I chatted with CNBC on the prospects for health insurance stocks now that Obamacare reform is off the table. The market seems to be pricing in a rosy scenario in which health insurers can continue to pass on rising costs indefinitely. I’m not so sure. At some price — and for many Americans, that point has already passed — health insurance makes no economic sense. You’re better off taking your chances and going uninsured.
And while President Trump is currently saying he’s comfortable sitting back and allowing Obamacare to fail on its own, I’m not so sure about that either. Trump lacks the patience for that. I think it’s far more likely he intervenes, possibly with price controls. Clearly, nothing like that is priced into current stock prices.