(Bloomberg View) — Since the Patient Protection and Affordable Care Act (PPACA) took effect two years ago in the rockiest of rollouts, American health care companies outperformed every industry in the U.S. Taken together, they are the best collection of stocks among worldwide peers.
The impact of Obamacare on the U.S. economy and its health care system remains a matter of intense debate. More Americans have health insurance, but the longterm effects on the cost of medical care and on government spending are still unknown.
For health care companies, though, one thing is clear: Instead of being the economic catastrophe predicted by congressional Republicans, all of whom voted against it, Obamacare, at worst, is benign for U.S. business and, at best, is making global investors rich.
There isn’t a group of companies anywhere packing as much punch for money managers during the past two years as the 458 big and small firms in the Russell 3000 Health Care Index, according to data compiled by Bloomberg.
They delivered 35.9 percent, almost twice the 18.5 percent total return of the rest of the stock market since October 2013. That was when U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius apologized for the software errors that made it impossible for many people to obtain insurance coverage through the government’s new healthcare.gov website. (The problems were fixed.)
Obamacare, enacted in 2010 as the biggest entitlement legislation in a generation and upheld twice by the Supreme Court, increased the access of private and public health insurance to more than 44 million uninsured Americans by imposing new taxes, mandates and subsidies.