Also in this playlist...
This transcript is automatically generated
One thing for sure health care in the -- watching this very closely because of course he affordable health care act with President Obama still in power.
Looks to be sitting tight and staying there not being repealed let's get to Alex Alex is the Morningstar health -- analyst director.
So this reelection of the president means.
That -- states what does that mean for the health care sector and we know that's a very broad statement it can be chopped up into sub sectors.
Rachel -- EC is here to stay as you pointed out.
And judging by the market's reaction yesterday and today.
Investors are clearly spooked what -- he might mean for the various industries within health -- sector.
Up pretty much the sell -- was across the board managed care companies with the exception of Medicaid while we're down device companies were down pharmaceutical companies down.
Hospitals were up quite a bit because a lot of folks think that the HCA will bring a lot of positives to the hospital industry and that's the industry that just doesn't have -- many positives going for it.
I think -- -- data sell off on hospitals commenced because I think at the end of the day.
A lot of a lot of people recognize that.
In the HCA are not the hospital industry is something that just not not the most attractive a place to -- us.
But again we're adding thirty million plus people to the insurance rolls but -- if we were to look at that the spending.
From before the I'd like a CH sort of an affordable health care -- have to say that over and over again but if you compare the spending before and then what the spending might be after.
The belief was that it would bend the cost curve or at least the expenditure curve and as we look at some of the numbers there.
The hospitals stand to benefit because more people will show up but they'll actually be insured.
And hence it won't be this charity coverage that we've talked about right simply look at certain of the hospital names.
You can see that that these are names like HCA Tenet health -- that did beautifully yesterday but what's gonna forego some of the insurance and -- -- different kinds of insurers.
They how they stand affair.
Grateful managed care has been an industry group a lot of investors have been avoiding.
The last couple years primarily because ever since the passage of the ACA and and the subsequent.
Confirmation of individual.
Mandate a lot of folks pretty much presume that that HCA is a bad thing for the insurers.
Why it while there are -- number of pediatricians doing their highs up until last month more than not putting.
Well but if you look at did the Q3 year track record that's something that that.
That is definitely a lot more negative.
-- still com.
-- -- Yes the so that is that the insurers right now -- they stand to to the to lose a lot under the CA they're -- they're underwriting ability is -- -- be severely limited do you -- -- our -- -- Well we do we like a lot of names actually primarily -- WellPoint because we think that that the -- impact is a little misunderstood at this point I think they're still so many positives that -- -- many investors not fully not fully understand.
One of them being this -- in the month of formerly uninsured individuals entering the marketplace.
Particularly Medicaid we we expect somewhere in the vicinity of fifteen to seventeen million people to be enrolled in Medicaid additional people -- 24 clean.
And now that's the number -- gonna go directly to the to the insurance company.
Alex I only a few seconds left but medical device makers this is a big issue because there's an excise tax attached to -- ACA and about 2.3 percent make you know what any names here that you feel could still really do well and and watch their margins and come out winners.
What absolutely companies like committee and -- we have to remember that you put at 3% excise tax.
It's only is applicable to the US sales though so a lot of the companies that -- Are more internationally.
-- have a little bit more international exposure companies like comedian actually don't that I feel the full brunt of thought 2.3 percent.
And at the end of the day there's still so many so many ways that -- device companies can help cut the costs overall still it over -- longer run I think that there's a lot of value there are companies like comedian as a stand.
Company and down about 1% right now Alex good to see -- thank you so much.
You welcome Alex -- out of he's Morningstar health -- analyst director closing bell ringing in.
Filter by section