Many are calling it the most significant legislation since Medicare and Civil Rights. What had been a tumultuous, and at many-a-time vicious battle for longer than a calendar year has now peaked with Democratic jubilation after a symbolic victory for the people when
Come to Health Care and Health Insurance.
The bill, President Barack Obama has signed into law, while not perfect, is the biggest sweeping change to the nation’s broken system of Health Care in generations. Much has been written about the bill’s content, what’s good, what’s missing, but markets have seemed to take it in stride.
Many of the legislation’s mandates will not come for several years, such as the requirement for health care and the Insurance Exchanges for increased competition, but many “bad practices” of insurance are being eliminated right now. Dropping of children for pre-existing conditions, dropping health care altogether when a person becomes ill or loses their employment, the ending of lifetime caps and several more.
So, how will Insurance companies cope?
As business in America typically does, fight for each extra dollar of profit. The Etna’s and Well-point’s and United Health’s of the country have held up rather well over the last couple of days since the bill was passed. After-all, in a few years’ time, there will be a mandate on individual health care, and that’s a large batch of new customers for these providers to go after.
An interesting editorial was written in the New York Times outlining the re-distribution of wealth this Health Care bill will encompass, a scolding look at a country moving away from the “age of Reagan”. A slanted, but worthwhile read.
The S&P 500, riding a month of continuous winning ways, is up almost 6% over the last 30 days. All this in the wake of the death and resurrection of the health care debate the president’s memorable Q&A with opposition Republicans, the Health Care summit, and now the bill’s passage and signing into Law.
With health care reform signed, sealed and delivered, and the promise of additional work to be done to improve the bill through Reconciliation, stocks are more focused now on housing numbers, employment figures and other economic factors.
New home sales fell 2.2%, representing an annual pace of 308,000, which is the lowest mark since data was tracked in the 1960. Not a great sign for a housing recovery just yet. Economists were expecting a number to come in at 318,000. The shortfall is being blamed mainly on the high unemployment (9.7% in the United States) and a timid banking sector being strategic in its lending practices, less than 2 years shy of the Great Financial Crisis.
The economic impacts here are clearly on the home builders, one of the big ones in this space being Pule Homes and makers of construction equipment and suppliers, which provide materials.
Another economic number that came in weaker than expected was Durable Goods. While goods orders rose 0.5%, this was less than the 1% rise forecast by economists. The silver lining here was the revised uptick for January with a rise of nearly 4%. The continued rise in these orders provides a definitive baseline for continued economic recovery.
On the heels of Health Care reform, the administration is looking for public sentiment to continue to carry the day and continue to be the backbone of a recovery economy. Because an America that is getting things done is perceived as a winning America and is as such an enthused populous.
Not only will the Health Care victory bring much political capital to the party, it’s not out of the realm of possibility that it’ll bring economic capital and economic growth with it. And that will bode very well in November.