•Congress Passes Health "Reform" Bill — Figures 1 & 2 summarize impact. Sunday evening, the House voted for the Senate bill, 219-212, and President Obama will sign it into law. The Senate will now take up the reconciliation side-car bill also passed by the House and begin the budget reconciliation process, which could drag on for the remainder of this week (Easter recess begins 3/29). If the Senate makes any changes to the side-car bill, the House would need to vote on it again before it is sent to Obama for signing. False advertising comes w/ CBO scores citing budget reductions of $138bn/10 yrs, but in reality "Reform" is a misnomer, and it will result in $1Trn more in healthcare spending in the U.S. over the next 10 years or ~2% more. We can't rule out a negative knee-jerk reaction for Managed
Care Monday after the HMO Index rallied +8% last week, and the regulationwriting will remain a slight overhang. However, we continue to believe money will rotate back into healthcare stocks now that the uncertainty of "reform" is lifted, boosting valuations longer-term, and the worst case "Public Plan" is off the table.
Passing a Bill, Failing Real Reform House Passed Senate Bill; $1 Trillion More Healthcare Spend $SPY
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