Republicans have finally produced a detailed plan to repeal and replace the Affordable Care Act, also known as Obamacare.
Setting aside politics and viewing the plan neutrally, two things jump out. First, the House Republicans’ plan keeps the basic framework of Obamacare. No wonder some are calling it “Obamacare Lite.” Second, the cost is unknown, and therefore it’s difficult to know how it will be paid for. Also unknown: the number of people affected.
Other details: The individual mandate to buy insurance would be replaced with penalties that insurance companies can impose; subsidies would be replaced with refundable tax credits; taxes that supported Obamacare would be repealed; more responsibility would be given to the states; and the mandate to offer insurance irrespective of pre-existing conditions would remain.
The Republican plan also changes the landscape for investors, who could profit handsomely without undue risk by identifying opportunities in stage one of the five stages of change. Please click here to see five stages of a trade based on change.
Many stocks and exchange traded funds (ETFs) mentioned below are likely to enter stage one especially if the broader equity market enters a correction. Before I describe the specific opportunities and perils of Obamacare Lite, it’s important for investors to gain perspective by looking at a long-term chart I created.
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