The iShares Dow Jones U.S. Healthcare Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of U.S. healthcare stocks, as represented by the Dow Jones U.S. Health Care Index.
See more details on sponsor's website
Tomorrow is the deadline for people to sign up for health insurance that is due to take effect on January 1.
However, much uncertainty exists among insurers and consumers, due to government decisions to delay some of Obamacare's most important provisions, a result of the fiasco that has been the Healthcare.gov Web site, which suffered a three-hour outage on Friday.
The latest change is allowing anybody whose current plan is illegal under the new law to buy "catastrophic coverage", whereby benefits are limited and the deductibles are high. Those plans were initially supposed to be restricted to people under 30 years of age.
President Obama said on Friday that over 1M Americans have selected new health-insurance plans through the new exchanges. That's well below the initial target of 3.3M by the end of December.
Industry trade group Health Insurance Plans said its members will give consumers until January 10 to pay the first month's premium of a plan as long as they pick a scheme by tomorrow night. The move follows a request from the White House for insurance companies to be relaxed about the various deadlines.
The NYTprofiles how Obamacare has hit those in the middle class who earn too much to be eligible for subsidies. "In some places, prices can quickly approach 20% of a person's income," the NYT writes. "Experts consider health insurance unaffordable once it exceeds 10%."
Health insurers are continuing to receive error-strewn information from the government's HealthCare.gov Web site as the starting date for Obamacare coverage of January 1 draws closer.
However, the government maintains that the problems stem from data that was transferred to insurers in October and November, and that information passed over this month is accurate.
The government wants insurance companies to take a relaxed approach to the various deadlines and consumer coverage-issues that may crop up until all the kinks are ironed out, but whether the firms will comply is another matter.
Either way, bureaucratic chaos is expected to reign come the New Year.
"Warehouses over townhouses" is one of BAML's ten themes for 2014 - highlighting a potential shift away from consumer-driven stocks to industrial and commercial names.
"If revenue growth continues to accelerate as we expect, corporations are likely to invest in their businesses by spending some of the cash accumulated on their balance sheets. This capex cycle, combined with improving global economic growth, is likely to benefit stocks in more industrial and cyclical parts of the economy over those that are more dependent on the consumer. In our view, this has already started, but probably is in its early stages."
An attached chart shows this outperformance beginning to creep in in Q3.
If the thesis is correct, investors may want to be sellers of Consumer Discretionary (XLY), Health Care (XLV), and Financials (XLF), and buyers of Tech (XLK), Energy (XLE), Industrials (XLI), and Materials (XLB).
The government's HealthCare.gov Web site for Obamacare was failing to accurately transmit around 10% of applications to insurers - as of Friday - although that represents a vast improvement on the error rate in October.
Still, up to 25% of the enrollment records for people who bought coverage in October and November could contain mistakes, raising doubts about whether those customers would be insured if the policies take effect from January 1, as scheduled.
Meanwhile, insurers are working with the Centers for Medicare & Medicaid Services (CMS) on a short-term back-up system that will enable the government to pay the firms for the income-based subsidies that many consumers qualify for under Obamacare.
The White House said yesterday that it has achieved its target of improving the HealthCare.gov Web site so that it works "smoothly for the vast majority of users."
Officially, the portal is now operating over 90% of the time vs 40% at some points in October, the loading time is much faster, the error rate has dropped to 0.75% from 6%, and the site can handle 50,000 users at the same time.
However, the latter claim hasn't been tested in the real world, and some in the government reportedly aren't certain the site will hold up.
The back-end systems continue to be a problem, with one result being that while some consumers believe they've bought coverage from insurers, the latter don't have any records of the transactions. One detail that the government didn't provide was how many people are completing all the enrollment steps.
The next deadline is the middle of this month, by which time consumers need to have signed up for coverage that starts on January 1.
Tomorrow is the White House's self-imposed deadline for the federal HealthCare.gov Web site to be working properly for 80% of users.
However, "navigators" whose job it is to help people sign up say that problems persist. It's "kind of hit and miss," says one, although "there have definitely been more hits lately than in the past." The COO of Enroll Alaska rates the site 4/10.
Molina Healthcare (MOH) has expressed its support. "It is easier to navigate. It's working better. It's faster," Molina said.
More problems for the portal could lead to millions of Americans to decide to forego buying coverage and swallow the fine instead.
The participation of the young and healthy is particularly important to the success of the insurance exchanges.
Should the problems continue, the government might come under pressure to extend the March 31 deadline for open enrollment, a move that insurers have warned could undermine the market.
President Barack Obama might have said that consumers will be allowed to keep canceled health-insurance policies for one more year, but at least five states - including New York and Washington - won't let such plans be reinstated, as they believe it would harm their exchanges.
Many carriers are also not allowing their customers to extend their old policies, due to time constraints and other obstacles. And those firms that may reverse the cancellations have said that premiums could rise.
Of the major players, Cigna (CI) could reinstate policies, while WellPoint (WLP) is analyzing the situation.
"Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers," says the head of the top insurer trade group. "Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace."
"The logistics of doing it with just a few days left in the policy year are extremely difficult," says a former CEO of Oklahoma's largest health system. The fix "shifts the blame and makes [the insurance companies] the culprits."
Beyond the administrative burden, Citi analyst Carl McDonald says the change presents a risk of building a less healthy and less profitable pool of insurance buyers; the potential deterioration of the exchange market will pose a risk for WellPoint (WLP), Humana (HUM) and Health Net (HNT), which pursued aggressive exchange strategies for 2014.
Fewer than 50,000 people had managed to enroll in private insurance plans via the government's problem-plagued HealthCare.gov Web site as of last week. The number represents less than 10% of the 500,000 people that had been projected.
Twelve of the 14 states that are operating their own exchanges have signed up 49,000. The total is therefore also well below the initial target, which was 800,000. The Congressional Budget Office's prediction of 7M enrollments by March seems like a distant dream.
Major health insurers are so concerned that they want to be allowed to sign up those who are entitled to subsidies directly rather than via the federal system. However, the administration isn't keen, due to privacy concerns.
Insurers: Aetna (AET), WellPoint (WLP), UnitedHealth Group (UNH), Humana (HUM), Cigna (CI), Molina Healthcare (MOH).
The technology problems afflicting the roll-out of health-insurance exchanges seem to be even worse than thought, with insurers saying that the marketplaces are generating incorrect information.
"Errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations," the WSJ writes.
The problems are damaging the ability of insurers to process even the small numbers of people who have signed up. "The longer this takes to resolve...the harder it will be to get people to (come back and) sign up," said Aetna (AET) CEO Mark Bertolini.
Other firms that could be affected include UnitedHealth (UNH), WellPoint (WLP), Humana (HUM) and Molina Healthcare (MOH).
The IT contractors involved include IBM (IBM), Infosys (INFY) and CGI Group (GIB).
It's a good year for large-cap core mutual funds, with 46% beating the S&P 500 vs. a 10-year average of just 36%, according to Goldman Sachs.
The study finds most are overweight health care (XLV), which not coincidentally happens to be the best-performing sector this year, up 30%.
The funds are most underweight utilities (XLU), which just happen to be the second worst-performing sector YTD, up 10%. Only telecoms have done worse.
Chasing performance? May be, but the team finds the funds have tended to be present in the good performers for the last 12 months, and have retreated from discretionary stocks (XLY) of late despite their outperformance.
Individual names? CVS Caremark (CVS), JPMorgan (JPM), and Cisco (CSCO) are the stocks liked the most vs. the benchmark.
California Governor Jerry Brown has vetoed a bill that would have limited the use of biosimilar pharmaceuticals in the state.
Brown explained that the legislation was premature, as the FDA hasn't yet set the rules governing such drugs.
Biosimilars are the copycat versions of biotech drugs - also known as biologics - which are complex proteins developed in living cells. Biosimilars are not called generics, as it's difficult to prove that they're exactly the same as the biologic original.
The campaign to limit the use of biosimilars has been led by Amgen (AMGN) and Genentech (RHHBY.OB); so far, 10 states have blocked such efforts this year, including Illinois and Texas.
Companies developing biosimilars include Hospira (HSP), Novartis (NVS), Momenta Pharmaceuticals (MNTA), Baxter (BAX) and Teva (TEVA).