Markets
Breakdown: How Americans Get Healthcare Coverage
With Obamacare firmly in the crosshairs of Republican lawmakers, the debate around U.S. healthcare is at a fever pitch.
While there is no shortage of opinions on the best route forward, the timeliness of the debate also gives us an interesting chance to dive into some of the numbers around healthcare – namely how people even get coverage in the first place.
How Americans Get Healthcare
The following infographic shows a breakdown of how Americans get healthcare coverage, based on information from Census Bureau’s surveys.
Put together by Axios, it shows the proportion of Americans getting coverage from employers, Medicaid, Medicare, non-group policies, and other public sources. The graphic also includes the 9% of the population that is uninsured, as well.
The following definitions for each category above come from the Kaiser Family Foundation, a non-profit that uses the Census Bureau’s data to put together comprehensive estimates on healthcare in the country:
Employer-Based: Includes those covered by employer-sponsored coverage either through their own job or as a dependent in the same household.
Medicaid: Includes those covered by Medicaid, the Children’s Health Insurance Program (CHIP), and those who have both Medicaid and another type of coverage, such as dual eligibles who are also covered by Medicare.
Medicare: Includes those covered by Medicare, Medicare Advantage, and those who have Medicare and another type of non-Medicaid coverage where Medicare is the primary payer. Excludes those with Medicare Part A coverage only and those covered by Medicare and Medicaid (dual eligibles).
Other Public: Includes those covered under the military or Veterans Administration.
Non-Group: Includes individuals and families that purchased or are covered as a dependent by non-group insurance.
Uninsured: Includes those without health insurance and those who have coverage under the Indian Health Service only.
Healthcare Mix by State
Here’s another look at how Americans get healthcare coverage on a state-by-state basis.
This time the graphic comes from Overflow Data and it simply shows the percent of buyers in each state that receive health coverage from public sources:
Oddly, the state that gets the highest proportion of public health coverage (New Mexico, 46.6%) is kitty-corner to the state with the lowest proportion of public health coverage (Utah, 21.3%).
Why the Debate is Paramount
If you ask some people what is going on with U.S. healthcare, they will tell you that things are going “sideways” – that costs are going up, but care is not improving anywhere near the same pace.
Here’s a graphic we published last year from Max Roser that puts this sentiment in perspective:
It’s fair to say that care has been going sideways in the U.S. for some time, and the stakes couldn’t be higher.
So, what needs to be done to fix the problem?
Markets
Beyond Big Names: The Case for Small- and Mid-Cap Stocks
Small- and mid-cap stocks have historically outperformed large caps. What are the opportunities and risks to consider?
Beyond Big Names: The Case for Small- and Mid-Cap Stocks
Over the last 35 years, small- and mid-cap stocks have outperformed large caps, making them an attractive choice for investors.
According to data from Yahoo Finance, from February 1989 to February 2024, large-cap stocks returned +1,664% versus +2,062% for small caps and +3,176% for mid caps. Â
This graphic, sponsored by New York Life Investments, explores their return potential along with the risks to consider.
Higher Historical Returns
If you made a $100 investment in baskets of small-, mid-, and large-cap stocks in February 1989, what would each grouping be worth today?
Small Caps | Mid Caps | Large Caps | |
---|---|---|---|
Starting value (February 1989) | $100 | $100 | $100 |
Ending value (February 2024) | $2,162 | $3,276 | $1,764 |
Source: Yahoo Finance (2024). Small caps, mid caps, and large caps are represented by the S&P 600, S&P 400, and S&P 500 respectively.
Mid caps delivered the strongest performance since 1989, generating 86% more than large caps.
This superior historical track record is likely the result of the unique position mid-cap companies find themselves in. Mid-cap firms have generally successfully navigated early stage growth and are typically well-funded relative to small caps. And yet they are more dynamic and nimble than large-cap companies, allowing them to respond quicker to the market cycle.
Small caps also outperformed over this timeframe. They earned 23% more than large caps.Â
Higher Volatility
However, higher historical returns of small- and mid-cap stocks came with increased risk. They both endured greater volatility than large caps.Â
Small Caps | Mid Caps | Large Caps | |
---|---|---|---|
Total Volatility | 18.9% | 17.4% | 14.8% |
Source: Yahoo Finance (2024). Small caps, mid caps, and large caps are represented by the S&P 600, S&P 400, and S&P 500 respectively.
Small-cap companies are typically earlier in their life cycle and tend to have thinner financial cushions to withstand periods of loss relative to large caps. As a result, they are usually the most volatile group followed by mid caps. Large-cap companies, as more mature and established players, exhibit the most stability in their stock prices.
Investing in small caps and mid caps requires a higher risk tolerance to withstand their price swings. For investors with longer time horizons who are capable of enduring higher risk, current market pricing strengthens the case for stocks of smaller companies.
Attractive Valuations
Large-cap stocks have historically high valuations, with their forward price-to-earnings ratio (P/E ratio) trading above their 10-year average, according to analysis conducted by FactSet.
Conversely, the forward P/E ratios of small- and mid-cap stocks seem to be presenting a compelling entry point.Â
Small Caps/Large Caps | Mid Caps/Large Caps | |
---|---|---|
Relative Forward P/E Ratios | 0.71 | 0.75 |
Discount | 29% | 25% |
Source: Yardeni Research (2024). Small caps, mid caps, and large caps are represented by the S&P 600, S&P 400, and S&P 500 respectively.
Looking at both groups’ relative forward P/E ratios (small-cap P/E ratio divided by large-cap P/E ratio, and mid-cap P/E ratio divided by large-cap P/E ratio), small and mid caps are trading at their steepest discounts versus large caps since the early 2000s.
Discovering Small- and Mid-Cap Stocks
Growth-oriented investors looking to add equity exposure could consider incorporating small and mid caps into their portfolios.
With superior historical returns and relatively attractive valuations, small- and mid-cap stocks present a compelling opportunity for investors capable of tolerating greater volatility.
Explore more insights from New York Life Investments
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