Healthcare is the worst performing sector in the S&P 500 so far this year. The reason has much to do with the Affordable Care Act, known as Obamacare. Why?
“There was a surge into the system of pent-up demand between when the bill passed in 2010 and when people had access in 2014,” Hedgeye Potomac Healthcare Policy analyst Emily Evans says in an interview with Keith McCullough. “Now that’s receded as people say ‘Thank goodness I got that hip replaced’ and drop their coverage when they face higher premiums.”
The effect of a surge in demand now “tapering” is hammering Healthcare stocks.
What’s next? Evans discusses a number of key issues, including what she expects from Trump and Clinton:
- Affordability: Calls to repeal the Affordable Care Act “still sells at home for the Republican Party, especially when costs and premiums are going up.” But a grand breakthrough, given all the gridlock is unlikely regardless of who is president.
- Drug Pricing: “Hillary Clinton’s drug plan isn’t that acrimonious to the drug companies.”
- Trump’s Plan: Largely pulled from the House Republican’s plan “A Better Way” in an effort to “keep whatever remaining support he has from the likes of Paul Ryan.
All told, gridlock will likely prevent any major fixes from getting done, aside from maybe work on “behavioral health,” or opioid abuse issues, until at least 2018, Evans says.
Click here to watch the full video “Clinton vs. Trump: How Election 2016 Will Impact Financial Markets.”
