The Affordable Care Act, commonly known as Obamacare, was passed into law in the year 2010. It attempts to provide all U.S. citizens with affordable health insurance and ultimately to reform the nation’s healthcare system and reduce healthcare spending. (See related 5 Things You Need To Know About Obamacare and Obamacare: Can it Be Repealed?)

With a national law impacting an entire population of around 322 million, businesses within the high-cost healthcare sector are set to gain or lose from the proposed changes. Whether Obamacare will be a bane or a boon depends upon how a particular business is impacted by the law. This article focuses on the top industries and businesses which will likely benefit from Obamacare.

  1. Health Insurance Providers: Obamacare brings more Americans under health insurance plans. It is already translating to increasing number of customers for the health insurance firms like Aetna (AET) and UnitedHealth Group (UNH). According to TIME magazine,14.4 percent of the U.S. population was uninsured in 2013. By mid-2014 (post Obamacare), this number was down to 11.3 percent uninsured. Insurance companies may face some challenges. Under Obamacare, they cannot deny or reject an insurance claim, or decline insurance to certain individuals, which earlier they could do at their own discretion. However, the larger customer base will ensure that such costs are absorbed and accommodated through increased insurance premiums from the elite group. After all, insurance is a business based on probability and statistics, and insurance firms are adept in handling these to maximize profitability. (Related Top 10 Insurance Companies By The Metrics)
  2. Hospital Operators: Hospital operators will be the instant beneficiaries of Obamacare. Prior to Obamacare, hospitals had to provide some level of care (however basic) to all, even the uninsured. However, they were not guaranteed any payment by the uninsured. With insurance now mandatory for almost all citizens, hospitals will have more paying patients. Businesses like HCA Holdings (HCA) and LifePoint Hospitals will be direct beneficiaries. An increased portion of newly insured population will be more proactive in going for earlier medical treatment in the hospitals, which they may have previously avoided for fear of costly bills. This will further increase the business potential for hospital operators.
  3. Medical Software and Data Companies: The Affordable Care Act also mandates stricter guidelines for hospitals, doctors, pharmacists, and associated functionaries to maintain accurate records with low cost operations. This will open up new business opportunities for companies like Cerner Corp (CERN) and McKesson Corp (MCK) operating in the medical software, medical record keeping, medical content management, and hospital management. (See related Top Medical & Healthcare Software Companies)
  4. Medical Device Manufacturers and Service Providers: A larger population will now have access to medical procedures and services. There will also be an increased level of scrutiny to ensure adherence to set norms. Medical device manufacturers and service providers (like those for ambulances or pathology) are expected to see increased business. They may initially be put through stricter checks, but those qualifying under Federal standards will be the ultimate beneficiaries in medium-to-long run.
  5. Pharmaceutical Companies: Obamacare aims to lower the cost of healthcare through measures which include reduction in prices of common prescription drugs. It also offers government subsidies on necessary hospitalization and drugs. The pharmaceutical companies will eventually benefit due to increased demand from a much larger consumer base, a significant portion of which was avoiding treatments due to their uninsured status.
  6. Medical Research and Automation: A good number of businesses and institutes operate in medical research and analysis. They attempt to discover improved healthcare techniques, efficient medial processes, and improved accuracy of drugs for treating ailments. Such companies can expect to benefit in terms of getting more grants, tax incentives, or increased sponsorship from the government for their medical research projects. Obamacare’s ultimate aim is to reform the healthcare system in the United States, and anything that helps will be generously supported by the government.
  7. Medical Education: Obamacare implementation may open doors for having more number of qualified doctors, nurses, pathologists, pharmacists, lab technicians, and trained support staff in associated functions. The medical education field can expect increased interest from a larger set of aspirants who will now be better assured of well-paid jobs post graduation. The government may also allow increased seats in various medical colleges. It may also open doors to international candidates to study and eventually practice in the United States by increasing visa caps. All these developments will be beneficial to the medical education sector.

The Bottom Line

Obamacare, or the Affordable Care Act, is an attempt to reform the tangled healthcare system in the United States. It takes time to implement changes and get tangible results when working on such a large scale. The initial results are already visible in terms of increasing the insured population. Though the medical industry fears increased government presence, many healthcare sectors will see and undeniable boost in business in the long run. (See related The Main Flaw With Obamacare)

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