Leveraged ETFs for the Obamacare Ruling

Health care stocks and ETFs are in the spotlight ahead of the U.S. Supreme Court's ruling on the Affordable Care Act, expected on Thursday. The court is likely to hand down one of three outcomes: keep Obamacare intact as-is, rule the individual mandate unconstitutional - thereby striking down the overall law itself - or rule against the individual mandate while upholding the rest of the law.Traders have multiple ways to play these possible outcomes beyond traditional long ETFs such as the Health Care Select Sector SPDR (NYSE: XLV) and the iShares Dow Jones U.S. Medical Devices Index Fund (NYSE: IHI). Those with a taste for adventure should consider the following leveraged ETFs ahead of and after the Obamacare ruling.ProShares UltraShort Health Care (NYSE: RXD)The ProShares UltraShort Health Care ETF seeks to deliver twice the inverse daily performance of the Dow Jones U.S. Health Care Index. That index is tracked by the iShares Dow Jones U.S. Healthcare Sector Index Fund (NYSE: IYH), so those that are long RXD ahead of and into the Obamacare ruling will want to be tracking the action in stocks such as Dow components Johnson & Johnson (NYSE: JNJ) and Pfizer (NYSE: PFE).Traders with long positions in an ETF such as RXD - or short individual pharmaceuticals names - should cheer for the individual mandate to be struck down, but for the rest of Obamacare to be upheld. S&P Capital IQ said in a research note that this scenario could pressure managed care providers, pharmaceuticals makers, health care facilities operators and health care services providers.The ProShares Ultra Health Care ETF (NYSE: RXL) is RXD's bullish equivalent. As of the close of U.S. markets on June 25, Johnson & Johnson, Pfizer and Merck (NYSE: MRK) accounted for about 30% of RXD's weight.Direxion Daily Healthcare Bull 3X Shares (NYSE: CURE)Give Direxion, the second-largest issuer of inverse and leveraged ETFs, credit for raising awareness of CURE ahead of Thursday's ruling."If the Affordable Care Law stands: The Congressional Budget Office ('CBO') says health insurance companies will have 32 million more customers. Insurers would benefit from the new insurance marketplaces or exchanges that states would have to set up for individuals shopping for insurance," Direxion said in the note.On the other hand, if the individual mandate is revoked but the rest of the law is upheld, Direxion said the following regarding CURE: "If the court repeals the mandate as well as provisions requiring non-discriminatory coverage for people with pre-existing conditions, that could be a boon for insurance companies, since the federal government would still provide tens of billions of subsidies for people to buy insurance."Direxion Daily Healthcare Bear 3X Shares (NYSE: SICK)SICK is CURE's bearish cousin. This fund could benefit even if the individual mandate is struck down and the rest of Obamacare is upheld. In Direxion's note, the company stated that, "if that happens, it may not last long because Congress would likely quickly act to repeal the subsidies."Both CURE and SICK track the S&P Health Care Select Sector Index, the same index used by the Health Care Select Sector SPDR.For more on Obamacare trading ideas, click here.