Obamacare 1y Anniversary 04 Sept 2014

1. War Room Obamacare 1y Anniversary 04 Sept 2014

2. HiddenLevers War Room CE Credit Macro Coaching Idea Generation Archived webinars Open Q + A Presentation deck Product Updates Scenario Updates

3. Future of USD • Market Update • Obamacare Scenarios • Obamacare Year in Review • Healthcare Macro Outlook

4. HiddenLevers Market update

5. Market Update Europe Stalling Russia/Ukraine Everything Bubble ISIS Rising / Oil Falling sources: HiddenLevers, NPR, ABC, FXEmpire, WSJ, Reuters

6. Macro Snapshot Most pullbacks at 4%, None over 8% From 1987-2000, only 2 corrections - don’t hold your breath. US is leaving Europe in the dust, and it may be Europe that is holding commodities and rates back.

7. HiddenLevers Obamacare – Scenarios

8. Costs Contained via ACA Health Care Inflation = under 2% Lower cost growth boosts other sectors -> + GDP Growth Insurance access and lower costs reduces home foreclosures Healthcare IT spending keeps rising sharply Inflation stays low since a key driver is in check source: HiddenLevers, CBO

9. BAD: Costs Contained Despite ACA Health Care Inflation = 2% Both GOP and Dems will keep ACA cost cuts ACA insurance expansion could fail if GOP unwinds it Markets not impacted if costs held in check Mild GDP impact if health care policy in disarray source: HiddenLevers

10. UGLY: Runaway Costs Health Care Inflation = around 4% double digit rise in insurance premiums Medicare solvent until 2030 insurance pools are old + sick people Medical bills and bankruptcy drive correction Healthcare costs reduce S+P earnings sources: HiddenLevers, Forbes,

11. Scenario: Obamacare • Good • Costs Contained via ACA • Neutral/Bad • Costs Contained Despite ACA • Ugly • Runaway Costs If the ACA achieves its goals, healthcare inflation will decline, boosting growth in other sectors. If healthcare costs remain low despite other failings in the ACA, markets will be relatively un-impacted. Runaway healthcare costs would hit both corporate and govt. budgets, leading to a drop in GDP growth and harder times for healthcare consumers.

12. $ HiddenLevers Obamacare year in review

13. ACA – Review of Medicare Changes Difference between original + current Medicare cost projections $716b over 10 years Benefits Changes Elimination of drug “donut hole”, expanded preventative services and long term care. High-Earner Tax Changes 1.45% ->2.35% payroll tax 3.85% capital gains tax Insurance Cuts Medicare Advantage subsidies reduced Provider Cuts Independent Payment Advisory Board (IPAB) on stand-by; various cuts to health services. sources: New York Times, Kaiser Family Foundation

14. ACA Year 1 – Success + Failure SUCCESS FAIL • Healthcare.gov rollout • Canceled policies + premium shock • Endless mandate waivers • Incomplete Medicaid rollout – 28/50 states • 8M enrolled, exceeds 2014 targets • 18% -> 13.4%: drop in US uninsured rate • Medicare cuts sticking • Supreme Court upholds ACA key tenets sources: US HHS, Gallup, Washington Post, NY Times, The Hill, Health Affairs, Healthcare.gov, The Advisory Board

15. ACA Year 2 – What’s Coming? 30%+ price swings in premiums 2013 Convincing 8 M to re-enroll and get 5 M new enrollees Three month enrollment period instead of six 2014 Medicaid expansion into many red states sources: Kaiser Family Foundation, New York Times, NCPA

16. HiddenLevers Healthcare macro outlook

17. ACA – Job Market Impact Congressional Budget Office ACA = 2 million to quit jobs or cut hours source: Wall Street Journal, Economics Policy Institute, Washington Post, PBS

18. Macro Comparison – Healthcare Trends US healthcare spending exceeds all other advanced economies, at roughly 16% of GDP But long-term projections show sharp rises for all advanced economies – a global challenge sources: Century Foundation + OECD, United Nations

19. Macro Comparison – Healthcare Trends USA Global OVER 65 20% EUROPE OVER 6510% WORLD OVER 6527% JAPAN OBESITY sources: HiddenLevers, Deloitte, CDC, OECD, Pew Research Center

20. Obamacare 1y Anniversary – Recap key lever = Healthcare Inflation healthcare inflation lower than expected in USA globally, ageing is driving costs net job impact unclear

21. HiddenLevers Use Cases Obamacare scenario Obamacare scenario Global Deflation data centerHealth Care Inflation data center Health Care Spending macro themeRising Healthcare Costs

22. Product Update MS Excel style portfolio entry type ahead in portfolio entry easy button for cash + FI auto conversion from % to $ coming soonlandscape redesign