Once one of the high fliers among health care exchange traded funds, due in large part to the Affordable Care Act or Obamacare, the iShares U.S. Healthcare Providers ETF (NYSEArca: IHF) has followed the broader health care sector lower in recent weeks, but that does not mean the ETF’s run is over.
As the Affordable Care Act adds millions into the healthcare system, the increased demand for health products and services are supporting the momentum in healthcare-related exchange traded funds.
The healthcare sector fundamentals look favorable. According to actuaries at the Centers for Medicare and Medicaid Services, American spending on all healthcare increased 5.5% in 2014 year-over-year and is expected to grow 5.3% this year, reports Louise Radnofsky for the Wall Street Journal.
Looking ahead, in the years through 2024, spending growth is projected to average 5.8% and peak at 6.3% in 2020.
Additionally, the actuaries calculated that around 8.4 million Americans became insured in 2014 and noted their increased use of medical services. The number of people on Medicaid is projected to increase to 78.1 million by 2024, outstripping Medicare, which is expected to have 70.3 million enrolled.
In the second quarter, only 11.4% of adults lacked some form of health insurance, a half-percentage point dip from the first quarter, reports Dan Mangan for CNBC.