Stock Market Reacts to Health Care Ruling
The Supreme Court released Thursday morning a landmark decision on Obama’s Affordable Care Act. The High Court upheld the act and found the individual mandate to be constitutional as a tax in a 5-4 ruling. (Find out here how it will affect you.)
The flurry of news accompanying the decision, released around 10 a.m. Thursday morning, contributed to some interesting stock market activity that day. We break down the companies that benefited and lost in the immediate aftermath of the court’s decision to uphold “Obamacare:”
WellPoint, a major health insurance company, had its stock fall almost 6%. Other health insurance providers saw similar drops.
Investors believe the Affordable Care Act will bring higher costs for insurers; plus, the law places a cap on insurance company profits. So, overall, insurance companies are at a loss because they are concerned about future revenue.
Hospital Corp. of America was up 7% this morning on the news of the Supreme Court’s verdict.
The health care law will bring in new patients as well as bring down the number of emergency room visits by those who are not covered. So, overall, it’s a win for health care providers.
Pharmaceutical companies faced slight dips in their stock performance after the ruling was released. Pfizer inched down 1%.
Pharmaceutical companies will face new taxes under “Obamacare” and will need help closing the drug coverage gap with Medicare.
Surprisingly, wellness programs like Weight Watchers had a positive performance in the stock market. The Weight Watchers share price spiked in the morning and was up more than 2 percentage points.
Under the Affordable Care Act, employers are more likely to fund wellness initiatives for their workers, like gym memberships or weight-loss programs, so that they won’t have to pay hefty medical expenses for their employees in the future. So, overall, it’s a win for Weight Watchers because there is potential for greater future income.
Pfizer Image Courtesy of NYSE