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Expand chart
Data: S&P, Yahoo Finance; Chart: Andrew Witherspoon/Axios

The earnings and stock prices of health care companies have increased a lot more than the broader market since former President Obama signed the Affordable Care Act into law in 2010.

Between the lines: The ACA was designed to expand coverage and nudge companies toward new behaviors. But despite critics' warnings about the end of private insurance or a government takeover of health care, the law has not upended the system's underlying structure or stifled the industry's ability to reap large profits.

By the numbers: The S&P 500 health care index, which tracks the stocks of 63 major companies, has soared by 186% since the ACA became law. By comparison, the S&P 500 and Dow Jones increased by 141% and 139%, respectively, according to FactSet.

Winners: Health insurers. The stock price of Centene, a major Medicaid and ACA marketplace insurer, has multiplied by 12 times or 1,100%. Shares of UnitedHealth Group have jumped by more than 700%.

  • Insurers weathered cuts to Medicare Advantage and new requirements forcing them to cover sick people, but in return they got millions of taxpayer-subsidized customers through Medicaid expansion and the individual marketplaces.
  • Wall Street analysts say investors and companies were afraid the ACA was going to hurt the profitability of employer plans and Medicare Advantage. That never happened.
  • The individual marketplaces started out shaky but are now lucrative for the companies that remain. Medicare Advantage is expected to explode with growth over the next three years, and as more states expand Medicaid, more people get enrolled into private Medicaid plans.

The rest of the industry — which helped craft the law through intensive lobbying — has benefited, too.

  • Hospitals have faced sizable Medicare payment cuts from the ACA, but those reductions were largely offset by the law's Medicaid expansion and other forms of new coverage.
  • Rural hospitals, especially in states that have not expanded Medicaid, have struggled. Admissions also have stagnated. But the largest publicly traded hospitals (and big not-for-profit hospitals) have fared rather well.
  • The ACA did not meaningfully touch the pharmaceutical industry's business or patent practices, and those companies have reaped record profits. Pharma stocks over the past 8 years have fluctuated based on sales and new drug approvals, not on anything related to the ACA.
  • Medical device companies hate the ACA's device tax, but Congress has already deferred that fee a few times. The device tax hasn't hampered earnings and hasn't led to widespread job losses.

Go deeper: The ACA boom has helped pad the wallets of health care leaders.

Go deeper

26 mins ago - Health

Treasury begins dispersing $350 billion in COVID relief funding to states and localities

Treasury Secretary Janet Yellen. Photo: Tasos Katopodis/UPI/Bloomberg via Getty Images

The U.S. Treasury on Monday began giving state and local governments access to $350 billion in emergency funding from the American Rescue Plan, the department announced Monday.

Why it matters: Though the money is aimed at helping state, local, territorial and tribal governments recover from the pandemic's economic fallout, the administration will generally give them wide latitude on how they can use the funds.

Game developers break silence around salaries

Illustration: Annelise Capossela/Axios

Developers are sharing their salaries on Twitter under the hashtag #GameDevPaidMe to encourage pay transparency in their industry.

The big picture: The hashtag started circulating last year, but has returned periodically as developers fight for better working conditions. Salary sharing is a way to equalize the field. By removing the secrecy, as well as the stigma, around discussing pay, workers have more power to advocate for themselves when negotiating salaries and raises.

53 mins ago - World

Jerusalem crisis: Hamas fires rockets, Israel begins military campaign

Palestinian protesters and an Israeli police officer near the Damascus Gate. Photo: Amir Levy/Getty Images

Days of tensions in Jerusalem escalated into an exchange of fire on Monday, as Hamas fired dozens of rockets toward Israel and the Israeli military responded with strikes of its own and said it was preparing for a military operation that could last several days.

Why it matters: This is the first time Hamas has fired rockets at Jerusalem since 2014, and the most serious escalation between the Israelis and Palestinians in many months. It comes during the most sensitive days on the calendar — the last days of Ramadan and the Jerusalem Day commemoration on Monday — and amid political crises in both countries.