UnitedHealth Group Inc. (UNH), WellPoint, Inc. (WLP), eHealth, Inc. (EHTH): Obamacare’s October Start Date Looms Large

Max: It looks like eHealth, Inc. (NASDAQ:EHTH) is clearly a company that has benefited from the ACA. Before we close, Dan, let’s shift our focus to a story that took the spotlight this week. We saw some surprising news from giants International Business Machines Corp. (NYSE:IBM) and Time Warner Inc (NYSE:TWX). Can you explain what happened with their retiree health-insurance benefits?

Dan: Both companies announced that they would stop providing direct health-insurance coverage through their own employer-sponsored health plans to retirees who are eligible for Medicare. Instead, they will provide money for those retirees to use to obtain their own insurance through private insurance exchanges. Both International Business Machines Corp. (NYSE:IBM) and Time Warner Inc (NYSE:TWX) emphasized the potential cost savings and greater choice of policy options for retirees, although some retirees believe that putting the onus on them to choose their own insurance is an undue burden that they shouldn’t have to bear.

Max: There are pros and cons here for the retirees being affected by these new plans, but how should investors look at this move?

Dan: Because IBM, Time Warner, and most of the other companies are still spending money on retirees’ health insurance, the immediate impact on their stocks should be minimal. In the long run, though, the move should help the companies manage their own health-related costs more effectively and avoid some of the uncertainty in future expenses that could reduce long-term earnings.

Max: Thanks, Dan.

The article Obamacare’s October Start Date Looms Large originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. Max Macaluso, Ph.D. has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group and WellPoint and owns shares of IBM and WellPoint. 

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