Healthcare Market Scared

I found this Wall Street Journal article very interesting:

The Affordable Care Act has been so good to health-care stocks that even a small possibility of change should cause concern.

The sector again sold off sharply Monday in the wake of a federal judge’s ruling last weekthat the law known as Obamacare is unconstitutional. Shares of hospital operator Tenet Healthcare and Medicaid-focused insurer Molina Healthcare both slid, for example. Including Friday’s losses, those two were off by 13% and 20%, respectively, by midday Monday.

The investing risks the ruling introduces are hypothetical but potentially severe. The law is still in place for now, so the ruling won’t directly impact the sector’s business operations and it could be years before all appeals are heard. This isn’t the first time that this politically charged law has faced a challenge.

Those caveats aside, the financial threat is real if the ruling sticks. By expanding access to health insurance via state exchanges for individual policies and a major expansion of Medicaid eligibility, Obamacare created millions of new customers. The result is an ideal environment in which to sell insurance, hospital beds, medical devices or pricey new prescription drugs.

There is a real chance that this environment evaporates and the downside could be significant. A broad index of health-care stocks has nearly tripled since the law passed in 2010. Whatever policy framework replaces it would likely reduce access to health insurance, creating a ripple effect on consumption.

Health care has been the strongest performer in the S&P 500 this year, living up to its reputation as a haven during uncertain times.

Losing that port in the storm could cause health problems up and down Wall Street.

So, here is the part people should focus on:

Those caveats aside, the financial threat is real if the ruling sticks. By expanding access to health insurance via state exchanges for individual policies and a major expansion of Medicaid eligibility, Obamacare created millions of new customers. The result is an ideal environment in which to sell insurance, hospital beds, medical devices or pricey new prescription drugs.

It was an ideal environment NOT for patients but for insurers, hospitals, drug and device makers! This article was from the business section that gives advice to investors. Now you know that the ACA was for these industries mostly. They reaped the rewards of increased profits and share price. As for patients, some benefitted but many got destroyed by this crappy law.

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125580cookie-checkHealthcare Market Scared