More than three years after it was contentiously passed by Congress, and seven months since the highest court in the land heard the case, the Affordable Care Act, often called "ObamaCare," has been deemed constitutional by the Supreme Court.
The surprising, 5 to 4, opinion caught both pundits and investors by surprise, as traditional party-line factions on the court were blurred, while the unexpected decision only added to angst in an already troubled and irritable marketplace.
While significant, the ensuing sell-off in stocks of about 1-to-1.5% is still modest and, as my co-host Jeff Macke and I discuss in the attached video, reflective of the fact that this divisive issue is anything but settled.
Not only have Republicans already promised to draft legislation that would over-turn the law that mandates all adults buy health insurance or face a penalty, but it doesn't take effect until 2014, not to mention the fact that there's also a pivotal election coming up in November. Those hoping a ruling, in either direction, would bring closure are surely disappointed today.
"I don't think this was a hugely trade-able event in the first place," Macke says, acknowledging the unexpected decision and likelihood that the cloud of uncertainty that has hung over businesses will not be swept away. "2014 is a thousand years from now. I'm not going to trade off 2014."
While the Healthcare Sector (XLV) itself was down a bit more than the market, it's important to note that all nine of the other sectors were down too, including bigger declines by Tech (XLK) and Financials (XLF). One area that bucked the downtrend and celebrated the court decision was hospitals & healthcare facilities, which rallied on the news.
I think this points to the fact that future policy tweaks will be more oriented towards cost reduction and control rather than expanding the availability of service. But even there, the ruling and outlook are inconclusive, as hospitals, service providers and insurers seem positioned to win, no matter what, given our aging and obese population and the likelihood that the amount we spend on healthcare will never come down.