This article was originally published on ETFTrends.com.
Even as the Democrats retook control of the House of Representatives and the Republicans maintained majority in the Senate, healthcare ETFs were also big winners following the 2018 Midterm Election results.
The Health Care Select Sector SPDR ETF (XLV) gained 2.49%, the Vanguard Health Care ETF (VHT) went up 2.42%, the iShares US Medical Devices ETF (IHI) rose 1.91%, and iShares US Healthcare ETF (IYH) gained 2.32% as of 11:30 a.m. ET. As such, the Direxion Daily Healthcare Bull 3X ETF (CURE) gained 7.53% on the additional leverage.
CURE soared above its 200-day moving average after slowly creeping above that metric prior to the elections.
CURE seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index. The index CURE tracks includes domestic companies from the healthcare sector, which includes the following industries: pharmaceuticals; health care equipment and supplies; health care providers and services; biotechnology; life sciences tools and services; and health care technology.
Health care was a hot-button topic present on this year's midterm election ballots as voters headed to the polls on Tuesday to decide which healthcare issues to support.
Uncapped Revenue for Dialysis Providers
In California, a heated debate occurred over the payment to dialysis providers, which can prove costly--rising healthcare costs have already been a topic brewing in political realms. Medicare estimates show that it nationally spends $34 billion a year on dialysis treatment providers.
In the end, California voters decide against putting a cap on revenue generation for dialysis providers. Healthcare provider DaVita Inc gained over 11% in Wednesday's trading session.
“We are grateful that Californians voted down Proposition 8,” DaVita said in a statement on Wednesday, “It’s disappointing that the SEIU-UHW used the ballot initiative process as leverage in pursuing their own objectives, despite the potential harmful consequences to nearly 70,000 California dialysis patients.”
Idaho, Nebraska and Utah proposed legislation on their respective ballots to address increased access to their Medicaid programs for low-income individuals--a measure already taken on by 34 other states as part of the Affordable Care Act. Healthcare analysts at Avalere posited that increasing Medicaid accessibility would translate to 325,000 more people having access to health care they wouldn't otherwise qualify for.
“The popularity of Medicaid expansion has risen, particularly in states with high rates of uninsured,” said Chris Sloan, director at Avalere. “Although state legislatures can restrict the governor’s authority to expand Medicaid unilaterally in certain states, changing voter preferences around expansion may put pressure on legislators, many of whom also face reelection in November.”
Voters in all three states opted for Medicaid expansion and a Democratic majority in the House could mean more expansions in certain states like Montana, Kansas and Maine.
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