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Could Obamacare put a damper on health care funds?
I think you need to break it down by type of company and, short and long term.
Insurance companies should do well - companies are canceling employee programs. Employees are now forced to purchase higher cost policies - more money for the companies. Short term OK, long term who knows.
Health providers - that cover Obama care should be OK in the short term. Also, more procedures are covered to be mandated in the plans. Long term there might be problems as cost reimbursements get cut.
Health provider - that don't cover Obama care will be OK - people that can afford them will go there.
With more folks under coverage for their healthcare, I believe it will increase the market for baseline pharma, and increase demand overall for services. And I think that may have been a contributing factor in the performance of HC over the past 5 years, when the law was first passed.
I'll say no. Whatever effect it may have (given how healthcare has done, it would appear to be positive) has already played out, given all of the discussion over time since it was first announced. Healthcare is going to be effected at some point by the fact that the sector has run up as much as it has. I think that there are healthcare themes large and small that will continue to play out for a long time and those may head South at some point due to the run-up/valuation, but I think there are healthcare sectors where you just have to have a long-term view and just buy and hold.
Healthcare, with few exceptions, is one instance where I will admit that I feel more comfortable with a manager than individual names in most instances. I do own one individual healthcare name and I continue to own (and like) HQL, the CEF.
I took profit on it, but the other individual healthcare play that I like and may look at again at some point is distribution co Amerisource Bergen (ABC), which I think is an enjoyably dull, predictable way to play healthcare.
Reply to @Daves: I have no hesitation towards recommending a healthcare fund for a long-term (even 5 years, which is an eon in terms of the investment time-horizon that many people have these days) holding. Maybe average in to some degree and know the sector has already had a substantial run.
I don't see how it can. There are no regulations in ACA that will pressure prices or margins down in any of the sectors. That may change with future regulations but not with this.
Insurers can't cancel or decline to renew for people who develop medical issues but that has happened only in individual health insurance and the premiums are going up there to price in that cost.
Geez, the industry wrote the bill, it should benefit them. Until you see a one payer system, costs are going to go up on all fronts - health insurance, medical, hospitals, drugs - and there are no constraints, particularly out of Washington, on any of these costs.
Yes, ACA should benefit the insurance companies. But what happens when demographics don't pan out like they plan? How much bailout will the Feds be willing/able to do if things get really grim for insurance companies in 3-5 years? The jury is still out on this one.
Comments
Insurance companies should do well - companies are canceling employee programs. Employees are now forced to purchase higher cost policies - more money for the companies. Short term OK, long term who knows.
Health providers - that cover Obama care should be OK in the short term. Also, more procedures are covered to be mandated in the plans. Long term there might be problems as cost reimbursements get cut.
Health provider - that don't cover Obama care will be OK - people that can afford them will go there.
With more folks under coverage for their healthcare, I believe it will increase the market for baseline pharma, and increase demand overall for services. And I think that may have been a contributing factor in the performance of HC over the past 5 years, when the law was first passed.
Were you perhaps looking for a different answer?
Healthcare, with few exceptions, is one instance where I will admit that I feel more comfortable with a manager than individual names in most instances. I do own one individual healthcare name and I continue to own (and like) HQL, the CEF.
I took profit on it, but the other individual healthcare play that I like and may look at again at some point is distribution co Amerisource Bergen (ABC), which I think is an enjoyably dull, predictable way to play healthcare.
Regards,
Ted
Sounds good!
Insurers can't cancel or decline to renew for people who develop medical issues but that has happened only in individual health insurance and the premiums are going up there to price in that cost.
Geez, the industry wrote the bill, it should benefit them. Until you see a one payer system, costs are going to go up on all fronts - health insurance, medical, hospitals, drugs - and there are no constraints, particularly out of Washington, on any of these costs.
And so it goes,
peace,
rono