With Health Debate Resolved, Investors See Continued Health Sector Growth
After months of uncertainty during the health-overhaul debate, financial analysts and mutual fund managers are feeling more stable and seeing upsides from the new law, The New York Times reports. "There does not seem to be any onerous cost control," one analyst said. Another added, "There is just an expansion of coverage [and] not a lot of surprises."
"Over all, fund managers tend to be bullish on most health-related sectors with the exception of the health insurance industry, where it's harder to gauge the impact of new regulations" (Fabrikant, 4/9).
Investment News: "Health care stocks have long been regarded by investors as conservative, defensive positions," because of their "necessary and desirable products," an aging population and resilience to economic slumps. None of that's changed. "The result of these domestic trends is that [CMS, the agency that runs Medicare] expects health care spending to grow 6.2% through 2018, nearly three times faster than the overall 2.1% growth of the U.S. economy" (Schoenstein, 4/11).
Meanwhile, the Des Moines Register reports that "President Barack Obama has promoted annuities as an effective tool for retirement savings. But a little-noticed tax in the health care reconciliation bill imposes a 3.8 percent tax on annuities purchased by high-income earners. ... The tax is the unearned income Medicare contribution. It taxes nonqualified annuity payouts, interest and rental income, dividends and capital gains of couples earning more than $250,000 [annually], or singles with more than $200,000" (Mracek, 4/11).