Obamacare vs. Trumpcare: As far as the markets are concerned, a difference that makes no difference is no difference

Whether Obamacare is replaced with Trumpcare or not, the following scenario for insurance companies is probable.

First, if Obamacare is replaced with Trumpcare, insurance company stock values will take a hit in the very short run. As the sector adjusts to fewer participants, it will design different insurance products for consumers severely impacted by higher premiums. Payouts will be minimized and in the immediate to longer run, share values will rise.

Second, if Obamacare remains intact, insurance companies, who have been carrying a greater share of the costs of administering the program on their balance sheets, will see shares take a hit. Companies will continue to vacate certain markets leaving an increased number of consumers uninsured. Again, the companies will come up with alternative products while collecting higher premiums from consumers who are insensitive to price increases. In the immediate and long run, insurance company share values will rise.

In the end, beneficiaries will be those who can afford the best insurance plans while holding shares in the very companies they send premium payments to. Government would have fulfilled its primary mission: to transfer wealth from the middle class to the investor.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in Democrats, Donald Trump, GOP, health care, Republicans and tagged , , , , . Bookmark the permalink.

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