Wall Street doesn’t quite see the US switching to a healthcare system run by the government in the near future. But nonetheless, the past three years of unpredictable politics is worrying investors and taking a toll on healthcare stocks.
The S&P 500 shows healthcare to be the worst-performing industries, as Democrats along with Senator Bernie Sanders, drive the ‘Medicare for All’ plan aimed at replacing private insurance with public health coverage, as a part of 2020 campaigns.
Although the chances are very slim, market analyst Ross Munken from Evercore ISI, says investors are worried that Sanders might really win and a form of universal healthcare would come into play. Munken adds that public healthcare could be massive, but at present, the market is being over cautious.
Many Democratic proposals have called to eliminate private insurance and replace it with the Medicare plan, stating advantages of reduced costs and administrative inefficiencies, in the country’s healthcare system. Sanders most recently too, proposed a bill on similar lines.
Trump’s presidency, marked by myriad unprecedented actions, has thrown investors off Sunday when the President said the U.S. would hike tariffs for China-imported goods, despite repeatedly claiming that trade talks of recent weeks have been going well with Beijing.
Medicare for All has zero chance without any Democrats in the office. With at least one Democrat in office, with less than 60 Senate votes counting on them, the chances of the universal healthcare plan is probably just 5%.
Along with investors, this possibility is worrying the large healthcare organizations’ CEOs too. While some of them said discussions around affordable public healthcare is an important one that they would actively participate in, others were not so supportive. While one said it could do more harm than help, another bluntly stated that the U.S. healthcare system would certainly be destabilized if ‘Medicare for All’ was implemented.