I am constantly amazed at the creativity of investment funds. I didn’t realize until today that there are mutual funds that allow investors to bet for or against the Affordable Care Act.
So what does Wall Street think about Obamacare? According to Bloomberg Businessweek “investors have bet 45 times more money on Obamacare’s success than on its failure.” ”
Plus, the fund that bets on Obamacare is up 46.9% in the last year, while the fund that bets against is up only 13.8% (underperforming the S&P 500, which is up 22.8% in the same time frame).
Unsurprisingly, it was the Republican effort to kill Obamacare after it was enacted that hurt health care investment the most. Once the Supreme Court ruled that the law was constitutional, investment in health-oriented companies soared. Funds focused on health care saw their assets more than double from $7 billion to $16 billion. According to venture capital firm Venrock:
Investors can’t imagine a scenario where the changes the Affordable Care Act started will be repealed and taken away. There’s a ton of money flowing into things that help health-care [companies] take advantage of the insurance market changes, the coverage expansion, the payment model changes, and the data liberation that are derivative of the law.
And yet, the Republicans are still trying to sabotage Obamacare, opposing Medicaid expansion, trying to discourage young people from signing up, and even a recent proposal from Marco Rubio that would abolish “risk corridors” that limit the risk to health insurers. Rubio claims that it is a bailout. What’s hypocritical about this is that risk corridors are a Republican idea that were part of Dubya’s Medicare prescription drug law, and which actually saved taxpayers $7 billion. And the risk corridors in Obamacare are projected to save the taxpayers even more than that.