Investors came to a realization this week that political insiders have been quietly acknowledging for some time now. Not only might self-proclaimed democratic socialist Bernie Sanders win the 2020 Democratic primary, but he could also become the next US president.
Healthcare stocks plummeted this week amid coverage of a town hall event hosted by Fox News, during which Sanders’ shocked many observers by the degree to which he connected with the audience. Fox News caters to a conservative audience and the event was held in a city, Bethlehem, Pennsylvania, which Donald Trump carried in 2016.
Driving the scare among healthcare sector investors is the growing support for Sanders’ Medicare-for-All government insurance plan, which threatens to severely restrict the role private insurers can play.
But the fears of Sanders’ signature healthcare plan, a bill for which has been co-sponsored by several of his opponents in the presidential primary contest, may prove to be premature, some analysts say.
While Republican strategist Karl Rove warned that – judging from the town hall event – his party may be underestimating Sanders’ appeal to Trump voters, legislation would require more than a 2020 win for the Vermont Senator.
“Whether he secures [the Democratic nomination] or not, I don’t think Medicare-for-All happens. So I think there’s a huge opportunity here,” Mark Tepper of Strategic Wealth Partners said in an interview on CNBC.
“As a long-term investor, I think you have the opportunity to get in at a good price point right now.”
The Health Care Select Sector SPDR (XLV) ETF fell 2.9% on Thursday and is now in the red on the year.