With any legislation, there will be winners and losers, and the Patient Protection and Affordable Care Act is no exception. We already know who lost: people who already had health insurance lost, as they’ve seen their insurance rates skyrocket while being required to pay for coverage that they do not need. But who won? From The Wall Street Journal:
Fund Boss’s Gamble on Health Law Pays Off Big
Larry Robbins’s Glenview Capital Management has made realized and paper gains of more than $3.2 billion
By David Benoit | July 23, 2015 7:52 p.m. ET
Glenview Capital Management LLC made a bold decision when President Barack Obama’s health-care overhaul was rolling out: Bet on it.
The result has been one of the most successful hedge-fund wagers in recent years. New York-based Glenview has realized and paper gains of more than $3.2 billion since it started making investments in hospitals and insurers four years ago, according to a Wall Street Journal analysis of securities filings.
The fund is run by Larry Robbins, a billionaire hockey fanatic known for his sermonizing investor letters. Its latest win comes courtesy of Anthem Inc., the nation’s second-largest health insurer by revenue, which is expected to announce a $48 billion-plus acquisition of rival Cigna Corp. as early as Friday, according to people familiar with the matter. Glenview owns shares in both companies, as well as in insurers Aetna Inc. and Humana Inc., which struck a $34 billion deal of their own three weeks ago. Shares of all four companies have rallied in anticipation of tie-ups.
The passage of the Affordable Care Act, known as “Obamacare,” has riled executives throughout corporate America over concerns about its costs and deeper government involvement in a key industry. But while the health-care industry, many investors and individuals wrestled with the uncertainties created by the law, which was passed in 2010, a team at Glenview was laying the groundwork for the wager early on.
They reasoned as early as 2007 that the health-care system in the U.S. was likely to change, with more people gaining coverage and mergers in the future for hospital operators and health insurers. They largely stuck to that thesis through two presidential campaigns, a congressional brawl and a pair of cliffhangers at the Supreme Court.
There’s a lot more at the original.
Is it any surprise that the insurance industry liked Obamacare? It guaranteed them a significant increase in the number of customers, along with government subsidies to help them pay. The health care industry liked it as well, because it guaranteed them fewer non-paying patients.
And now we find out — not that we didn’t already know it — that Wall Street likes it as well, and the financial wizards are making billions of dollars on health care reform. As long as you aren’t a working American, you pretty much made out, either through increased investment earnings, or taxpayer-subsidized health insurance.
It’s only if you are a working American, who already had health insurance — which was true of about 85% of the population — that you lost on this deal.
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