“A loss in the number of insured provided by ACA policies such as Medicaid expansion and the individual mandate would be credit negative. Eliminating these policies may lead to an increase in uncompensated care and bad debt, placing pressure on top-line revenue,” according to a Moody’s Investors Service note posted by Amey Stone of Barron’s.

XHS and the rival iShares U.S. Healthcare Providers ETF (NYSEArca: IHF) slumped in late 2015 after health insurance giant UnitedHealth Group (NYSE: UNH) revealed plans to withdraw from Obamacare exchanges.

Looking ahead, in the years through 2024, spending growth is projected to average 5.8% and peak at 6.3% in 2020.

“The negative effects could be short term if the Trump administration were to implement proposed reforms such as removing barriers to the sale of interstate insurance, allowing individuals to roll over health savings accounts, and giving individuals the opportunity to deduct health premiums from their personal income taxes. If implemented, these reforms offer large incentives for individuals to purchase insurance from private health plans,” according to the Moody’s note seen in Barron’s.

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