CHART OF THE DAY: Those Fickle Fed Fund Futures

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more. 


...Yellen’s Fed is much shorter-term than that. If she does what the market is telling her to do right now (Fed Fund Futures dropped to 32% on a SEP hike), this will be her 6th pivot (hawkish-dovish-hawkish-dovish-hawkish-dovish), in 9 months.


CHART OF THE DAY: Those Fickle Fed Fund Futures  - cod 09.06.16 chart

Old New Data

“The old in the new is what claims the attention.”

-William James


You see, I don’t have a confirmation bias. Once in a while, Harvard grads have come up with some good ideas too. William James died in 1910 but is rightly revered as one of the most important psychologists and thought leaders in American history.


I wonder how he’d psycho-analyze Janet Yellen…


Oh, you didn’t hear? She’s “data dependent.” Lol. On the heels of a recessionary ISM report last week, the latest US jobs report was yet another new confirmation of what’s becoming an older TREND. Since peaking in 2015, the US labor market continues to slow.


Back to the Global Macro Grind


Slow. You know – in rate of change terms. While the Fed continues to cling to old “indicators” (like the Phillips Curve), my generation of economists and strategists have evolved the predicting process to just letting the old cycle data instruct the new.


That’s right. Most long-cycle macro data is glacial in terms of how it trends. Peaks and troughs are processes. They take time to manifest. But when something big and super #LateCycle like the rate of change in Non-farm Payrolls (NFP) puts in a cycle-peak, it slows to flat (year-over-year), then negative (year-over-year), 100% of the time.


Yellen’s Fed is much shorter-term than that. If she does what the market is telling her to do right now (Fed Fund Futures dropped to 32% on a SEP hike), this will be her 6th pivot (hawkish-dovish-hawkish-dovish-hawkish-dovish), in 9 months.



Old New Data - Yellen cartoon 09.17.2014NEW


But, Keith, Keith – “what if she still hikes?”… what if she makes her 2nd policy mistake in 9 months and just does it anyway? A: she can do whatever she wants and the precedent of going against both the market and the data is established.


*See DEC rate hike for details


On a very short-term basis (2 week duration), there isn’t anything big in the USD Correlation Risk matrix that would like a Dollar Up, Rates Up surprise in September from Yellen:


  1. USD vs. SP500 inverse correlation -0.46
  2. USD vs. Oil inverse correlation -0.70
  3. USD vs. CRB Index inverse correlation -0.90


And being a steadfast Gold Bond Bull, I most certainly wouldn’t enjoy it either (Gold’s 2-week inverse correlation with USD is -0.78). So how about from a positioning and sentiment perspective? Who’d be up for a rate hike (CFTC futures & options data)?


  1. SP500 (Index + Emini) net LONG position ramped another +22,325 contracts last week to +227,291
  2. Russell 2000 (mini) net LONG position built to a YTD high of +22,075 (that’s 2.89x on a 1yr z-score!)
  3. 10YR Treasury net LONG position doubled by +61,722 contracts (week-over-week) to +120,196
  4. Crude Oil net LONG position came down -10,612 week-over-week to +373,618
  5. Gold net LONG position came in -26,802 week-over-week to +238,152 (that’s +1.07x on a 1yr z-score)


In other words, Janet, from a net positioning perspective everyone is NET LONG everything!


I get that. Ex some Financials shorts (gotta ex-out when I don’t like being wrong, eh?), that’s why I was positioned as long as I’ve been all year (net and absolute) in our Real-Time Alerts and Asset Allocation products last week.


But also understand that if we move back to the top-end of my immediate-term risk ranges in some of these asset classes, I’m a seller, not a buyer of green. Lots of macro market signals are currently implying range bound markets so buy/cover red, sell/short green.


Financials (XLF) were +1.9% last week to +3.1% YTD, I assume, because more than a few of you are thinking there’s still a better than 32% chance that she raises rates. I hear you. Same old song on “it’s only 25 beeps.” Nothing new vs. what I heard in DEC there.


That’s probably why the 2yr and 10yr US Treasury Yields were only down -3 and -6 basis points, respectively, week-over-week. Pre the August ISM print of 49.4 the 2yr Yield tapped 0.85%. Now it’s back down to 0.79%. The 10s/2s Yield Spread remains at +81bps.


But Utilities (XLU) and REITS (MSCI Index) were +1.0% and +1.5% week-over-week to +14.7% and +12.0% YTD, respectively, too. So what is it – hike or no hike?


Maybe there’s nothing new to see here at all as the 1-year old #GrowthSlowing TREND @Hedgeye remains firmly intact.


Our immediate-term Global Macro Risk Ranges are now:


UST 10yr Yield 1.52-1.62%

SPX 2165-2187

VIX 11.21-14.32
USD 94.39-96.50
Oil (WTI) 42.99-46.18

Gold 1


Best of luck out there this week,



Old New Data - cod 09.06.16 chart

Thank goodness for all the #GrowthSlowing U.S. data in August!

Client Talking Points


Not that anyone is short-term these days, but with the Fed Funds Futures at 32% on SEP, markets are betting on Yellen pivoting for the 6th time in 8 months – Down Dollar has a -0.5-0.9 (2-week) inverse correlation with SPY-CRB Index.


Interesting move here; on a week-over-week basis both 2yr and 10yr yields ended up down -6bps and -3bps, respectively; JGB 10yr +2bps to -0.03% this am on BOJ commentary of not making a move until they see what the Fed does; tightening into a slow-down and/or when Fed Funds aren’t pricing it as probable would be super interesting.


Still one of the easiest macro long positions to stay with at this stage of the FX War as Japan, Europe, and the USA all try to out-ease one another; Gold +0.2% last wk and another +0.3% this am to +25.4% YTD (it’s a currency too).

Asset Allocation

9/5/16 42% 8% 8% 15% 21% 6%
9/6/16 44% 7% 8% 14% 21% 6%

Asset Allocation as a % of Max Preferred Exposure

9/5/16 42% 24% 24% 45% 64% 18%
9/6/16 44% 21% 24% 42% 64% 18%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

Top Long Ideas

Company Ticker Sector Duration

See update above.


Income & Consumption

Slowing employment growth + a decline hours worked + deceleration in earnings growth will = a deceleration in aggregate income growth when the official data are reported at the end of the month.  Absent a significant decline in the savings rate and/or significant re-acceleration in credit growth, consumption growth can be expected to track income growth lower. 


Industrial Activity 

The -14K decline in manufacturing employment in August accords with the retreat in the employment subcomponent in the ISM manufacturing report.  Lower manufacturing employment and a slowdown in manufacturing hours worked also points to a sequential decline in Industrial Production when that data is reported later in the month.  In short (and in the short-term), bad economic data is good as falling rate hike expectations support asset price inflation.  Over the intermediate-term, "slower-and-lower-for-longer" continues to characterize the growth, inflation and interest rate outlook and support #GrowthSlowing allocations in bonds, gold, and dollars.   While incremental dovishness from the Fed may serve as a short-term headwind to the dollar, the structural case for the $USD amidst ongoing policy divergence between the U.S. and the balance of global DM markets remains intact.   

Three for the Road


It's (very) unlikely #Fed raises rates before #Election2016. Here's why via @KeithMcCullough…



“The old in the new is what claims the attention.”

-William James


Mike White of Western Kentucky leads the NCAA in passing with 517 yards.

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This indispensable trading tool is based on a risk management signaling process Hedgeye CEO Keith McCullough developed during his years as a hedge fund manager and continues to refine. Nearly every trading day, you’ll receive Keith’s latest signals - buy, sell, short or cover.

The Macro Show with Keith McCullough Replay | September 6, 2016

CLICK HERE to access the associated slides.

An audio-only replay of today's show is available here.



BlackStone Group (BX) | Economic Gravity - Adding to Best Ideas List as a Short

Takeaway: We are hosting a new Best Ideas call tomorrow Wednesday September 7th at 11 am EST to discuss BlackStone Group as a short idea.

BlackStone Group (BX) | Economic Gravity - Adding to Best Ideas List as a Short - cover invite smaller


Rate of Change Decelerating: BlackStone is a market leader in all four of its business lines and a well liked and respected company which make it a dangerous stock in our view. The core factors that drive shares are starting to decelerate with distributable earnings sourced by net accrued performance fees now declining which is forcing the stock down in lock step. We calculate to make the Street's estimates next year that BX will have to expend 74% of its year end 2016 accrued performance fees, almost double the 39% put out for distributions in 2016 and over 10 points more than the former high of 61% of accrued fees in 2014. 


Big Data Points to a Hyper Cyclical: The causal factors of BX stock price and internal fundamentals point to a hyper cyclical stock with positive coefficients to all market indices, consumer confidence, and nonfarm payrolls. Negative betas are evident to corporate credit costs, the U.S. unemployment rate, and both equity and fixed income volatility. With the economy entering late cycle territory and the path of least resistence higher for both vol and unemployment trends, we think investors risk overstaying their welcome remaining long the stock compared to the growing risks of shares inflecting lower with the economy.


Earnings Quality Will Matter Again:  The entire Alternatives group ranks poorly as Non GAAP accounting beneficiaries which make results look stronger than they really are. The entire earnings quality measure of the S&P 500 has been deteriorating since 2009 and is now back to the worse levels since 2007. The S&P 500 is now averaging a GAAP-to-Non GAAP ratio of 77%, which means that there is a -23% discount between adjusted and GAAP results. The Alternatives are much worse averaging a 59% ratio, or a GAAP discount of -41%. When the tide turns and investors look for safety in defensive stocks, we think the Alternatives group will fail to qualify for that category and will experience substantial declines on a flight to quality. 


Fair Value? Our base case valuation for BX shares is $20, or ~25% downside from current levels with a $15 per share valuation in our Bear case scenario, or -40% downside.


CALL DETAILS - Wednesday, September 7th at 11 am EST

  • Toll Free Number:
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  • UK: 0.
  • Conference Code: 13642040
  • To Automatically add to your Outlook Calendar Click HERE
  • For the Events Page and Live Video Link and Event Materials Click HERE


Please let us know of any questions.

Jonathan Casteleyn, CFA, CMT 



Joshua Steiner, CFA



Patrick Staudt, CFA


Medicaid for the Middle Class

Takeaway: The biggest health insurers are bailing out of the exchanges—with ominous consequences for the future of private insurance.

Here's a preview of the next issue of "About Everything." You're welcome to join a Hedgeye Q and A on this topic next week, date and time soon to be announced.


Back in the early months of 2010, federal agencies made a fair number of optimistic forecasts about how Obamacare would turn out. Today, it's fair to say, none of these forecasts has been met--and most have not even come close. Let's forget the White House here (of course they were trying to sell the new plan). Let's just focus on the nonpartisan CBO.


Back in 2010, the CBO said the exchanges would enroll 21 million Americans by 2016. Actual 2016 number: 12 million (including unsubsidized enrollees). Back then, the CBO, along with the president, assumed no American would lose their plan or their doctor. 2016 reality: Millions have lost both, as the traditional "choice" insurers have dropped out of the exchanges and the insurers who remain have tightened their networks. Back then, the CBO said that Medicaid enrollees would expand from 40 to 52 million. By 2016, in fact, they have risen to 68 million. Back then, the CBO said that the uninsured population would plummet from 50 to 21 million. By 2016, in fact, it has declined to 27 million--still a dramatic drop, but not as big as advertised. Back then, the CBO anticipated that healthcare spending as a % of GDP would continue to flatline. Instead, over the last two years, it has surged to a new historical high.


In this piece, I look closely at one failure in particular--the inability of the exchanges to attract nearly as many enrollees as was expected--and I try to connect that to two other developments: the unanticipated explosion in Medicaid enrollment and the tendency of the exchange plans and non-exchange individual plans themselves to become more Medicaid-like. I also consider the growing share of employer plans that feature either high deductibles or greatly restricted provider choice.


So here's some simple arithmetic. As a share of all nonelderly adults, Medicaid now comprises 25%. Nongroup exchange and individual plans, 12.5%. Bare-bones employer coverage, another 8%. And then let's add in the uninsured, at 10%. So somewhere just over half of all nonelderly Americans are in plans that control costs through a strong and explicit rationing component.


Is it hyperbole to talk about Medicaid for the middle class? Perhaps not, since no one wants to bear the rising costs--and since market means of containing demand (through prices) have been rendered null and void. I'm not saying this is good or bad. I'm just saying it's a reality that will shape the future of the healthcare industry. 

Medicaid for the Middle Class



Are the public exchanges instituted by the Affordable Care Act (ACA) falling to pieces?


Some of the largest health insurers in the nation appear to think so. Aetna (AET) is planning on leaving the exchanges in 11 out of the 15 states where it currently operates. UnitedHealthcare (UNH) will operate in just three state marketplaces in 2017—down from 34 in 2016. Humana (HUM) will offer exchange plans in only 156 counties in 2017, a huge drop from 1,351 counties in 2016.


When three of the “big five” U.S. health insurers speak, you listen. (Cigna (CI) and Anthem (ANTM) currently plan to maintain their presence on the exchanges.)


What’s going on? Some have speculated that Aetna just wants to spite U.S. regulators who pumped the brakes on the company’s intended merger with Humana. But the truth is that the exchanges have fallen into a two-pronged “death spiral” that is rendering them unprofitable for most conventional (choice-oriented PPO) insurers.


Here’s how it works: Unhealthy people naturally tend to sign up for the highest-cost plan available, because they know they’re likely to use the extra coverage. Before the ACA, insurers could limit this “adverse selection” by various means, such as underwriting, coverage limits, preexisting condition exclusions, lifetime spending caps, etc. Since the ACA, most of these means are no longer allowed. Now, the insurers’ only recourse is to raise premium prices for everyone—which further deters healthy people from enrolling.


The ACA hoped to avoid the resulting implosion by subsidizing the exchange marketplaces with enough public money so that everyone would feel they are getting a good deal. But that hope is running aground on two further facts: (a) the subsidies are overwhelmingly directed at the poorest enrollees; and (b) health is strongly correlated with income. Thus, the subsidies mostly go to those who would happily join (if they had the money) in any case—not to the marginal enrollees who are healthier and wealthier and paying out of their own pocket.


Consider: A family of three earning $25,000 a year—or 124% of the poverty line—pays just 2.04% of its income toward healthcare ($50 per month), with the rest covered by subsidies, not just the premiums but also most of the cost-sharing. Compare that to a family of three earning $55,000 a year, or 273% of the poverty line. That family pays over 9% of its income toward insurance premiums—nearly $400 per month—and it also must pay full freight on additional cost sharing.


Medicaid for the Middle Class - healthcare2


Result: A big tipping point is emerging at about 150% to 200% of the federal poverty line.


Below that threshold, rising costs make the deal ever-better for enrollees. Above that threshold, rising costs make the deal ever-less attractive. For high earners, it often makes more sense to pay the Individual Mandate fee (in 2016, this amounted to $695 per adult plus $347.50 per child, or 2% of their annual income, whichever is higher) than to shell out thousands from their own pocket for insurance. If they really do get sick, they can pay the late fee and enroll (most of these fees are still being waived), they can spend down and qualify for Medicaid, or they can just try the “charity care” route—which has long been the recourse of the uninsured.


The exchanges are an especially painful choice for Millennials who lack employer coverage and who earn decent money in the gig economy or as permatemps. This is because young adults are usually pretty healthy and the bottom policy price allowed by the ACA is still much higher than the actual average cost of this age bracket. In other words, each uncovered Millennial earning around $30,000 or so represents a big subsidy to the exchanges—so much so that many marketplace plans publicly announce the share of the young uninsured they need to recruit in order to break even.


What’s amazing is not how many Millennials don’t sign up for this terrible deal, but how many do. To attract more of them, maybe Millennials should organize and suggest a deal with Boomers: You start forgiving our student loans, and we’ll start writing checks for your joint replacements. Just a thought.


In any event, the emergence of a tipping point is foiling ACA’s grand vision that the exchanges would constitute a close substitute for the type of choice-rich plans available through employer coverage. Rising costs are instead pushing the uncovered middle class into two groups, one richer and one poorer.


For those in the healthier and higher-income group, the marketplace plan tends be such a bad value that the firms targeting them—firms like AET, UNH, and HUM who have experience in employer group plans—are starting to give up. Three-quarters of insurers, including the entire big five, lost money on their exchange plans last year. And no one likes losing money. Their exodus has been hastened by the GOP-led closure of “risk corridors,” which further hammered insurers that were relying on government funding to offset their losses during the ACA’s early years. As NYT correspondent Margot Sanger-Katz put it: "Six years into the health law, the reality is that the typical Obamacare plan looks more like Medicaid [than employer-provided insurance], only with a high deductible."


For those in the less-healthy and lower-income group, on the other hand, the marketplace plan is a great value. Indeed, there is no unsubsidized alternative that could possibly compete with it. Which means that the key to success here is not expanding service and choices to attract enrollees—but rather constraining choices and limiting costs to preserve margins. Unsurprisingly, this is leading to a “Medicaid-ization” of the exchanges and a huge opportunity for traditional Medicaid insurers like Kaiser Permanente (private), Anthem (ANTM), Molina Healthcare (MOH), and Centene Corporation (CNC).


Medicaid for the Middle Class - healthcare3


While many big boys are fleeing the marketplace, some of the smaller firms are scaling up. Molina more than doubled its exchange membership YOY in Q1 2016. Centene’s ACA membership more than quadrupled over the year ending in March largely due to its acquisition of fellow Medicaid insurer Health Net.


These firms, quite simply, are catering to low earners and restricting access to costly providers. For example, roughly 90% of Centene’s marketplace customers qualify for premium subsidies.


What’s more, with the titans facing mounting resistance to their merger bids, smaller Medicaid-focused insurers like these could become prime acquisition targets. All of this adds up to a good buy: Analysts project that Molina’s EPS will grow at a 17.7% pace annually over the next five years, double its growth rate for the previous five years.




So yes, the public exchanges are a bleak prospect for most mainstream insurers. But zooming out, these troubles point to an even bigger challenge facing the health insurance industry: the continued fragmentation of healthcare.


The exchanges were supposed to become a central and standardized hub where all of Middle America could find quality healthcare. We’d be left with only small and shrinking tiers of coverage above (employer-provided plans) and below (Medicaid).


But that’s not what’s happening.


Employer-provided coverage splinters. The share of nonelderly Americans covered by employers has long been on a slow decline—from just over two-thirds back in the late 1990s to just over half today. Some of the drop is due to falling labor force participation. Some is due to employers deciding they can’t bear the cost.


Medicaid for the Middle Class - healthcare4


In future years, the CBO projects that some firms (especially penalty-exempt small firms) will continue to offload their employees onto exchanges or individual plans. But the overall decline in the employer-covered share is now expected to be very modest—nothing like the huge drop anticipated when the ACA was enacted. “Employer coverage is much more stable than anyone anticipated,” says Larry Levitt of the Kaiser Family Foundation.


A more significant likely trend is the further splintering of employer plans into a variety of tiers. Once upon a time (see 1988 in chart below), most employers offered unrestricted fee-for-service reimbursement. Today such coverage is almost unheard of. Instead, most employees belong to PPO plans with widely varying levels of restriction—and about a quarter of employees belong to new “consumer-driven” plans with high deductibles. A growing number of employers are capping their cost by sending their employees to “private exchanges.”


Medicaid for the Middle Class - healthcare5


The “Cadillac tax” on expensive employer-provided plans, now due to hit in 2020, may chop away at employer generosity at the high end. But Congress clearly has little appetite to enforce this tax, which is likely to be deferred (again) or gutted before it ever takes effect.


Public exchanges and individual coverage spar over a narrow middle ground. Just before the ACA, individual plans covered 11% of working-age Americans not covered by an employer. Today, contrary to expectations, they still cover 8%. The exchanges cover another 8%. Thus far, in other words, the exchanges’ share has grown a bit at the expense of individual plans, of employer plans, and of the uninsured. But they have been a minor player overall.


Medicaid for the Middle Class - healthcare6


Individual coverage remains remarkably resilient. The KFF estimates that, three full enrollment seasons in, 57% of all non-employer plans were individual plans purchased outside of the exchanges. This figure includes “grandfathered” plans purchased prior to the signing of the ACA (which never expire), as well as “grandmothered” plans purchased prior to the start date of the first open enrollment (which must terminate by the end of 2017).


As for the public exchanges, the CBO has been steadily downgrading its growth projections. And if competition in the exchange marketplace dies off altogether, the exchange share may actually shrink.


Medicaid coverage surges. The ACA has triggered an explosion in Medicaid spending. Hands down, this is where the ACA is having the most consequential impact on healthcare coverage. Monthly enrollment for Medicaid and the Children’s Health Insurance Program is up 27% from pre-ACA levels. All told, 11 million Americans have gained Medicaid coverage since the ACA’s rollout—accounting for more than half of all Americans who have gained insurance during that period.


Incredibly, this means-tested program founded in 1965 to care for the destitute elderly and disabled now provides benefits to 77 million Americans (only 7 million of whom are seniors). That’s exactly one out of every four Americans under age 65.




Of course, by extending coverage to millions of uninsured Americans and by suppressing most traditional methods of marketplace rationing, the ACA has pushed our nation’s healthcare tab upward since the beginning of 2014—to 18.2% of GDP in June, an all-time high.  


In the years to come, policymakers will clearly be looking for better ways to rein in costs. One way would be to double down on high-deductible plans, since these “consumer-driven” plans force enrollees to think twice or shop around before seeking care that may be unnecessary. Yet high deductibles are a poor means of encouraging most providers to offer more cost-effective care. What’s more, they are a nonstarter for Americans who simply can’t afford to pay a high deductible.


A better way to incentivize providers to restrain prices is to implement policies that reward cost savings against a measurable quality-of-care standard. Such a “value-based reimbursement” (or P4P) approach assesses the quality of care that patients receive and rewards star-performing providers with a portion of the savings. “Bundled care,” now being heavily tested by CMS, is an example of P4P in practice.


Ultimately, however, the future may lie in a more draconian approach: “capitated care.” Here, the insurer-and-provider accepts a flat, risk-adjusted payment for all care delivered to the enrollee over the coming year. To anyone over the age of 40, capitation brings to mind America’s brief, ill-fated flirtation with HMOs back in the ‘90s. Still, it may represent the only approach that can stymie the sort of end-run gaming (like up-coding) that seems to foil every other effort to control spending.


The most promising form of capitation on the horizon—now being tested by several of the big five—is “direct primary care,” which features unlimited concierge-like access to general practitioners. Hospital management firm Qliance finds that direct primary care can reduce costs by as much as 20% while improving patient satisfaction and quality of care. Once tax laws and regulations are adjusted to put this form of care on a level playing field, its growth is certain to accelerate.




Watch for more states to abandon their ACA exchanges. New KFF analysis finds that nearly a third of U.S. counties (17 percent of all eligible Americans, according to the McKinsey Center for U.S. Health System Reform) could have only one marketplace insurer in 2017—with one Arizona county poised to have zero Obamacare options. Some states are taking drastic measures to stop the bleeding: Mississippi approved a 43% rate increase to keep Humana on its exchanges.


Other states may shut down their exchanges entirely now that federal subsidies are running dry. (Oregon and Hawaii have already done so.) In fact, KFF’s Larry Levitt predicted in 2015 that as many as half of state-run exchanges could be abandoned within five years. This would likely hurt plan quality, since states can mandate higher benefits than federal law requires. The state flight from the exchanges would thus further accentuate healthcare’s “death in the middle.”


Insurers should brace for an impending dearth of high-margin private customers. In 2012, per-enrollee private healthcare spending for 45- to 64-year-olds was $7,131—which was $2,000 more than the next-youngest age group. High prices typically point to high margins. But demographic headwinds threaten this lucrative end of the private insurance market: The 45- to 64-year-old population is poised to shrink by 2% between 2015 and 2030, even while the 65+ population surges by 45%.


Medicaid for the Middle Class - healthcare7


This shift represents the worst of both worlds for insurers. They will face shrinking demand from their high-margin customers while reaping none of the cost savings—since providers won’t see any shortage of demand thanks to a new flood of elderly patients funded by public benefits.


Don’t expect the 2016 election results to settle the matter. Clinton has vowed to “defend and expand the Affordable Care Act,” in part by creating a government-funded “public option” and (perhaps) by lowering Medicare eligibility to age 55. Yet neither of these expensive proposals could possibly be enacted so long as the GOP retains the House. And Clinton would need a historic landslide to overcome that roadblock.


Trump, on the other hand, wants to repeal the ACA and to free insurers from antitrust regulations and laws that prohibit them from selling policies across state lines. These may be helpful ideas (and might lead America to the “Swiss model”), but they don’t in themselves suggest an alternative to exchanges and to the recent Medicaid expansion. Even Trump would have to replace them with something.


In short, nothing that either Clinton or Trump is proposing could, realistically, save America’s middle class from health-insurance limbo.



  • After years of huge losses, many of the largest U.S. health insurers are leaving the public exchanges. While some Medicaid insurers are profiting on the ACA marketplace, the withdrawal of three of the “big five” leaves many U.S. counties on the brink of zero coverage in 2017.
  • While the ACA was supposed to create a unified marketplace with a booming middle-class public insurance option, the nation’s healthcare system more tiered—and more costly—than ever.

Early Look

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