Costly health care reform was supposed to kill the Wall Street bull market. But there were more winners than losers on the first trading day after the House passed the landmark bill. The initial takeaway from investors is that President Obama's 10-year, $940 billion plan will not act as a profit-killing drug for the hospitals, insurers, pharmaceutical companies and medical device makers affected by the changes.
As Wall Street sees it, the bill, which will provide health insurance to an additional 32 million Americans, will result in greater demand for prescription drug purchases and medical care at doctors' offices from a new customer base with the ability to pay for their care. That revenue will offset the tens of billions in fees and taxes health care firms will pay to subsidize the plan.
"The more people insured, the greater demand there is for health care and more customers that can pay," says Jack Ablin, chief investment officer at Harris Private Bank.
While the longer-term impact of the bill might not be known for years, given that many key provisions don't take effect until 2014, investors reacted positively Monday. The Dow Jones industrials rose 44 points to 10,786, and the S&P Health Care index rose 0.6%.
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