Our outlook for health-care stocks

Health-care exchanges provide the biggest uncertainty going into 2014.

Alex Morozov, CFA 3 October, 2013 | 6:00PM

Highlights
The exchanges set to be widely launched over the next year present the biggest near-term uncertainty for the health-care sector.
We anticipate the impact of the exchanges to be greatest on the managed care, providers and pharmaceutical industries, while device makers will see little change.
Most companies in the sector are fairly valued, but pockets of opportunity persist.

The Affordable Care Act in the United States will create state-based exchanges through which individuals and small businesses can purchase standardized health-insurance policies, receive government subsidies to offset premiums and cost sharing, and determine Medicaid eligibility. According to the Congressional Budget Office, exchanges are expected to enroll 25 million people by 2017, most of whom were previously uninsured, but a modest percentage of whom may come from employer-sponsored plans.

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About Author

Alex Morozov, CFA

Alex Morozov, CFA  Alex Morozov is the director of European equity research for Morningstar.