What Happened With the Health Care Bill?


“Nobody knew that health care could be so complicated,” President Donald Trump said near the end of February—hinting at an uneasiness that’s echoed through the markets for weeks.

So far in March, the Dow Jones industrial average, the index that’s often used as a gauge of how the stock market’s doing, has slipped 360 points, or 1.7 percent. And on Tuesday, March 21, stocks dropped by more than 1 percent in a single trading day for the first time in 109 days. Investors had another bumpy ride on Friday, with the Dow falling 100 points in the afternoon before recovering to close down 60 points.

What’s happening here?

News about repealing and replacing the Affordable Care Act has been taking a toll on the markets. President Trump made nixing Obamacare and coming up with a new and improved health care plan a top priority for his administration.

Enter: the American Health Care Act (AHCA), championed by House Speaker Paul Ryan…aaaand quick exit.

As soon as the AHCA was publicly introduced, naysayers—from both sides of the aisle—loudly voiced their dissent. After postponing the vote once on Thursday, the bill was ultimately yanked from the House of Representatives floor on Friday after it became clear it wouldn’t pass. That means Obamacare is sticking around for now—and possibly for good, if Trump stays firm on his DNR call on health care reform. (Late Friday afternoon, Trump said he “would not put the bill on the floor in the coming weeks” and planned to move on.)

What was wrong with the AHCA?

Depends who you ask. Dems were all expected to vote against any proposed replacement for the Affordable Care Act, which was signed in spring of 2010. (It passed months earlier, largely along party lines, when the Democrats controlled both houses of Congress—by a vote of 60 to 39 in the Senate and 220 to 215 in the House.)

One reason some lawmakers said they would not support this specific replacement plan was that, had it passed, 14 million people who currently have coverage would lose it by 2018, according to an analysis from the Congressional Budget Office. (On the bright side, the plan was also projected to reduce the federal deficit by $337 billion by 2026.) They also opposed a late amendment to the bill that would threaten essential benefits currently covered under Obamacare, including maternity care, preventive care, prescription drugs and mental health coverage.

Some moderate Republicans shared the same concerns. Other, more conservative Republicans (known as the Freedom Caucus) who opposed the bill had the opposite reasoning: The proposed legislation didn’t offer enough change for their tastes. They’d rather repeal now and replace later.

What does this have to do with investing?

The market hates drama, and daily news always does its part to churn the market. A nail-biter like this one was certainly bound to worry investors.

The failure for Trump also casts doubts on his ability to push through other items on his agenda, such as tax reform, infrastructure spending and deregulation—the promise of which has helped propel stocks upward since his election.

“A lot of people think reducing regulations is good for the economy; repatriation of all that money will be a form of stimulus package,” says Bradford Pine, wealth advisor and president of Bradford Pine Wealth Group based in Garden City, New York. “The fear is, if health care fails, maybe he’s not going to get [his other proposals] to happen.”

But Pine doesn’t share that fear. “Health care is a very tough feat to get done,” he says. “I think that infrastructure, spending and tax reform are easier hills to climb.”

Should this change my own investing strategy?

Nope. For one, these market dips are just drops in the bucket compared with recent gains. “It’s the first time since November 9 that the market has pulled back,” says Pine. “It’s totally justifiable that the market can pull back on uncertainties… and any kind of a pullback would be a buying opportunity.”

Vid Ponnapalli, Certified Financial Planner and founder of Unique Financial Advisors in Holmdel, N.J. agrees you may actually want to consider upping your holdings amid the uncertainty. “This is a great time to start reaping the benefits of dollar-cost averaging,” he says. “The market has been one-directional since the election, and if we expect volatility in the next few months, regular investing is a great way to benefit from it.”

Another point to remember: Investing is about more than any one day. “Focus on the factors in your financial life that you can control, such as your income, expenses, savings and a tax-efficient and disciplined investment approach,” says Stacy Francis, a Certified Financial Planner, founder of Francis Financial in N.Y. “Keep your eyes on the long-term and try not to get swayed by the current news.”