The Affordable Care Act: It is Here to Stay

While several key provisions of the ACA take effect in 2013, the broader market impact is likely muted in the near term. Markets are forward-looking, and stocks have had ample time to digest the legislation since it was passed in 2010. Equities showed little movement when the Supreme Court upheld its constitutionality in June, and though the recent election inspired much chatter, it was likely never a game-changer. To materially alter or repeal ACA, Republicans would have had to keep the House of Representatives, secure a filibuster-proof Senate majority and win the Presidency — a clean-sweep scenario that was highly unlikely in 2012. Thus, ACA implementation should not pose a material surprise for stocks, making it unlikely to prove a lasting, material market mover. Yet it is likely to have an impact. Changes to health care policy will create winners and losers within the Health Care sector — and opportunities for investors to capitalize.