Are Healthcare Investors Betting on Obama?

By:  Jack Kenny
08/21/2012
       
Are Healthcare Investors Betting on Obama?

Few are predicting the Grand Old Party, which now has 47 Senate seats, will achieve the 60 needed to shut down the filibuster that Senate Democrats would surely wage against an effort to repeal ObamaCare. In short, Romney may have about as much chance of repealing ObamaCare as the Red Sox have of winning the American League pennant.

Are some of the nation's big investors in the healthcare field betting billions on President Obama's reelection? Andrew Ross Sorkin thinks so, and reports in his "Dealbook" column in the New York Times August 21 that a number of recent large investments in the healthcare industry indicate a confidence on the part of investors that the Affordable Health Care act will not be repealed and the federal government's growing involvement in the healthcare and health insurance industries will continue as scheduled under ObamaCare. And since Mitt Romney, Paul Ryan, and virtually every Republican running for any office higher than town moderator is promising to repeal the law, those investors must be expecting Obama to win — maybe.

Sorkin describes Aetna's recent acquisition of Coventry Health Care, a major provider of services under Medicare and Medicaid, as a $5.7-billion bet on Obama's reelection. Wellpont agreed to acquire Amerigroup for $5 billion, "just a little over a week after the Supreme Court's decision to uphold the Affordable Care Act," he notes. That was not long after Cigna acquired HealthSpring "in another bet on the expansion of Medicaid and Medicare."

But with the baby boom generation just beginning to reach retirement age, spending on healthcare for the elderly seems certain to increase, regardless of what changes may or may not be made to the Medicare law. And medical care for low-income families under Medicaid will continue and likely grow, given the political and economic policies that have created in America a permanent underclass of people dependent on government for their survival. As historian Niall Ferguson pointed out in the "Hit the Road, Barack" cover story in the latest Newsweek, "Nearly 110 million individuals received a welfare benefit in 2011, mostly Medicaid or food stamps." And that was 15 years after passage of the Welfare Reform Act of 1996, the bipartisan plan to "end welfare as we know it."

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Photo of Barack Obama: AP Images

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