What does Obamacare mean for the health-care industry as a whole? stocks, etc

Let me (Ryan) share an example with you that should help you understand Obamacare a little better:

Imagine you sold lemonade for $2 at a stand in your front yard.

Let’s say 100 people walk by your stand each day. And of those people, 50 choose to buy… 25 people don’t… and 25 people would be interested but could only afford a cup for $1.

Then, one day, the government passes a law that requires everyone to buy lemonade. For your 50 existing customers, they’d continue to pay you the $2 a cup they’ve always paid. In addition, though, you’d capture $2 a cup from the 25 people who didn’t want lemonade but now have to buy it. And for the 25 who couldn’t afford it, the government would pay you to offer lemonade at $1.

In other words, the government would be giving you more customers and paying you at the same time. A pretty attractive deal when you consider that your business would’ve grown its revenues 100% practically overnight. And that a simple piece of legislation would’ve made you — and your investors — a heap of cash.

Now to be fair, Obamacare doesn’t really work like this. For one thing, the government has high hopes that the program will lead to lower costs for health insurance — to carry the lemonade analogy further, the law would set limits on your ability to charge more than your actual expenses plus a reasonable profit rather than letting you keep selling at $2. Moreover, while Obamacare’s individual mandate calls for everyone to have insurance, people still have the alternative of not getting coverage and paying penalties instead.

Still, the likelihood is that many more people will buy insurance than before, and that could lead to big gains both for the companies that provide that insurance and the hospitals and other medical providers who serve newly insured patients.

All that explains why we’ve already seen numerous health-care stocks return as much as 71.0%, 124.3%, and even 130.0% since the bill passed. Not only are they likely to benefit from huge numbers of new customers; they’re also going to reap profits from government subsidies as well — and that means a never-before-seen profit opportunity for investors like you and me…

These landmark changes don’t happen often. But when they do, you need to be ready (and well informed!) if you want a piece of the profits. So stick with us and pay close attention to what Dan has to say about Obamacare’s provisions… Then later, I’ll be back to give you the inside track on Obamacare’s winning investment formula.

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