Does Wall Street hate health reform?

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last updated 11 January 2015

Although critics of the Democrats' health care form, which President Obama signed into law on Tuesday, say it features too much intrusive new goverment regulation, higher prices in health care industry stocks on Monday suggest that investors believe that bigger profits lie ahead. Could health reform prove a boon to business? (Watch a Bloomberg report about stocks rising after the health care bill passed)

Don't let the stock blip fool you: It's perfectly understandable that stocks would tick up once the health reform question was settled, says blogger Rossputin in People's Press Collective, because markets hate uncertainty. But the Democrats really want to "end the private health insurance industry, not just tame it," and once it becomes clear that Obamacare moved them closer to that goal health stocks are in for a dive.

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Sorry, but investors aren't buying GOP fear-mongering: Republicans tried to paint reform advocates as "totalitarian socialist freedom-haters," says Andrew Leonard in Salon, but in the first hours of trading after the health bill passed drug stocks, including "Pfizer, Merck, AstraZeneca, and GlaxoSmithCline were all up, with gusto." The reality is that when you insure more Americans, it's "good for the health of real people, as well as for healthcare industry profits."

There will be winners and losers on Wall Street: The health care overhaul will cut $132 billion from the Medicare Advantage program, says Matt Phillips in The Wall Street Journal. So while pharmaceutical companies and many hospitals will get a "boost" from the expanded coverage set to begin in 2014, managed care companies, such as Humana, that depend heavily on the Medicare Advantage program for business could be in for a tough time.