Experts: Obamacare Ruling Doesn’t End Business Uncertainty

Thursday, 28 Jun 2012 06:09 PM

By Dan Weil

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The Supreme Court’s decision to uphold the healthcare reform law Thursday doesn’t eliminate uncertainty for American companies, experts say.

Indeed, it could increase that uncertainty. Businesses will remain reluctant to spend their $1.2 trillion in cash on employment and expansion, Greg Valliere, chief political strategist at Potomac Research Group, tells CNBC.

Some of the uncertainty stems from the fact that Republican presidential candidate Mitt Romney promised to repeal Obamacare quickly if he’s elected.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

“Therefore, the reluctance of businesses to spend and hire will persist at least through the election," Valliere says.

Apart from the question of Obamacare’s future, there’s the issue of how its provisions will be implemented.

"The level of uncertainty about the outlook and ultimate cost to business of the healthcare reform bill remains somewhat," David Resler, chief economist at Nomura Securities, tells CNBC.

For example the Supreme Court upheld the individual mandate to buy insurance on the basis that it’s a tax. So how will the government collect the tax and how it will be reported? Resler asks.

"Most of the scheduled implementation for that has not been met, and it's not clear that the provisions under the health care law will be met as originally envisioned in the law," he says.

To be sure, hospital stocks rose after the ruling.

“For the hospitals, it means that they get payment and they get more potential customers," J.J. Kinahan, chief derivatives strategist for TD Ameritrade, tells The Associated Press.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.


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