = Healthcare Inflation
HiddenLevers Use Cases
data centerHealth Care
Inflation
scenarioGlobal
Deflation
Obamacare
macro themeRising
Healthcare Costs
data centerHealth Care
Spending
scenarioObamacare
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